With multi-cornered contests in most of the constituencies between NDA, UPA, regional parties like SP, BSP, AIADMK, DMK, Trinamool Congress, TDP, YSR Congress and the new kid on the block Aam Admi Party, it is assumed that each of the Parliamentary seats will have at least 3-4 serious candidates. Thus, each of the constituency may witness Rs 20-25 crore being spent on tough electioneering.
This would add up Rs 12,000-15,000 crore for electioneering. With addition of the official expenditure of at least Rs 1,000 crore and the other extra spend on logistics by the Central and State Government, the total election expenditure- official and unofficial, permitted and non-permitted could go near the Rs 20,000 crore mark.
The Assembly elections in Andhra Pradesh and Odisha will give another booster of Rs 1,000-1,500 crore, the chamber study said.
The businesses in the media- like television channels, newspapers, city hoardings, printers, social media, transport and hospitality- bus/taxi operators, tents/scaffoldings, caterers, airlines, will see the direct positive impact of the election budgets of the political parties as also the state machinery.
“However, the greater economic impact would be seen in the form of GDP multiplier effect since those earning from these would be spending at least 80-90 per cent of such earnings. The propensity to save is small among the workers, employees and even the owners of the unorganised businesses which will generally be more useful for electioneering excepting TV channels and newspapers,” Assocham President Rana Kapoor said.
However, he said that the study has sought to capture the ground situation and in no way reflects endorsement by Assocham on use of money power in elections.
"We stand for elections which are free from money and muscle power and do not support huge budget, even though the economy may get a consumption boost,” he said.
The Assocham study said it would be conservative to assume a multiplier effect of one: four to this expenditure.
The debate of accounted or unaccounted money notwithstanding, the Rs 60,000 crore booster to an economy resulting from multiplier election spend will make a big difference to the economic sentiment.
In case, the country is luck to get a stable government after elections, the sentiment will further improve breaking the vicious circle of slow investment and demand that the Indian economy has been witnessing for the last two years.