Where do politicians invest?

The most obvious point about the affidavits filed by various politicians facing the voter in the current round of state elections (and in one Lok Sabha by-election) is the enormous distance that India’s politicians keep from the share market, and even from mutual funds, and how pre-modern they are in their financial outlook. The overwhelming bulk of the investments made by India’s politicians are in land and jewellery, and the bulk of their liquid savings are held as bank deposits. In West Bengal, Left politicians have showed a marked preference for life insurance policies, taken from the ideologically safe public sector Life Insurance Corporation.

The DMK chief K Karunanidhi, to take one example, has declared assets totalling Rs 22 crore, of which bank deposits are as much as Rs 18 crore and jewellery another Rs 1 crore or so. Similarly, property accounts for about half of Tamil Nadu Chief Minister J Jayalalithaa’s net worth of Rs 24 crore, and fixed deposits for around a tenth. Her investment in shares seems to be in her own enterprises. In the general elections of two years ago, a similar trend was evident. One of the exceptions to the trend was the BJP leader LK Advani, who had Rs 12 lakh in bank deposits and financial institutions, and Rs 14 lakh in mutual funds; his properties were worth around Rs 85 lakh.

One reason, you could argue, is that the old guard cannot be expected to keep its money in shares or mutual funds. But even with the new generation, there isn’t much of a difference in investment habits. Rahul Gandhi, for instance, has cash deposits worth Rs 40 lakh, so his holdings in mutual funds and shares (Rs 2 lakh in the latter) pale in significance. South Mumbai MP Milind Deora has Rs 26 lakh worth of shares and bonds, compared to Rs 15 lakh of deposits in banks and financial institutions and a similar amount in LIC policies, National Savings Schemes, and so on.

While such public disclosure of information on the assets of politicians is vital (at some point, it should be tallied with their known sources of income), a lot of the information being filed has little value because what is put down is the acquisition price of an asset. Sonia Gandhi’s farm in Delhi, for instance, is reported to be valued at Rs 2.19 lakh, and Rahul Gandhi’s a mere Rs 9.86 lakh. Given the astronomical value of farm land in the capital, these are huge underestimates and are probably mentioned as the historical cost of the farm land. It is obvious, therefore, that while filing the list of their assets, politicians should be asked to state the current market values of their assets. The result may be that India will have to reckon with many more crorepatis among its politicians.