Indian Elections: How much revenue generated during elections?

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Indian Elections: How much revenue generated during elections?

KAKALI DAS

India has already embarked on its electoral process, with the first phase of voting which took place on April 19^th.

Millions will line up outside polling stations, and regardless of their political preferences, they’ll share one common mark – the purple ink on their fingers, symbolizing the act of voting in India.

This ink isn’t ordinary; it contains silver nitrate, staining the skin purple, a mark that takes 2 to 3 weeks to fade, making it nearly impossible to wash off immediately. Known as indelible ink, its purpose is to deter voter fraud and ensure the integrity of the electoral process by preventing duplicate votes.

The indelible ink used for elections in India is produced by a small factory located in Mysore. Established in 1937, this company holds the exclusive authorization to manufacture election ink in the country.

This year, the company has already dispatched 2.7 million vials of ink, with more to come. While the company maintains steady business throughout the year, it experiences a significant surge during election seasons. In such years, its earnings increase by nearly $7 million.

Elections in India are significant events, marked by considerable economic activity. This year’s election is projected to be the most expensive in history, with an estimated cost of around 120 lakh crores, equivalent to $14 billion dollars. This staggering figure solidifies its status as the world’s most expensive election.

Approximately 20% of this budget will be allocated by the Election Commission for electoral expenses. The remaining funds will be utilized for various aspects of campaigning, including merchandise, travel, food, and other related expenditures, making elections a significant economic driver.

What does this economic landscape look like? Which products are the top sellers? And how much revenue is generated as a result?

In India, elections resemble a festival of democracy, featuring rallies and cultural events. Candidates engage in door-to-door canvassing, seeking to establish connections with voters. Merchandise plays a crucial role in this process, with flags, banners, pins, and badges prominently displaying party symbols and candidate faces to enhance visibility.

These items are typically low-cost; for instance, a single badge may cost around ₹1, equivalent to less than a cent, while a small flag ranges between ₹5 and ₹20, translating to less than a dollar.

Despite the low cost per item, the sheer volume of merchandise sold during elections results in significant spending and revenue generation. While merchandise is manufactured across India, certain hotspots like Surat in Gujarat, Mathura in the north, and Hyderabad in the south serve as prominent hubs for election-related goods.

These areas, typically focused on clothing production during regular times, pivot to producing flags and banners during election season. Some factories in these hubs churn out nearly a million flags every day, underscoring the immense scale of the market.

In 2019, merchandise sales reached a record high, and this year, they are anticipated to be even larger. Some traders forecast a surge of 30%, driven by all political parties, with particular emphasis from the ruling Bharatiya Janata Party (BJP).

The enthusiasm extends to online platforms as well, with ecommerce websites offering a variety of election-themed items including flags, pendants, pens, and mugs.

Previously, demand for election merchandise was primarily driven by two major parties – the ruling BJP and the opposition Congress.

However, there has been a noticeable shift towards regional parties, with demand for their merchandise reaching peak levels. Products featuring their logos are selling out rapidly, prompting both sellers and parties to innovate. New types of merchandise, such as clocks, dupattas, wind chimes, and even dream catchers adorned with party logos, have emerged to stay competitive in the market.

Estimates suggest that political parties spent close to ₹15,000,000 on merchandise, equivalent to around $600 million. This injection of funds provides a significant boost to small factories, leading to increased earnings for shops and the creation of more job opportunities for workers.

Indeed, elections are estimated to create as many as 10 million jobs in India across various industries. Take campaigning, for example: India’s vast size as the world’s 7^th largest country, spanning over 3.2 million square kilometers, presents logistical challenges. Candidates often have to cover extensive distances, sometimes traveling 100 kilometers or more across multiple cities in a single day.

As a result, there is a surge in demand for quick transportation options such as helicopters and chartered planes during elections. Helicopters are particularly favored by most candidates, to the extent that political parties have even engaged in battles over their availability.

Helicopters are favored for their accessibility, allowing candidates to reach rural and remote areas quickly. Additionally, they are more time-efficient. However, they come at a cost; the hourly charge for a helicopter is ₹1.5 lakh, approximately $2000. Sometimes, candidates opt for chartered flights, especially when traveling with an entourage.

These flights typically accommodate 10 to 15 people and cost between ₹4.50 to ₹5 lakhs per hour, roughly $6000. Parties also hire various other vehicles such as sedans, jeeps, and buses to transport candidates and workers.

In 2019, the Congress party allocated ₹1.26 crore for travel expenses, while the BJP spent over ₹2.50 crore. Estimates suggest that this year, these figures will increase significantly, with expenditures expected to be 40% higher than in 2019.

Then there’s the matter of food – campaign workers need to be fed, and voters often expect to be treated. For political parties, this represents another significant expense.

Now, let’s take a look at the dishes typically distributed during campaigns. The headliner? Biryani. It’s considered the best seller, given its popularity and versatility. Biryani varies from region to region, offering a special treat that entices voters. Moreover, it’s easy to prepare in large quantities and distribute, making it a hassle-free option for campaign events. Some say voters come for the party but stay for the biryani.

“Elections in India are significant events, marked by considerable economic activity. This year’s election is projected to be the most expensive in history, with an estimated cost of around 120 lakh crores, equivalent to $14 billion dollars. This staggering figure solidifies its status as the world’s most expensive election.”

Interestingly, biryani also holds political significance, sparking debates and even leading to fights. However, despite its controversial nature, it remains a staple fuelling the ballot.

However, not everyone can afford such treats, primarily due to rate cards established by district panels of the Election Commission. These rate cards set limits for election expenditure. For instance, in Punjab’s Jalandhar, a candidate is allowed to spend a maximum of ₹15 for a cup of tea or a samosa per person.

While not everyone strictly adheres to these rate cards, they do indeed exist and apply not only to food but also to other items such as flowers. Elections require millions of tons of flowers for various purposes, including decorating vehicles and making garlands for road shows and rallies. Flowers play a significant role in election campaigning, with sales increasing by 20% during the election season. In wholesale markets, daily sales peak at around ₹2.50 crores.

There’s a substantial demand for Marigold and Roses, especially for products like oversized garlands. Prices for these garlands range from around ₹3000 to as high as ₹50,000. The high cost of these garlands reflects the grandeur and significance attached to Indian elections.

It’s a phenomenon encompassing a travel boom, biryani balloting, flower power, and countless conversations. With everyone having their own perspective and arguments, the diversity of opinions makes it truly special – embodying the essence of universal participation in this festival of democracy.

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