Sudden ban on higher denomination notes will pose challenges to poll budgets

PM Narendra Modi’s sudden announcement of an immediate ban of higher denomination notes of Rs. 500 and Rs. 1000 will pose immense challenges to the poll budgets of political parties.

 

212 local bodies across the state will go to the polls later this month, and the crucial BMC elections will be held in February next year. According to rough estimates, at least Rs 500 crore was set to be spent in the BMC polls by political parties – all of it in cash.

 

With this ban in place, political parties are now preparing for a cash crunch during the elections.

 

“Since there is no wave of any party or leader, these micro elections are money-managed. In rural and urban areas, a lot of money changes hands and each party has to shell out huge sums. So, flow of money during elections will be hit hard. It is unlikely that we will have a cashless election,” said a political analyst. Political observers said that each candidate spends at least Rs 50 lakh in his constituency in the city. While senior leaders admit that mobilising so much money before the elections will be tough, they will have to find a way.

 

 

‘Voters’ groups and local organisations will not budge and always demand money. We have to pay social groups and party activists, too. There is no way we can have a cashless election.

 

Even if one party tries to restrict use of cash, the other parties force us to do the same. We also need money to spend for canvassing and publicity material,” said a candidate from a leading party.