There are larger lessons for the BJP in the election defeats, but for now, perhaps a generous dose of populism is all that India will get a few months before the General Elections
It is rightly said that there is no such thing as the absolute truth.
The ‘invincibility’ of BJP under PM Narendra Modi, 50 years of BJP rule, Rahul Gandhi’s perpetual ‘Pappu’ status, Congress-mukt Bharat, non-existence of a strong & united opposition, a ‘carte blanche’ in the Hindi belt, no ‘popular unrest’ or anti-incumbency…
One day. Five state election results in Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram. And effectively a 0–5 score has changed a lot of ‘absolute truths’ for the ruling Bharatiya Janata Party.
It gives PM Narendra Modi and party president Amit Shah a lot to ponder over. However, the larger concern will be that this epiphany comes very close to the General Elections of 2019 (expected in April or May).
The trends in leads + wins in the five states show a virtual wipe out for the BJP in Chhattisgarh where it won 15 seats in the 90-member assembly (-34) and Congress took a comfortable majority with 68 seats (+29).
Rajasthan was closer with Congress just managing a majority at 101 seats (+80) out of 199 and the BJP taking 73 (-89).
Madhya Pradesh was more of a photo finish as the Congress fell just short of a majority taking 114 seats out of 230 (+56) and the BJP left at 109 (-56). On the flip side for the Grand Old Party, it lost out to TRS in Telangana and is also out of the Northeast with the MNF taking Mizoram.
The personality of Narendra Modi on the national stage may be quite invincible yet, and the elections have shown that Madhya Pradesh and Rajasthan have been no walkovers for the Congress either despite what should have been a strong anti-incumbency factor after 15 years of BJP rule in both states. However, the BJP certainly cannot take these results lightly.
Besides state-specific factors, real issues like farmer distress and unemployment have a pan-India resonance that could hurt the BJP severely in the General Elections as well.
To merely promise that the government will double farm incomes by 2022–23 would never have been enough. Even statistically that would require annual agricultural growth of 10.4% according to economist Ashok Gulati.
In the last four years ending 2017–18, farm income has been growing at (-) 0.2%, 0.6%, 6.3% and 3%. Instead of unrealistic future projections, BJP should have been looking at the urgent demands on minimum support price (MSP) and addressing problems of loans and farmer suicides.
Lessons for the BJP in the election defeats
In addition, India has around 30 million unemployed in 2018 with an unemployment rate of 6.9% in October according to CMIE (Centre for Monitoring Indian Economy). Clearly, this problem is not vanishing anytime soon either.
Demonetisation has clearly failed, and the criticism for the exercise is now coming from all quarters. In fact former Chief Economic Adviser Arvind Subramanian has called it “a massive, draconian, monetary shock” and also hinted that he was not consulted on the matter at all.
GST has not really been formalised properly, and its short term impact has been mostly negative for small businesses according to various reports.
But ‘short term’ is the way forward for the BJP now, a few months from the General Elections. Arguably, this is the period that economists fear most, as populism tends to take over.
The change of guard at the RBI is an indication of things to come with bureaucrat and Secretary Economic Affairs Shaktikanta Das (incidentally the person who also oversaw demonetisation replacing RBI Governor Urijit Patel who resigned unexpectedly on December 10.
Or perhaps not so unexpectedly, as it is generally believed that the government’s constant pressure and attempts to control the RBI’s functioning led to Urijit’s exit.
The Government has little fiscal room for populist measures like farm loan waivers and boost to businesses for better employment numbers. India Ratings has indicated that India is already set to breach its fiscal deficit target of 3.3% of GDP and reach 3.5% in 2018–19.
But better control over the RBI could be a blessing. On the anvil could be recapitalisation of banks and even lenders, prompting greater leverage in formal banking sector as well as informal shadow banks. Undermining of the independence of the Central Bank is obviously raising the heckles among the intellectuals, but that is probably not a major electoral risk.
Farm loan waivers could be on the anvil as well, along with possibly some action on the Ram Temple, where the RSS is raising a ruckus already with the mega rally in Delhi.This reminds us of the popular quote, “Those who do not learn from history are doomed to repeat it.”Unfortunately in the Indian democratic ecosystem, ‘unlearning history’ is a character trait that comes naturally to politicians, a fact that is proven time and again.