At 1 a.m. on a Sunday, vehicles zip through the barricade of the Langar Houz police check post in Hyderabad that has been set up to curb the clandestine flow of money, alcohol, narcotics, and contraband goods in the run-up to the Telangana Assembly elections on November 30. Inside the makeshift police outpost, three police officials are engrossed on their phones even as a walkie-talkie perched on a plastic chair next to them constantly buzzes with messages. In one corner, two CCTV cameras silently watch over the proceedings.
This check post, placed between the Cyberabad and Hyderabad Commissionerates, about 10 km apart, is just one of the dozen such outposts set up by the Election Commission of India to enforce the Model Code of Conduct in the poll-bound State.
The polling date is still more than a month away, but the check posts have already made a startling seizure of illicit assets, amounting to ₹340.11 crore as of 9 a.m. on October 25. This includes gold and precious metals worth ₹156.07 crore, ₹119.44 crore in cash, and liquor worth ₹18.67 crore. However, the income tax department says that only ₹1.76 crore is unaccounted for. The rest has been returned to the rightful owners.
The announcement of elections days before Dasara and the impending wedding season has cast a shadow over various businesses, especially those that rely heavily on cash transactions. Stringent enforcement measures and seizures have disrupted various sectors, leaving traders grappling with uncertainty during a critical time for their revenue influx.
A common refrain echoes through the market: “Dhanda kharab ho gaya (Business has been ruined).” Suresh Chand Kothari, secretary of the Pot Market Jewellers Association, says, “The election commission officials are enforcing the rules, but we have to bear the brunt. But ups and downs are part of the business.” Summing up the prevailing sentiment in the market, he adds, “Dahshat bhi hai (There’s a sense of dread too).”
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This fear gripping the gold market has led to a conspicuous absence of shoppers on the bustling high street of Somajiguda, just a stone’s throw from the Chief Minister’s camp office in Hyderabad. This usually congested stretch that houses big-chain retailers such as GRT, Tanishq, Tribhovandas Bhimji Zaveri, Kirtilal’s, and Malabar Gold is suddenly free of traffic gridlocks, even on weekends.
“We are not getting into the reasons. The departments concerned are looking at what all this money is about, and why it is flowing in at this scale,” says Vikas Raj, the Telangana Chief Electoral Officer. The State election authority finds itself inundated with complaints from various sections of businesses, especially petrol pumps and LPG dealers, liquor outlets, and jewellery stores, all of whom are contesting the seizure of legitimately acquired items. “We need to find a way where genuine interests are protected while preventing the scope of misuse of assets for voter inducement. At the same time, we cannot allow people to carry out clandestine business dealings,” he says.
According to the guidelines issued by the Election Commission of India, “During checking, if any cash exceeding ₹50,000 is found in a vehicle carrying a candidate, his agent or party worker, or carrying posters or election materials or any drugs, liquor, arms or gift items valued at more than ₹10,000 likely to be used for inducement of electors or any other illicit articles are found in a vehicle shall be subject to seizure.”
The guidelines suggest that if cash exceeding ₹10 lakh is found in a vehicle and there is no suspicion of criminal activity or connections to a candidate, agent, or party functionary, the static surveillance team should not seize the cash but instead, report the incident to Income Tax authorities for necessary action.
However, people are fearful of carrying any valuables with them, because, as Vikas Raj says, “They now have to prove that it is genuine money. We will enquire about what papers and proof one has about the money.”
Blow to businesses
“Our festive season is over,” laments Varun Kothari, a jeweller at Pot Market in Secunderabad, the hub of gold and silver jewellery, with both small and medium enterprises. The Secunderabad Railway Station is in its vicinity, drawing patrons from across the State to this area. “They are checking and seizing cash above ₹50,000. A tola (about 10 grams) of gold is valued at ₹61,300. How will customers make purchases?”
For the business community, Diwali traditionally marks the beginning of the trading cycle, with a one-hour mahurat trading session followed by the customary worship of Goddess Lakshmi at homes and shops.
“Dasara has come and gone, and Diwali will be affected as well. We usually see a surge in sales on Dhanteras, but that too will be impacted. Even the upcoming wedding season faces uncertainty,” says Varun Kothari, who owns Bhagyalakshmi Jewellers, in Pot Market. Gems and jewellery contribute 7% of India’s GDP, according to the Ministry of Commerce and Industry. The sector employs 50 lakh people.
There are also the large chain jewellery stores in the lively Somajiguda area that deal in daily use, fast-moving items such as chains, rings, bangles, earrings, and diamond jewellery. This area now wears the label of the second-best high street in the country, just behind Bengaluru’s MG Road, according to a study by Knight Frank, international real estate consultants.
Curbing cash, liquor flow
Between October 3 and 5, Central Election Commission officials led by the Chief Election Commissioner (CEC) Rajiv Kumar visited Telangana to assess the State’s poll-readiness, and met party leaders, district election officials, and police officials, among others.
On October 9, the CEC announced election dates for five States, with Telangana’s polling scheduled for the last phase on November 30. Within two days of this announcement, he ordered mass reshuffling of police and district officials. At a press conference the CEC cited the flow of money and liquor in the by-elections held in Telangana had been noted by the commission. Swiftly thereafter, the seizures soared, from ₹20.4 crore on October 9 and 10 to ₹78 crore of cash and precious metals seized on a single day from the morning of October 18 to 19.
The poll code enforcement has affected an essential lubricant of the election season — the liquor trade. A member of the Wine Dealers Association of Telangana says, “We are struggling to transport cash. The police and enforcement officials wait near banks and shops, apprehending people bringing in money.” This is earned money from the day’s trade, he adds.
To sustain their businesses, liquor dealers are compelled to transport modest sums of cash. “The real problem arises at night when we have to close the shops. Many dealers do not have safe boxes in their stores, and that is a big issue even though the trade is entirely legitimate,” he says, unwilling to disclose his identity.
Some shopkeepers have put up notices outside their outlets that read: “Telangana Election Code. Please request to pay using online payments. We accept (sic).”
‘Streamlined now’
Around 10.30 p.m. on October 17, the check post at Gadwal on NH-44 intercepted a vehicle carrying ₹750 crore in cash. News of this enormous seizure quickly spread across social media, creating a buzz that left many astounded. Then, the truth behind the seizure was as sobering as a splash of cold water — it was a chest-to-chest money transfer by the Union Bank of India, which was moving funds from Kerala to Hyderabad.
“Things have been streamlined now. Over the past few days, the seizures have come down to ₹3 or ₹4 crore. The Election Commission has implemented Standard Operating Procedures (SOPs) that include a QR code on the ‘cVIGIL’ app for secure money transfers. The grievance cell is operational in all districts to ensure that legitimate businesses are not affected,” says Police Expenditure Monitoring nodal officer for Telangana, Mahesh Bhagwat.
Sharing details of an incident involving a local gold trading firm that retrieved its seized jewellery within the city and later in Nalgonda, Bhagwat adds, “The trader recovered the 5 kg of gold as he had all valid documents. But the Income Tax department gets involved when it is about a large amount of cash or jewellery.”
The fear unleashed by the seizures of cash and valuables extends beyond Telangana, casting its shadow over the other four States gearing up for elections — Rajasthan, Chhattisgarh, Madhya Pradesh and Mizoram.
Enforcement agencies, until October 19, had seized cash, gold and silver, liquor, and various giveaways valued at over ₹243 crore, within just 11 days of the announcement of the election schedule. To put this in perspective, this figure dwarfs the total seizures of ₹111 crore in over two months during the previous elections in 2018 and ₹76 crore seized during the 2014 elections in the erstwhile united Andhra Pradesh.
Traders’ appeal
While individual traders are guarded in their response due to the fear of enforcement agencies, their apex body has written to the CEC drawing attention to the scale of the problem.
“We invoke your attention towards checking and withholding of legitimate cash belonging to traders by police authorities and others during the movement of traders from one place to another for business purposes. Currently the festival season is going on, which will be followed by wedding season, and during this period, the trading community expects good business and therefore the movement of cash is a routine exercise of the business,” reads an excerpt of the letter sent by the Confederation of All India Traders general secretary Praveen Khandelwal to the CEC.
A few days before the letter was sent, the Confederation of All India Traders had issued a statement about the country solemnising 35 lakh weddings in 23 days between November 23 and December 15 with expenditure projected at an eye-popping ₹4.25 lakh crore.
Sifting through the seizure
At the district level, a three-member committee has been constituted, comprising the Zilla Parishad Executive Officer, Project Director of District Rural Development Agency the nodal officer for expenditure monitoring within the district election office, and the district treasury officer. This committee is entrusted with the responsibility of avoiding inconvenience to the general public and addressing grievances of persons. It has been mandated to suo motu examine each case of seizure made by the police, Static Surveillance Team, or flying squads.
In cases where the committee finds that no FIR or complaint has been lodged, or that there is no direct connection to any candidate, political party, or election campaign, it should take immediate steps in line with the SOPs to order the release of the confiscated cash and valuables to the rightful owners, after passing a speaking order to that effect. The guidelines guidelines clearly state that in no case should the valuables be kept pending in the police malkhana (treasury) for more than seven days following the polling date, unless an FIR or complaint has been filed. It shall be the responsibility of the returning officer to bring all such cases before the appellate committee and to release cash and valuables.
