Politicians from Mumbai have seen their assets grow faster than the city’s market growth, which includes property rates, stock market and bank deposit rates. The findings are part of an ongoing study — Unraveling corruption in India:
Politicians in the spotlight — conducted by the economics department of the Mumbai University.
The study compared the asset growth of 54 candidates from the city, who contested the 2004 and 2009 general elections as well as state assembly polls, to the city’s market growth during the same period.
The research reveals that assets of 27 candidates, who won the polls in 2004, grew at a rate consistently greater than the market growth rate. While the assets of MPs increased by 208%, MLAs' assets grew by 240%. The market growth, however, was just 97% between the general elections of April 2004 and April 2009, and it was 163% between the assembly polls of September 2004 and September 2009.
"There are two forms of corruption: illegal or blatant corruption and legal corruption, which takes place because of the information advantage that politicians have over others," said Abhay Pethe, economist with the department, who is guiding the study. “It is obvious that even a specialist can’t beat the market consistently, but our politicians have beaten it because of the information advantage.”
For instance, politicians may cash in on info about a project planned in an area, which would lead to an increase in property rates in the surrounding areas. “This information is exploited ‘legally’ by politicians to make private gains before it is made public and is discounted by the market,” said Pethe.