Political finance, spending by political parties, can best be described as limitless and mysterious in Pakistan.

Charged crowds in public gatherings that look more like carnivals, complete with music and lively ambiance, is the new face of democracy in the country.

People who do not participate themselves watch the activity on TV. Do they know how much a jalsa (public meeting) costs? What does it take in terms of money to build an effective political campaign? Who pays for it all?

People guessed but their guesstimates were fractions of the actual budgets. They did not believe that party workers’ donation is the prime source of party income and ended up speculating.

Political parties in Pakistan have not been transparent in disclosing their financial affairs.

Though corruption has emerged as a major political issue that assumed a new level with the ouster of the former prime minister by the court for lying, the focus continues to be on individuals rather than the parties.

At times opposition parties accuse the ruling party of diverting public money to support party activities, but the issue has failed to get the attention it deserves.

Officials agreed over the phone from Islamabad that actual spending by politicians and parties is many times more than what they declare. How much more actually? They had no clue.

The Election Commission of Pakistan (ECP) was found to be preoccupied with legal proceedings. Many attempts to get information and insight on the issue from the secretary and other senior members in Islamabad did not yield results.

Do people know how much a jalsa costs? What does it take in terms of money to build an effective political campaign? Who pays for it all?

Dawn was informed that a cell on political finance exists but is currently dysfunctional.

ECP Director General (Law) Muhammad Arshad told Dawn from his office over the telephone, “An opinion on any legislation on political financing has never been sought during my tenure.”

The Federal Board of Revenue (FBR) that gauges income and expenditure of individuals and entities for taxation purposes said it was an implementing body and there is nothing explicit in the legal taxation framework on political parties and their financial conduct.

It was not able to explain why the FBR did not issue notices to political parties for not filing annual income tax returns when NGOs and CBOs are hounded perpetually.

The hierarchy in the FBR, however, was happy that parliament shot down a proposal in the Finance Bill 2017 that sought a blanket tax exemption for political parties. “It would have created another loophole for tax evaders,” said a member of the FBR.

Political activists reached were either ignorant or reluctant to share information that could land them or their party in trouble. The disclosures of event managers, transporters, caterers and decoration service providers in Islamabad and Lahore gave some idea of the costing.

According to people active in the circuit of political party leaders involved in logistics of the past few public meetings of PTI, PML-N and PPP, it costs Rs5 million on an average to arrange a public meeting of 5,000 people during day time in an open space, complete with sound system, security, transport, stage and seating arrangement. The cost doubles if food has to be served and hikes substantially at night-time.

In the break-up of the budget for a daytime meeting, security and sound system together makes up more than one-third of the total cost, followed by stage, seating, transport and the party’s promotional material (flags, banners, badges, etc). For a night jalsa, 20 per cent of the total cost is consumed by electricity that includes back-up generators and LCD screens.

The PML-N is the vendors’ favourite as they are said to be the most liberal spenders and settle dues swiftly. The PTI has the reputation of being a stingy, but generally credible, partner in financial dealings. The reputation of PPP is not good in this regard.

Vendors said the per-participant cost falls at bigger gatherings. They assessed that public meeting in small towns and villages tend to be costlier because of heftier transport and food cost. “Villagers expect a feast in a jalsa and parties can’t afford to disappoint the potential voters in a fiercely competing environment in an election year,” a political activist from Punjab told Dawn.

“Cost drivers are easy to identify but the income of parties and details of their key financiers are hidden. As the dealings are mostly cash-based, the verification of source is very difficult. The funding by powerful business lobbies is shielded by several layers of veils,” commented an executive of an advertising agency, hoping for dividends from an expected boost in political advertising campaigns.

“Effective politicking is an expensive business. There is a need to evolve a legal framework that corresponds to demands of time and incentivises disclosure and transparency,” commented a lawyer who found the current system driving political expenditure underground and promoting funding from illegitimate sources.

“The collective annual spending by competing political parties runs in billions, but a system to gauge, monitor and audit accounts or tax huge income has yet to evolve,” commented an analyst.

“Parliament should amend laws to make the filing of returns by political parties mandatory, as is the case in democracies around the world,” a senior FBR official keen to improve the tax-to-GDP ratio said.

Published in Dawn, The Business and Finance Weekly, October 3rd, 2017