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The outcome of the Gujarat assembly elections that will be known on December 23 will cast a long shadow not only on the Indian polity but indirectly, on the country's economy as well. A week is a long time in politics. Since readers of this column may already know whether Narendra Modi has returned to power by a comfortable or thin majority or whether he has lost his hold on one of the India's most industrialized states, it is best to confine speculation to the realm of distinct possibility.
If Modi wins by a narrow margin or if the Congress (with the help of BJP rebels) defeats him, then, in the coming months, a substantial section within the Congress would be emboldened to argue that the party would perform well if the next general elections take place early, say, in April-May 2008, a year or so ahead of the end of the full five year term of the Manmohan Singh government.
The logic of this section in the Congress would be as follows: there are strong anti-incumbency sentiments against the BJP and the NDA in Rajasthan, Madhya Pradesh and Chhattisgarh (besides Gujarat) that would benefit the party and outweigh the likely losses that the Congress and the UPA would incur in Andhra Pradesh, Tamil Nadu, Maharashtra, Delhi, Haryana, Uttar Pradesh, Bihar and Assam.
The Congress could also stand to gain in the Left-ruled states of Kerala and West Bengal. Thus, this section would press for the operationalizing of the nuclear agreement with the US on the ground that even if the Left (on the defensive after Nandigram) withdraws support to the UPA government, the Congress-led coalition could on the whole not end up a loser. Those within the UPA who would certainly oppose this line of reasoning would include Lalu Prasad and M. Karunanidhi whose respective parties are almost certainly not going to repeat their performances in the 2004 Lok Sabha elections.
The BJP and the NDA, of course, hopes to improve its performance in Karnataka, Bihar, Jharkhand
and Maharashtra and not lose too many seats in the states where it is currently in power alone or with its alliance partners.
Consider now the possibility of Modi returning to power in Gujarat for the third time with a reasonably comfortable majority - though obviously not winning 127 out of the 182 seats in the state assembly as the BJP did in December 2002. If this happens, the Congress, the rest of the UPA as well as the Left could become wary of precipitating early elections that would primarily benefit three parties, the Bahujan Samaj Party, the Telugu Desam Party and the AIADMK. The apprehension would be that a 1996-like situation may arise when the Congress would have to support a 'Third Front' type of formation from outside and not lead the ruling coalition. Hence, a preferred option would be to delay elections as possible, perhaps towards the end of 2008.
In any scenario, one denouement is certainly preditable. While presenting the next Union budget, Finance Minister P. Chidambaram would announce a slew of proposals that would seek to woo the proverbial aam admi. Expect more social security benefits for unorganised workers and higher outlays on health-care, education and rural development.
This article was originally published on January 18, 2008.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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