Insights on India’s 2014 Election: Shankkar Aiyar and Pramath Sinha
The world’s largest democracy is all set to hold the largest ever general election. Between April 7 and May 12, the people of India will elect their representatives to the lower house of Parliament, or Lok Sabha.
It is the size and diversity of the population of India, which makes its deepening democracy special and such a huge achievement. This year, a staggering 814 million people will be eligible to cast their votes (100 million more than the last elections in 2009) across the country’s 543 constituencies. India’s often discussed demographic dividend will have an important role in the polls – there are 23 million new voters in the 18-19 age group.
It is no wonder then that the country is abuzz with talk of the elections. Who will win? By how many votes? What will that mean for the country?
A call for change
Currently, the main party in the opposition, the Bharatiya Janata Party (BJP), seems to be the frontrunner. This is largely because the ruling Congress Party faces a strong anti-incumbency sentiment. For instance, a nationwide survey conducted by the Pew Research Center shows that 70 percent of Indians are dissatisfied with the way things are going in the country. Overwhelming majorities say that inflation (89 percent of those questioned), unemployment (85 percent) and inequality (82 percent) are the country’s major problems.
Although the BJP and Congress are in many respects two sides of the same coin, the prevailing mood is for change – that anything would be better than what India has now. All reliable opinion polls place the BJP ahead of the Congress, though the margins of their predictions differ. According to the Pew Survey, Indians prefer the BJP to the Congress by more than three to one. By positioning himself as the solution to India’s governance and economic problems, the BJP’s prime ministerial candidate, Narendra Modi, , is leading the charge. His brand of economics demands focus on delivering growth through public and private investment.
Coalition government likely
India has not had a single party win a majority in the Lok Sabha in over two decades. In this election, too, the country is headed towards another coalition government. The present situation is very similar to that of the 1998 election: neither party is likely to emerge with a strong mandate. The BJP is likely to win 195-205 seats. Even if it achieves its best possible outcome of 244 seats, it will still fall short of the 272 seats needed to command a majority in the Lok Sabha.
In India, alliances win elections. Regional parties are important because they often pair with one of the two main national parties, before or after the elections. They can play the role of “kingmakers” or “spoilers,” and if they are powerful in the larger Indian states, they could win a large slice of parliamentary representation and wield significant influence over legislation and policy. Although the BJP is riding a wave of popularity, the Congress has a strong infrastructure of support in place.
Currently, the BJP seems to be doing a good job of setting up pre-poll alliances: for instance, it has stitched up alliances with five parties in Tamil Nadu to compete with the state’s major regional parties, and is tying up with small parties and independent candidates in states like Maharashtra and West Bengal. However, it still remains to be seen who the large regional parties – like Uttar Pradesh’s Samajwadi Party and Bahujan Samaj Party, West Bengal’s Trinamool Congress, and Tamil Nadu’s Dravida Munnettra Kazhagam (DMK) and All India Dravida Munnettra Kazhagam (AIADMK) – will side with after the polls.
After the election
The new government will have a lot on its plate. It will inherit a slow growth rate, a volatile current account deficit, an unstable rupee, a woeful lack of public services and a manufacturing sector that has virtually collapsed. To bring the economy out of the rut that it is in, the government will have to steer strong policy and administrative reform.
There is optimism among investors, analysts and consumers that a new leadership will help India regain its growth momentum and bring economic fundamentals back on track. However, a fractured mandate and weak coalition government could translate into another bout of policy paralysis and stalled reform. Although there is a school of thought that is pessimistic about India being stuck in an eternal “coalition era” where progress is impossible, it might be worthwhile to remember that India’s most memorable years of progress – between 1990 and 2004 – were under the leadership of two successful coalition governments, one led by Congress and the other by the BJP.
A large section of the country’s hopes are resting on Narendra Modi, who is often publicly lauded for his Gujarat growth model and strong administrative skills. Indeed, many believe that Modi as an individual and brand – “NaMo” to many of his followers – will be able to solve India’s economic problems. But it will be important to remember that being Prime Minister of the country is very different from being the Chief Minister of a state.
This reality prompts the questions: can Modi be Modi? Will politics permit NaMonomics? To bring India back on a high growth path, Modi will have to cut expenditure, raise taxes, target subsidies and raise money through privatization. Cutting expenditure or raising taxes is a bad idea when GDP growth is only 4.5 per cent. Slashing subsidies will be politically unpalatable even within his party. Induction of technologycash transfers via technology would help cut the subsidy burden, but the party has yet to articulate its view. And privatisation of Public Sector Undertakings (PSUs), which are losing half a million dollars every hour—seems off the table. This is not to say that the problems are intractable or that solutions are unavailable, but given the arithmetic of politics deliverance, Modi and the BJP will have to diligently manage relationships with their allies.
On the bright side, India’s economy has probably bottomed out and is unlikely to deteriorate further. Modi’s can-do attitude can go a long way in attracting investments and improving governance. For instance, the new government will probably be eager to push through the GST (goods and services tax) and raise the FDI (foreign direct investment) cap in insurance during the first two sessions of Parliament because these would be “easy wins” to take credit for. It can be hoped that if growth comes back on track after political uncertainty dissipates, the India-U.S. relationship will improve, because historically, it is when India’s growth falters that the attitude of the U.S. towards India falters.
To summarize, the Congress-led United Progressive Alliance has, over the past five years, been a disappointment. It has lost the voters’ confidence by getting immersed in a slew of corruption scandals. Its ineptitude at pushing reform and curbing inflation has sunk the economy into a trough.
In this context, the call in India is for change. Whether the BJP will be able to answer that call will depend on its own commitment to facilitating change, and its ability to garner and maintain electoral support. The strength of the country’s polity and economy will depend, to a large extent, on the strength of the coalition government that comes to the Centre.