India’s democracy has witnessed an unsettling transformation in recent years, as the worlds of politics and business become increasingly intertwined. This phenomenon, described as “oligarchisation”, has led to the concentration of political power in the hands of a wealthy elite, raising profound concerns about governance, accountability, and equality in the world’s largest democracy. Drawing on ethnographic fieldwork and candidate affidavits from the 2024 state assembly elections in Andhra Pradesh and Odisha, it is important to examine how the growing fusion of economic and political power is reshaping India’s democracy.
The rise of wealth in Indian politics
Over the past two decades, politicians in India have become significantly wealthier, with their fortunes often far outpacing the economic growth of the states they represent. For example, Nitin Anand (name changed), a four-time MLA in Andhra Pradesh, saw his declared assets grow from Rs 5 lakh in 2009 to Rs 20 crore in 2024 – a staggering 40,000% increase. Anand’s career demonstrates how political office is leveraged to secure lucrative opportunities in sectors such as real estate, infrastructure, and education. His political clout enabled him to bypass regulatory hurdles, secure government contracts, and expand his business empire.
This trend is not limited to a few high-profile individuals. In Andhra Pradesh, the average wealth of MLAs rose from Rs 3.25 crore in 2009 to Rs 60.74 crore in 2024, an 18-fold increase. Odisha, saw a four-fold rise from Rs 1.75 crore to Rs 6.14 crore over the same period. Similarly, the proportion of politicians with business backgrounds has grown steadily, with Andhra Pradesh’s assembly seeing an increase from 34% in 2014 to 39% in 2024, and Odisha seeing an increase from 23% to 34%.
Such an increase in wealth far outpaced the average income growth in Andhra Pradesh (incomes grew 4.7 times in this period) but not in Odisha (where incomes grew 5.0 times). Yet, generally speaking, we can conclude that politicians ere already well-off in 2004, but now they belong to the small strata of the super-rich. And for some politicians like Nitin, this growth has been exponential in nature. These figures reveal a gradual yet systemic shift in the political landscape, where wealth and business acumen are becoming prerequisites for political success.
Voter expectations and campaign financing
One of the key drivers of this transformation is the rising cost of election campaigns, fueled by voter expectations for monetary incentives. During the 2024 elections, fieldwork in six districts across Andhra Pradesh and Odisha revealed that candidates spent vast sums on cash handouts, liquor distribution, and other inducements. In Andhra Pradesh, campaign expenditures ranged from Rs 25 crore to Rs 64 crore per candidate, with up to 70% of budgets dedicated to voter incentives to be distributed individually by candidates. Odisha saw candidates spending relatively more modest sums of between Rs 9 crore and Rs 20 crore in similar campaign expenses.
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This reliance on money-centric campaigning reflects a pragmatic voter mindset. Many voters view cash handouts as compensation for the exploitation they anticipate from politicians post-election. A voter in rural Andhra Pradesh articulated this sentiment: “They are looting us, so why shouldn’t we loot them?” This expectation pressures political parties to nominate candidates with the financial resources to meet these demands, often favoring businesspersons over grassroots leaders. The result is a self-reinforcing cycle where wealth becomes both the means and the end of political power.
Candidates, too, have adapted their strategies to maximise voter loyalty. In rural districts, money is distributed in a calculated manner, often just days before the election, to ensure its impact remains fresh in voters’ minds. Local agents, including party workers and influential community members, play a critical role in this process. However, their involvement further inflates campaign costs, as they demand compensation for their efforts. The growing costs of mobilising votes have entrenched the need for wealthy candidates, further blurring the lines between economic privilege and political influence.
Economic incentives and state dependency
The oligarchisation of India’s democracy is also deeply rooted in the state’s regulatory control over key economic sectors. Despite the partial dismantling of the license-permit raj, access to resources such as land, mining rights, and infrastructure contracts still requires strong political connections. For many business actors, entering politics is a strategic move to secure and expand their economic interests.
In Andhra Pradesh and Odisha, this interplay between business and politics is particularly evident in “rent-thick” sectors like real estate, construction, and natural resource extraction. For example, a builder-turned-politician in Odisha used his MLA status to monopolise infrastructure contracts and strengthen his party’s finances. Similarly, a transport entrepreneur in Andhra Pradesh leveraged his political office to secure favourable deals, including a near-monopoly in local transportation. These cases illustrate how political power is often wielded to bypass regulatory barriers, secure government contracts, and consolidate economic dominance.
This state dependency varies significantly between Andhra Pradesh and Odisha, reflecting their differing economic contexts. Andhra Pradesh’s diversified economy, with thriving real estate and services sectors, offers more opportunities for rent-seeking compared to Odisha, which remains reliant on agriculture and resource extraction. These disparities are reflected in campaign expenditures, which are three to four times higher in Andhra Pradesh.
The consequences of wealth-driven politics
The fusion of economic and political power has far-reaching implications for India’s democracy. Governance becomes skewed towards protecting the interests of wealthy elites, often at the expense of broader societal needs. Institutions that should act as impartial regulators are repurposed to serve private interests, undermining public trust and accountability.
Furthermore, the dominance of affluent candidates undermines political equality. Aspiring politicians without substantial financial resources face insurmountable barriers, reducing the diversity of representation in legislative bodies. This economic gatekeeping distorts the democratic ideal of fair competition, making political power increasingly inaccessible to ordinary citizens.
Toward reform and accountability
Addressing these challenges requires systemic reforms. Campaign finance laws must be strengthened to reduce the reliance on personal wealth for electioneering. Transparency in political funding is crucial to holding candidates accountable and curbing the influence of undisclosed donors. Public awareness campaigns can also play a role in shifting voter expectations away from cash handouts and toward issue-based voting.
Additionally, political parties need to invest in rebuilding grassroots organisations. Strong party networks can reduce dependency on wealthy candidates by providing alternative means of voter mobilisation. Such reforms are essential for breaking the cycle of wealth-driven politics and restoring faith in India’s democratic institutions.
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The oligarchisation of India’s democracy reflects a broader global trend where wealth increasingly dictates political outcomes. However, the stakes are particularly high in India, given its high levels of inequality and that it is a nation that prides itself on its democratic ethos.
The growing influence of business elites in politics threatens to transform governance into a transactional enterprise, undermining principles of equality and accountability. To safeguard its democracy, India must confront this challenge with urgency and resolve.
Ward Berenschot is a professor in comparative political anthropology at the University of Amsterdam and a senior researcher at the Royal Netherlands Institute for Southeast Asian and Caribbean Studies (KITLV), Leiden. Sarthak Bagchi serves as assistant professor at School of Arts and Sciences, Ahmedabad University. Vignesh Karthik K.R. is a postdoctoral research fellow of India and Indonesia at KITLV, Leiden and a research affiliate at King’s India Institute, King’s College London.
