Skip to navigationSkip to content
India-Congress-money
Reuters/Adnan Abidi
The last time the Congress faced a serious cash crunch was in 1977.
SHOW ME THE MONEY

With India Inc. behind the BJP, Congress is running out of cash

By Anita Katyal

India’s cash-strapped Congress party has introduced a series of austerity measures and fresh fund-raising methods to deal with its serious resource crunch.

Finding it increasingly difficult to run its central office and its various state units, Congress treasurer Motilal Vora has issued instructions to party functionaries to cut back on expenditure. At the same time, the party members have been asked to step up their contribution to the party coffers.

Party office bearers have been asked to prune their travel and entertainment expenses. For instance, the fuel allowance of Rs15,000 given to party general secretaries every month has been withdrawn for those functionaries who are also members of Parliament (MPs)—they have been told to manage on the allowance they get as MPs.

Party secretaries have been informed that they are not entitled to airfare and will instead have to take the train. And, office bearers have been told that they should travel only if it is unavoidable. Chartered flights are totally out, or at least, not on party expense.

Belt tightening

Besides, the Congress has decided to raise additional funds by asking all members to contribute Rs250 every year to the party kitty. This is in addition to the Rs100 already being contributed by each member.

The party is also in the process of identifying 100 members in each state who will be asked to give Rs1 lakh each, totalling Rs1 crore, to meet the expenses of its respective state units.

At present, each Congress MP and state legislator has to contribute one month’s salary to the organisation. Each All India Congress Committee member has to contribute Rs600 annually to the party, while members of the Pradesh Congress committee have to give Rs300 each to the state unit.

The additional money will be raised only after the party’s ongoing membership drive has been completed. However, there is no clarity about the final deadline for the fresh enrolments as the dates have been extended four times already.

New measures

Before the Congress formed the government in 2004, party president Sonia Gandhi had set up a committee under the chairmanship of Manmohan Singh to suggest methods of fund raising and financial allocations within the party.

This committee had recommended that every active member should contribute Rs100 every year to the state unit—a practice that continues to be in place. Obviously, the present system is not meeting the growing demands of the party, and hence the need for new measures.

Flush with funds during the ten years it was in power, the Congress had faced a major crisis during the last Lok Sabha elections and the subsequent assembly polls as no donors were willing to put money on a party that was heading towards a certain defeat.

Big industrialists who had earlier lined up to contribute generously to the Congress got disillusioned with the party as they believed the United Progressive Alliance government had failed to deliver on governance.

The corporate sector subsequently shifted loyalties to the Bharatiya Janata Party (BJP) in the run-up to the 2014 general election. As a result, Congress candidates found themselves at a serious disadvantage in last year’s elections as compared to their opponents in the BJP.

Funds dry up

As it happens, the Congress party’s run of bad luck has continued more than a year after its electoral defeat.

While the flow of money from industrialists has dried up, the party’s defeat in Andhra Pradesh, Maharashtra and Haryana added to its woes as state governments are a key source of money for political parties. The Congress is currently in power in nine states, but it can only hope to get financial help from cash-rich Karnataka.

The Congress had encountered problems raising money from the corporate sector over the decades that it was in power. A closed economy ensured that there was steady flow of funds from industrialists who were at the mercy of the government for licences and permits. The contributions got bigger and more hefty even when the economy was liberalised as the market was flush with funds.

The last time the Congress faced a serious cash crunch was post-emergency in 1977, when it was defeated by the fledgling Janata Party. However, it did not take long for the party to recover.

The present generation of Congress members are hoping for a similar miracle to rescue them from their state of penury.

This post first appeared on Scroll.in. We welcome your comments at ideas.india@qz.com.