INDIA ELECTIONS - MODI-MANIA - WILL REALITY LIVE UP TO THE HYPE?

Elections in India are an elaborate event much like the Big Fat Indian 

Wedding, only this one played out over a much longer period!  Indian politics is also caricatured as the “Great Indian Tamasha (show)”.  They election campaigns are loud, cacophonous affairs spanning over several weeks, this time to be held from April 7 to May 12, often screaming out catchy slogans with very little substance.

A vast majority of Indians are sick and tired of the UPA, the Congress-led coalition. In the past five years, Manmohan Singh has presided over an administration that has been afflicted by ‘policy paralysis’.  This has resulted in a decline in business and consumer confidence, growth to slide and corruption to soar with new investment coming to a virtual halt. The sense of frustration is palpable. The opinion polls indicate in no uncertain manner that Indians are dissatisfied with the way things were going and will wish to eject Congress in favour of the BJP.

About 815 million voters are eligible to vote in the current election. There is a brighter side to this story. Voter dissatisfaction is born as much of success as failure. As people have become gradually better off – or at least less abjectly poor – their aspirations have risen. The new electorate, including more than 100m first-time voters, is less concerned with caste and religion. Instead, it wants clean government and opportunity born of economic growth.

Indians are no longer placated by Congress’s brand of welfarism – NREGA – rural employment scheme, other handouts and food subsidies. Because of rampant corruption,

much of that largesse does not reach the masses with middlemen and politicians lining their pockets. Instead, they want jobs, better infrastructure, schools, hospitals, higher education opportunities and a chance to create a better life and realise their dreams.

Congress, has been ruling the country, thanks to the dynastic politics of the Nehru- Gandhi family for all but 13 years since independence.  It has now lost the trust and is seen as the ‘most corrupt’  with its series of scams from CWG, 2G, Adarsh, Coalgate to cite a few. The Congress party government lead by Prime Minister Manmohan Singh has in many ways upended the chances of a decent show at these elections.

The rise of new political forces, notably the anti-corruption Aam Aadmi party led by former civil servant Arvind Kejriwal, is a promising sign that voters are now demanding accountability.

The stage is now set for an alternative government, which is a good sign of a maturing democracy and demonstrates the people power thorugh throwing out corrupt governments.  Sadly, though there will be no single political party that will clear the half-way mark. The regionalisation of Indian politics has rendered the national parties at the mercy of smaller regional players to muster up the numbers required to form a government.

The key players

Narendra Modi, at 63, the leader of the Bharatiya Janata Party (BJP), which is ahead in most polls, is projected as an experienced administrator with a development track record that is referred as the ‘Gujarat model’.  During his 12 years as the chief minister of the state of Gujarat the State’s economic growth was strong, as was the case with a few other larger States. 

He is, however, viewed with suspicion by a section of the people over the 2002 Godhra riots, though a report submitted by the Special Investigations team (SIT – appointed by the Supreme Court) of lack of prima facie evidence of complicity was accepted by the Gujarat State High Court and he was absolved.

Rahul Gandhi, at 43, the scion and the standard-bearer for the ruling Indian National Congress (CON),

is projected as the candidate of the youth.  He has been a reluctant leader preferring to work in the background thus far and lacks the oratory and charisma of his father or grand mother.  His focus has been to strengthen the party at the grass roots level and introducing a pilot programme to select candidates through an internal democratic process like the US primaries. It remains to be seen how far has the party moved from the dynastic process to a democratic process.

He is fighting on the plank of his party providing:

·       People with the power to hold the administration accountable, by enacting enabling legislation like the Right to Information (RTI),

·         Food Security Bill and

·         Promising to bring in legislation for Women Empowerment

These are cornerstone issues in his campaign.

Arvind Kejriwal, at 45, is an accidental politician, stemming out of the India Against Corruption Movement spearheaded by Anna Hazare.  Kejriwal established the Aam Aadmi Party (AAP) in November 2012,  as he believed that electoral politics was the next logical step in the fight against corruption. In a surprise Delhi State Assembly elections, AAP emerged as the second largest party in a hung Assembly. He formed a Government with the support of CON but later resigned as the Chief Minister of Delhi after a 49 days stint, citing the failure to pass the Jan LokPal Bill in the Delhi Assembly.  He blamed the Congress and the BJP for stalling the anti-corruption legislation. AAP is expected to make a very minimal impact in this election as its funding and the organisational strength for a national election is virtually non-existent. Hence he will be an also ran until his party can develop a grass root level national presence.  

AAP, in its short life, has indeed changed the landscape of Indian politics with significant focus on Corruption and clean governance.  That should keep other parties on their toes, if not completely honest!

The Tamil Nadu Chief Minister, J.Jayalalithaa, at 65, has been leading the State very effectively.  She has been introducing several welfare schemes, which are funded by the rising tax revenues from the sale of Alcohol. She fancies her chances of becoming the PM by forging a rainbow coalition called the ‘Third Front. Stranger things have happened in Indian politics which saw a sleepy Deve Gowda becoming the PM!!! So, watch this space!!!

However, everything now points towards a NDA led government with the only question remaining on the number of parties required in the coalition to form the government.  The higher the number of political parties in the coalition, the greater will be the instability to the government resulting in its inability to spearhead reforms.

MODI, has the “TINA” FACTOR in the current environment

The Modi Campaign is running ahead with its catchy slogans of “Ab ki bar Modi Sarkar” (This Time Modi Government) and Har Ghar Modi (Every Home Modi supporter) with an expectation to get as close to the 272+ mark. 

  

Some of its slogans were so silly that at one point the RSS (which pulls the strings of the BJP) had to intervene to drop the “Har Har Modi” chant as that had idolised him as God!

What about Mr Modi? 

The BJP has refashioned itself over the years from a party associated with identity politics to a champion of good economic governance and business-friendly administration. This shift has been pronounced since the ascendancy of Modi, whose supporters point to a record of growth and relative efficiency in Gujarat.  His supporters claim that he can replicate his achievements witnessed in fast-growing Gujarat by cutting through bureaucracy and getting things moving i.e he will usher in the Gujarat model of development to the entire nation.

Hence the groundswell of support and the belief that “There Is No Alternative” (“TINA”) to Modi!!!

Let’s examine the various factors to assess how far this belief is well founded.

1.       “The Gujarat Model” of Development

Admittedly, Gujarat has recorded a growth of ~10% p.a. during the Modi years. Interestingly a host of Large States have also done well during this period.  In fact, Maharashtra and Tamil Nadu have done equally well with Tamil Nadu, Delhi and Goa outperforming all the States by a good margin.  So, what is common to all the States to have recorded growth rate of 9%+ p.a.

If we compare the growth rates across different regimes at the Centre, you can’t help noticing the fact that the growth was weak during the NDA period across all the States while growth rate significantly picked up during the UPA period up to 2011.  This underlines the impact of policy reforms at the Centre and its salutary effect on economic growth In the States.

Period	Growth - 5 yrs before NDA [1993-94 to 1997-98]	Growth - 6 yrs that NDA ruled [1998-99 to 2003-04]	Growth - 8 yrs after NDA [2005-06 to 2011-12]	Actual growth over last 5 years [2006-11]
Maharashtra	7.06	4.91	10.53	10.34
Tamil Nadu	7.51	3.78	10.22	9.42
Gujarat	7.36	5.59	9.99	9.34
Andhra	5.38	6.82	8.80	9.18
Karnataka	7.03	6.31	8.80	8.72
W. Bengal	7.35	5.72	7.19	7.46

Based on the above facts, one can reasonably conclude that the Gujarat growth has less to do with the ‘Modi’ factor and in fact,  more to do with the economic reforms of the UPA during its first term. 

As they say, “A rising tide lifts all boats”! So, there is nothing unique about the Gujarat model!!!

Gujarat mainly owes its growth UPA reforms and to its entrepreneurial Gujaratis.  Even the neighbouring State of Maharashtra which has stellar growth record, benefits hugely thanks to the entrepreneurial Gujaratis who dominate the business landscape in the State.

Due to lack of reforms in the UPA2, there has been a perceptible fall in growth rate, underlining the importance of reforms; a stark reminder of the salience of economic reforms on growth.  At best, Modi can be credited for cutting bureaucratic delays and implementing a few infrastructure projects.

But, Credit where credit’s due – Gujarat has wrested the No. 1 spot from Tamil Nadu on Economic Freedom. However, this did not translate into higher FDI with TN winning the Auto war!

 

But where the Government could have (and should have) made a significant difference i.e. in pursing social development and an inclusive agenda, it has sadly been lacklustre.

Hence, if any credit for growth is due, this should go to the Gujaratis’ who are known to be entrepreneurial and risk takers.  So it’s not the “Gujarat” model but it’s “GUJARATI” model.

The ‘Real’ measure of development – Backwardness Index

Modi’s record on social development has been abysmal and shows a misplaced urban growth model leaving a vast majority of the citizens behind.  Chandrababu Naidu was punished by the people for pursuing this kind of lop-sided development agenda in A.P.! 

Much against the popular perception, it is important to appreciate that social development is not about handouts or free lunch.  It’s about creating social infrastructure (not glittery buildings and 8 lane city roads) like hospitals, primary health centres, schools, universities, skills development opportunity, low cost housing, infant nutrition and other basic necessities.

Social development is where a government can truly distinguish itself by pursuing policies that enable inclusive growth.  Sadly, in the case of Gujarat, this has been lacking.  The Independent Committee lead by the RBI governor Raghuram Rajan, used multiple measures to assess the overall development in the State and ranked it at 12 way below its propaganda machine.

The committee assessed the development using an index of backwardness composed of 10 equally weighted indicators for monthly per capita consumption expenditure, education, health, household amenities, poverty rate, female literacy, percentage of the Scheduled Caste/Scheduled Tribe population, urbanisation rate, financial inclusion and physical connectivity. 

Here’s how the various States stack up on the Backwardness Index, low scores indicate good development:

 

How does Gujarat compare to Tamil Nadu?

Depending on how the final tally of results stack up, there is an outside chance that Jayalalithaa, the CM of Tamil Nadu, could fancy her chances of becoming the Prime Minister.  She has openly proclaimed her to be a PM candidate and has formed an understanding with Mamata Banerjee, the CM of West Bengal.  Together, they could hold the key to potential formation of the NDA government by Modi.  Jayalalitha intends to lead the ‘Third Front’, a rainbow coalition of all non-Congress and non-BJP parties. Of, course this would all depend on the final tally of seats.

Interestingly, Jayalalitha’s economic record stands taller than that of Modi’s on a broad range of measures.

Across all social aspects. TN is head and shoulders above Gujarat. TN is ranked as the third most developed State in India on a broad index of measures developed by the RBI.

In the event BJP falls short by a big margin, Jaya would have decent odds of staking a claim of forming a government, supported by a fractious coalition.

Having firmly established that Gujarat model is not completely attributable to him, let’s now examine other key factors of the Modi campaign.

2.       Corruption and Criminal elements

The Modi campaign has also been laying claims of ‘clean’ and efficient governance. Supporters of Modi claim that he is personally clean.  But, so is Mr, Manmohan Singh!  Presiding over corruption while claiming to be personally clean doesn’t wash as abetment to crime is a crime, nevertheless!

Modi’s brand of crony capitalism and his focus on industrialists like the Adani's and Ambani's is more of the same type of governance that Congress practice (may be less corrupt but corrupt nonetheless).  

Modi’s intimacy with the industrialists Adanis’ and Ambanis’ is not a secret.  Modi uses the private jets of the Adanis for his campaign and the stock price of Adani Enterprises has skyrocketed by 159% in the last 6 months is reflective of the expected quid pro quo!  Our paid media remains oblivious to this!

The Corporate India has thrown its weight behind Modi.   BJP is sparing no efforts in its campaign as this could well be its moment in history of achieving largest number of electoral seats.

The recent addition of tainted politicians like Yeddyurappa and Sreeramulu  into its fold in order to bolster its position amongst certain castes.  The addition of these two and a few others have left some of the party seniors disenchanted manifesting in public expression of displeasure by Sushma Swaraj, the senior most lady member of BJP.   Further, all parties have fielded candidates with criminal charges with BJP having the highest number of such candidates.

3.       Hindutva / Secularism

While BJP remains committed to its Hindutva stance (RSS still exerts a lot of influence on BJP), but it has scaled down its emphasis.  While the Modi campaign at the national level has hinged on Development, efficient and Stable government, the politics at the local is laden with its ‘Hindutva’ agenda. 

The struggle within the BJP between those trying to retain the core support base of the organisation through a Hindu nationalist agenda and those attempting to reach out to wider sections of the population through a more inclusive development programme is becoming apparent by the delay in the release of its manifesto and the toning down of certain agendas like No FDI in multil brand retail, restriction on GM, Temple issue etc.

The recent rant of Amit Shah, openly inciting hatred by calling for revenge for dishonour and goes on a step further by naming the State’s ruling party leader as Mulla Mulayam in a blatant attempt to imply that he is pandering to Muslims and thus fan the Hindutva sentiment.  He also pledged to dissolve the democratically elected State Assembly upon forming the government at the Centre.  This is flagrant violation of all democratic norms and exhibits rank intolerance of a kind that is pernicious for communal harmony and growth!

Finally, the latent Hindutva agenda will resurface with RSS elements trying to stamp their influence in the affairs. If the recent speech by one his trusted lieutenants is any clue to the inherent attitudes of these men, you don't need an oracle to foretell the future.

4.       Stability

The party is also suffering from internal dissensions over issue of tickets to both stalwarts and new entrants, and over admission of certain political leaders back into its fold (Yeddyurappa and Sreeramulu). They took swift action to expel another radical Hindutva leader in Karnataka.

The emerging new era of BJP led by the triumvirate (Modi, Rajnath and Jaitley) is causing deep fissures with many of the workers at a local level disenchanted in the way some of the seniors in the party have been sidelined.

For the moment, peace has been bought and It remains to be seen whether there will be further moves by the seniors within the party post the election results to launch a renewed offensive!

Even if the BJP wins, it may probably not earn enough seats to form the government on its own. The real political drama commences post the electoral results with each of the major party scrambling to cobble together a workable coalition with an array of rainbow political parties to achieve the magic 272+ mark required to form the government.  While there are pre-poll alliances of a few political parties, the post results scurry to reach the magic mark is largely driven by negotiations and personality politics rather than ideology or issues.  It’s not unusual to see the previously estranged groups becoming bedfellows!

That will put it at the head of a messy coalition. Many of the BJP’s state-level partners are also likely to prove noisy opponents of the deregulation and streamlining of government that is needed.  

Hopes of a BJP-led coalition to usher in reforms and pro-business policies may not be easily achievable.

CONCLUSION

In Summary, any administration would be more effective than the current UPA (which is in a state of shambles!).  So things can only get better and hence the Modi Sarkar's Acchey Din slogan captures this expectation quite effectively.

But there are many caveats.

While NDA will most likely get to form the next government, in my opinion, it's likely to be some form of a coalition.

The reliability of poll predictions made on a sample size of 35,000 spread over 500 constituencies to predict results that has several sub texts in its cohort in the form of caste, gender, income inequality, literacy, Rural vs. Urban, local issues etc. can be extrapolated to determine a seats forecasts within reasonable standard margin of error.  Social media and TV hype cannot be a reliable indicator of mood of the India’s electorate.  Remember, the pollsters got it totally wrong in 2004.

Furthermore, there is this inescapable reality of the nation’s fractured politics. Even the most lopsided of polls has the BJP coming to power in a coalition and short of the required majority by a good 30-40 seats. Modi’s free-market instincts are likely to be constrained by the preferences of regional allies and the RSS. Irrespective of what anyone says, it all depends on what sort of coalition comes together. No one can promise any real policy change / direction until then. 

The longevity and hence the impact of the next government is dependent on the strength or the fragility of the new government.  We just have to sit out and wait until the May 16^th!

Have your say and vote with your head!!!