The common perception is black money are disproportionately cornered by the rich and corrupt politicians. Recent estimate suggests increase in income inequality - gap between top 10 percentile and the poorest 50 percentile of the population - has been on rise since 1995. The richest 1 percent Indians own 53 percent of the country's wealth. India is more unequal in comparison to Russia, the US, China, and Brazil.

Looking at data relating to declared assets of politicians make one thing clear: they are increasingly becoming rich more than what their salaries would justify. Members of Parliaments in India are entitled to Rs 50,000 per month as salary, and Members of Legislative Assembly (MLA) typically get lower salary than this.

We examined official assets holding for re-contesting candidates (who were MLAs in last election). The states considered are Bihar, Tamil Nadu, West Bengal, and Uttar Pradesh.

During 2015 there were 160 such candidates in Bihar who have won election in 2010 and have again contested in 2015. The average assets holdings of these candidates were Rs 2.5 crore. This is equivalent to the on-road price of five top-of-the-line Mercedes Benz C-Class cars (in Delhi). Between 2010 and 2015, financial wealth of these candidates have grown at an average annualised rate of 24.4 per cent.

Even accounting for factors such as inflation, these are big numbers. Although impressive, Bihar's economic growth looks tiny compared to the growth in the economic fortunes of these politicians. Between 2010-11 and 2013-14, Bihar’s Gross Domestic Product grew at an average annualised rate of 10.4 per cent. Annualised per-capita income went up from Rs 10,635 in 2009-10 to Rs 15,650 in 2013-14, a modest annualised increment of 10 per cent.

In case of Tamil Nadu, there were 89 MLAs who have re-contested in 2016 having won election in 2011. The average assets holdings of these candidates increased from Rs 4.35 crore in 2011 to Rs 8.63 crore in 2016. Between 2011 and 2016, the average annualised increase in assets holdings for AIADMK MLAs increased by 16.8 per cent. The corresponding figures for DMK, DMDK, CPI, CPI(M), PMK, and INC MLAs are 11.7 per cent, 12.7 per cent, 11.2 per cent, 5.3 per cent, 13.4 per cent, and 13.4 per cent, respectively. For West Bengal, there were 245 sitting MLAs who re-contested election in 2016. The average assets of these candidates increased from Rs 60.1 lakh in 2011 to Rs 1.27 crore in 2016. Between 2011 and 2016, the top three MLAs who witnessed highest growth in assets are all from the ruling TMC party.

Uttar Pradesh is no different. Data for 2017 is yet to be released. However, the reported growth in assets of re-contesting candidates between 2007 and 2012 convey the same story.

An intriguing question in political economy is how politicians get re-elected in spite of the public perception that they are corrupt. The answer, perhaps, lies in the shortsightedness of the voter, who cares more about living in the present even at the cost of an uncertain future (read, a hollow state exchequer).

In West Bengal, which has a much lower per-capita income than Tamil Nadu, the TMC government has been distributing subsidised rice to poor, has constituted the kanyashree scheme for girls and donating money for club funds (typically run by otherwise ‘unemployed’ party workers).

In Tamil Nadu, which has a much higher level of urbanisation and industrialisation, the freebies include high-end consumer durables such as television sets, laptops for students, mixer and grinders and LPG stoves, and the running of heavily subsidised food canteens. In Uttar Pradesh, candidates are offering laptops, cell phones, bicycles, and pressure cookers. In Goa, candidates are offering cheaper petrol, free data, and free health check-ups for women.

While some of the freebies are welfare augmenting with a direct impact on health and education outcomes, most others such as the consumer durables are not. In fact, a visionary politician should properly implement welfare schemes. The good news is in the last budget the government has amended law to ban anonymous political funding with a maximum limit of anonymous cash payment now reduced to Rs 2,000, from an earlier Rs 20,000. However, more needs to be done as this Rs 20,000 can still be broken down to less than Rs 2,000 by showing contribution from more number of party workers. (IPA Service)