Frequent polls may hit reforms: Panagariya

HAving to repugn elections in 1 or thomas more states every few months makes the unification regime hesitant to undertake reforms, economist and chairman of the 16th Finance Commission, Arvind Panagariya, has said in his submission to the Joint Parliamentary Committee examining the 129th Constitution Amendment Bill and the Union Territories Laws (Amendment) Bill, which are intended to facilitate simultaneous polls in the country, according to people aware of the details.Panagariya, who is scheduled to attend the committee meeting on Wednesday along with other economists, Montek Singh Ahluwalia and former member of the Prime Minister‘s economic advisory council Surjit S Bhalla, is learnt to have weighed in favour of simultaneous elections pointing out that the implementation of the model code of conduct (MCC) before elections “interrupts policymaking, delays procurement and project execution, and shortens the effective reform window for governments”.To be sure, the MCC is implemented only for the duration of the polls and bars governments from making new announcements or policy decisions, but does not impede ongoing work or undertake new projects in cases of exigencies.Pointing out that to ensure one election per state or union territory with legislature within a single five-year election cycle, he said that an election happens approximately every four and a half months –– resulting in 13 rounds of elections in all –– and that dissolutions of state assemblies before their full five-year terms leads to an even higher frequency of election rounds.Panagariya is also learnt to have referred to how legislative assemblies in seven states were dissolved two to three months before they completed their full five-year terms to hold the elections to the Lok Sabha and all state legislative assemblies simultaneously in 1957, providing a counter to arguments that moving to simultaneous elections would shorten the life of some assemblies.“He has explained how the first general election in India was spread over seven to eight months between October 1951 and May 1952, with different state assemblies elected at different points in time, because of which by the second general election, held during February-March 1957, there was a problem of the elections turning asynchronous. He pointed out how, the leadership of the day, considered it prudent to dissolve the legislative assemblies to ensure polls could be synchronised,” said a person aware of the details.As per the bill, the provisions of the amendment would come into effect on an “appointed date”, which the President will notify on the first sitting of the Lok Sabha after a general election.The bill says the “appointed date” will be after the next Lok Sabha polls in 2029, and simultaneous elections will be ready to roll out in 2034.Supporting synchronised polls, Panagariya is also learnt to have said that it would be “a reasonable hypothesis” that had the drafters of Constitution anticipated that under the rules they had laid down, the nation would one day find itself in a continuous cycle of elections, they would have opted for an electoral system similar to the one proposed by the Union government in the 129th Constitution Amendment Bill.Underlining the cost of repeated elections, he is learnt to have said every election is preceded by the implementation of the MCC, which puts on hold many policy decisions and official activities.“He cited his own experience and said the 16th Finance Commission became fully operational with all members and the minimum required staff in place in early 2024, but the members could not undertake their responsibility of visiting every state to consult with its government about its fiscal needs as the model code of conduct was in place and the state visits had to be deferred till June 2024,” said the person quoted above.Additional rounds of state elections between October and November 2024 further delayed the state visits, he said.He also flagged expenses on repeated security, polling staff and logistics and said the once-in-five-years election model offers a longer and clearer policy horizon for both state and central governments, lowering uncertainty and creating stability that encourages private capital formation.“Panagariya also pointed out that there is economic research that indicates that repeated elections can lead to considerable economic costs. He cited a paper by Stuti Kemani, titled ‘Political Cycles in a Developing Economy: Effect of Elections in Indian States’, in the Journal of Development Economics that finds that Indian state governments shift toward current and targeted expenditures, such as subsidies, rather than capital in anticipation of elections,” said the person quoted above.Panagariya is also learnt to have said that state elections generally have an impact on the spending behaviour of the Union government as well. “He said in his submission that if elections are simultaneous, such an impact is a one-time event in five years. The Union government’s ability to increase spending in the states to win elections in a single election year is limited by its capacity to expand the budget that year. In contrast, if elections are spread over all five years, its capacity to expand spending multiplies by a factor of five,” added the person quoted above.Announcements of large subsidies and transfers in 28 states and at the Union level by a political party are far less likely when elections are simultaneous, he is learnt to have said, adding that in simultaneous polls, promises of subsidies by a party from the Union Budget can substantially substitute for subsidies from the state budgets and vice versa.