After state polls, what will change? : The Tribune India

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After state polls, what will change?

After almost a year of adverse developments, beginning with demonetisation last November and going on to the adverse fallout of the Goods and Services Tax, the NDA dispensation appears to have hit a sweet spot - receiving a succession of positive report cards.

After state polls, what will change?

POLL TIME: A leader canvasses for votes in Gujarat. PTI



Subir Roy, Senior journalist

Subir Roy, Senior journalist

After almost a year of adverse developments, beginning with demonetisation last November and going on to the adverse fallout of the Goods and Services Tax, the NDA dispensation appears to have hit a sweet spot - receiving a succession of positive report cards.

First came the sharp jump in India's rank in the World Bank's Ease of Doing Business league table. This was followed by the global rating agency Moody's upgrading India for the first time in 13 years. And most recently has come the opinion survey by the US-based Pew Research Center finding popular support for Narendra Modi running at an 88 per cent high, compared to 58 per cent for Rahul Gandhi. 

Unsurprisingly, opinion polls and journalists' surveys put the BJP in a winning position by a handsome margin in the Himachal Pradesh Assembly elections and by a narrower but decisive margin in Gujarat. But thereafter has come the alliance between the Congress and the section of Patidars led by Hardik Patel. This has added a sharper edge to the challenge posed by the Congress to the long-term incumbent. Even before the alliance, there was visible discontent, described as unprecedented, among sections of the BJP over ticket distribution. 

The Congress-Hardik alliance has not by any means enabled the Congress to get under its belt the entire Patidar vote but the contest has just got keener. This makes a scenario building to gauge possible outcomes more difficult but that exercise still needs to be undertaken so as to get a measure of the policy options which will be before the BJP in the run-up to the 2019 parliamentary elections.

Recall that after scoring a resounding victory in the 2014 parliamentary elections, the Modi bandwagon met with two setbacks in the Assembly elections: in Delhi and Bihar. Thereafter, for the UP Assembly elections, the party followed a strategy of seeking short-term safety - Hindu consolidation plus pragmatic adjustments based on caste and the pull of local leaders, some of whom had defected to the party not too long before the elections. 

This proved to be a winning formula and in its Gujarat campaign, the BJP has followed the same to the hilt. The Hindutva card is being played with a vengeance and a new low has been reached by a circulating a video depicting the majority community being terrified by Muslims. How seriously the Hardik challenge was being taken by the BJP even before the tie-up with the Congress is indicated by the circulation of a compromising video involving Hardik. 

Three probabilities

Imponderable as the outcome is just now, let us still look at three scenarios to gauge what lies ahead of the country as a whole.

1. First, if Gujarat returns a marginally favourable verdict for the BJP and Himachal an unambiguous one. What will be the impact of this on economic policy? Arun Jaitley has already indicated that the attempt to strictly abide by fiscal stability norms, resulting in a tight-fisted approach to spending, can be eased a bit. 

This is not surprising in the run-up to the General Election (in 2019). So, expect a regime of pre-election freebies resulting in fiscal easing. Expect a change in policy only after the elections, unless inflation numbers start ringing alarm bells. Even then, the reaction will not be to tighten spending norms but to reduce import duties to ease the supply of essentials and pressure on prices. 

An imponderable is the import price of oil. If this goes up, then import duties will be reduced so as not to court unpopularity by raising domestic prices. But there is a limit to this. What can truly make the government sit up and think is a worsening of the balance of payments situation in tandem with the deterioration in the fiscal situation. 

Now let us examine the political stance Modi is likely to take in the year and a little more ahead. Emboldened by the two victories, there is a likelihood that the tried and tested formula which worked in UP and Gujarat will be put into play again. This will lead to a business-as-usual Hindutva stance that will put the secular character of the republic and its governance, already under pressure, to further stress. This is not the India that its founding fathers, including Vallabhbhai Patel, envisioned, but neither is present-day Turkey in the image that its founder Kemal Ataturk had before him. 

2.Now let us look at the second scenario which is still — despite the Congress-Hardik alliance — a less likely one. According to it, the Congress, under the leadership of Rahul Gandhi, finds its mojo and, aided by the pact with Hardik's group, prevents the BJP from getting a clear favourable verdict in Gujarat. This will result in the Hindu consolidation line being followed with greater vengeance while economic policies remain the same as in the first scenario. 

3.This leaves us with a third scenario — the BJP secures a clear indisputable verdict in both Himachal and Gujarat. Such an outcome will reaffirm the personal charismatic appeal of Modi, proving that most of the electorate 

will go along with his leadership, irrespective of the temporary hardships (demonetisation and introduction of GST) that he may ask them to bear. This can make him feel secure and confident in taking up a more fundamental reform agenda by looking at hitherto neglected areas. He may devote some attention to setting India's agricultural house in order. He may seek to raise the ease of doing business for micro, small and medium businesses where jobs are created. He may also - you never know - ease up on the Hindutva agenda, rein in cow vigilantes in particular and minority-bashing in general. 

Of the three scenarios, the first is most likely, the second is less so and the third is the least probable.

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