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MLAs getting richer faster than MPs

PC Mohan, Member of Parliament (MP) from Bangalore Central, saw his assets grow from Rs 5 crore in 2009 to Rs 47 crore this year, growth of a whopping 786 per cent. He isn’t the only MP whose wealth grew exponentially between the two Lok Sabha elections. According to data compiled by the Association for Democratic Reforms (ADR), the net worth of many MPs has grown in excess of 200 per cent.

But an ADR analysis shows when it comes to wealth creation, members of legislative assemblies (MLAs) have done far better than MPs in the past five years.

This year, as many as 168 members were re-elected to the Lok Sabha; the average assets of 165 of them stand at Rs 12.78 crore, up 137 per cent compared to the 2009 Lok Sabha elections. But the average assets of MLAs re-elected in Madhya Pradesh are up 290 per cent, Haryana 245 per cent, Maharashtra 157 per cent and Chhattisgarh 147 per cent. All these elections have taken place in the past 10 months.

Between 2009-10 and 2013-14, India’s per capita gross domestic product (GDP) at nominal prices grew 60.8 per cent.

“When it comes to economic matters, state governments have a far bigger role to play. Whether it is acquiring land for a major project or issuing a licence to a private university, the role of the state government has become very important. MLAs are bound to be natural beneficiaries of this heightened economic activity,” said Manindra Nath Thakur of Jawaharlal Nehru University.

The average assets of re-elected MLAs in Haryana and Maharashtra are comparable with the average assets of re-elected MPs. In terms of the absolute rise in assets of all MLAs from Madhya Pradesh and Chhattisgarh, these states have some catching up to do (the rapid rise in assets of MLAs in these states could be because of a low base). The per capita GDP of Haryana and Maharashtra are higher than those of Chhattisgarh and Madhya Pradesh.

Yet, Madhya Pradesh and Chhattisgarh now have more than 70 per cent MLAs with assets of more than Rs 1 crore. An average MLA’s net worth in Chhattisgarh is Rs 8.8 crore; in Madhya Pradesh, it is Rs 5.24 crore. In 2008, the average assets of MLAs in Chhattisgarh stood at Rs 1.45 crore.

“Many politicians are directly or indirectly involved in the real estate business. With appreciation in property prices, the assets of MLAs would have increased,” said Yatindra Singh Sisodia of the Ujjain-based Madhya Pradesh Institute of Social Science Research.

V B Singh, former director of the Centre for the Study of Developing Societies, however, said the difference between the growths in assets of MPs and MLAs could be because of under-reporting. “It is hard for MLAs to hide details of their assets because of the localised nature of their politics. Their declarations are closer to reality. MPs do not face such intense scrutiny at the local level,” he said.

The financial muscle of lawmakers is increasing even as voters’ preference for rich candidates rises. In this year’s Lok Sabha elections, for instance, one in five candidates worth more than Rs 1 crore won, against one in 50 for those worth less than Rs 1 crore. As such, the possibility of rich candidates entering Parliament is 10 times more than that of others.

Preference for rich candidates is catching up in poor states. In the November 2013 Assembly elections, the chances of winning for candidates worth at least Rs 1 crore in Madhya Pradesh and Chhattisgarh stood at 46 per cent and 42 per cent, respectively.

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