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HindustanTimes Thu,27 Nov 2014
Economy as an issue takes front seat this election
Vir Sanghvi, Hindustan Times
March 31, 2014
First Published: 21:57 IST(31/3/2014)
Last Updated: 09:02 IST(1/4/2014)

Everybody knows that Indian elections throw up surprises. But the interesting thing about this election is that the surprises have begun even before the first vote has been cast. There is, first of all, the surprise over the identity of the principal antagonists. Pundits had predicted a gladiatorial contest between Rahul Gandhi and Narendra Modi. Instead it is Arvind Kejriwal--who few people took very seriously even a year ago--who has emerged as Modi's most vocal opponent. In contrast, Rahul Gandhi’s attacks on Modi have been far more muted.

Then, there is the surprise over the election's big issue. The conventional wisdom was that if Modi became the BJP's prime ministerial candidate, this would communalise the campaign. The Congress would make frequent references to the Gujarat riots while the BJP would play the Hindutva card. In fact, communal issues have not come to the forefront in this campaign (despite the symbolism of Modi's choice of Varanasi as his constituency) and the 1984 Sikh massacre seems to be recalled more often than the Gujarat riots.

Even when Kejriwal attacks Modi, it is not for his role in the riots but for his alleged patronage of crony capitalists. Similarly Rahul Gandhi may launch a general attack on the divisive nature of the Hindutva ideology but the Congress has abandoned its old anti-Modi rhetoric: Nobody calls him a 'maut ka saudagar' these days. Rather than try and fix responsibility for the 2002 riots, the Congress would rather rake up Mahatma Gandhi's assassination. And Modi, in turn, hardly refers to Hindutva in his campaign, preferring a secular, governance platform.

But the biggest surprise of all has been the emergence of the economy as this campaign's principal issue. In a sense, what the Congress, the BJP and AAP are really arguing about is the legacy of economic liberalisation.

When Modi talks about governance and draws parallels with China, his principal accusation is that UPA 2  frittered away the gains of liberalisation with indecisive, weak and often corrupt, governance. When he draws attention to the so-called Gujarat model of development, what he’s really saying is this: He implemented liberalisation and delivered on growth while the Centre and Congress-ruled states could not.

Kejriwal's attack is also predicated on the post-liberalisation legacy. According to Kejriwal, economic liberalisation has led to a situation in which governments favour large corporate houses and enrich them at the expense of the poor. The attacks on gas pricing, the emphasis on governmental corruption and the many references to Modi’s alleged corporate backers (and in particular Reliance and the Adani group) are really attempts to argue that the benefits of economic liberalisation have been hijacked by the few at the cost of the many.

Ironically, even the basis of the Congress campaign is an anti-liberalisation agenda. When the party talks about a rights-based approach, the central message is that it rejects a model where the market decides the allocation of resources. In the Congress' view, the market has failed to direct resources to the poor and so they must be compensated through direct transfers of wealth: Loan write-offs, employment guarantee schemes, subsidies, free food and the like.

The best way to distinguish among the three parties today is to look at their economic platforms. We are now in an unprecedented situation where all three campaigns are defined by their attitudes to liberalisation. Modi is the liberaliser; his claim is that he is not just a reformer but that he is also efficient and decisive. Kejriwal is the man who guards the poor against the ravages of liberalisation, which he seems to regard as a confidence trick perpetrated by politicians and industrialists on India’s poor. In his view, everything that has been privatised (electricity distribution, telephony, etc.) is now run only for the benefit of rich robber barons.

And the Congress, which was once the party of liberalisation, seems eager to disown that legacy and to appeal to the electorate in terms that would not have been out-of-place two decades ago: Welfare schemes, subsidies, write-offs, and hand-outs.

In the circumstances, it is not surprising that the educated middle class, which is the most supportive of economic liberalisation, is backing Modi. So are foreign financial institutions and the global investment community. That is why the rupee has strengthened and the Sensex has soared on the expectation of a Modi victory and the return of economic liberalisation.

So, this election marks a watershed in terms of campaign issues. Political scientists have always claimed that the economy is rarely an issue in Indian elections. When economic factors do play a part it is almost always inflation that swings votes: The price of onions, for instance. Nobody worries too much about the rate of growth. It is such factors as caste, religion, ethnicity, personal charisma and emotion that dominate.

This election is different. Yes, identity politics will play some role. But the basic issue--the one that really divides the parties--is the economy and how it should be run. And no matter which side you are on, we should all be glad that finally, Indian elections are being fought over issues of substance. And not on the basis of the tired old distinctions: Hindu vs Muslim; upper caste vs backward caste; and so on. It's good to see a campaign where people argue about the merits of a particular model of development and compare rates of growth over the years rather than one where everything is about identity and sentiment.

(The views expressed by the author are personal)


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