A DECEMBER ELECTION MAKES SENSE FOR MODI

After recent developments in Karnataka, are we in a better position to assess when the national elections might be? Does the Karnataka experience offer a few clear hints? Or has it made the question more difficult to answer?

Two outcomes of the Karnataka elections seem undeniable despite the fact the BJP failed to form the government, and the Congress-JD(S) combine did. First, Narendra Modi has shown that as a campaigner he’s not just indefatigable but incomparable. He’s also proven that his appeal stretches from the north and Northeast to the west, the centre of India and, now, down into the south. Only the east is yet to succumb.

The second is that with the exception of little Mizoram, the Congress came perilously close to fulfilling Modi’s jibe of PPP. Even though it will remain in power in Karnataka, Rahul Gandhi is no match for Modi. Few would disagree.

Now, against this background, is there a convincing case for Modi to bring forward the national elections to December ? I would say yes for three reasons.

First, if Congress is likely to win Rajasthan and, possibly, Madhya Pradesh, and national elections are not held till May 2019, the BJP would go into them debilitated by its losses in Rajasthan and MP. Surely this is something the PM would want to avoid? Holding the national elections alongside the December state elections is an effective way of doing so.

Second, and connected to the earlier argument, is the belief that Congress at the moment, despite the fact it remains in power in Karnataka, is a demoralised party. But after winning Rajasthan and MP it is bound to revive and, certainly, its workers will feel cheered up. Isn’t it, therefore, wiser to hold the national elections whilst the Congress is still feeling downbeat rather than when it feels strong and optimistic?

Third, Modi is a risk-taker and his energetic blitzkrieg-like campaigning in both Gujarat and Karnataka has shown that these gambles, which at the time many thought of as needless risks, can yield very credible results. Now, with his prime ministership at stake, will he be willing to risk an ear- ly election? So firm is his belief in himself that it’s hard to say no.

What then are the factors that might restrain Modi and suggest that an early election is an impetuous and bad decision? I can only think of two. First, when Atal Bihari Vajpayee called early elections in 2004, the result was a surprise defeat for the BJP. For the next 10 years, the party was stuck in Opposition. Does that decision still cast a shadow over the BJP? Could it make Modi once bitten twice shy? We just don’t know.

The second constraint emerges out of the belief that Karnataka has taught the Opposition the need to unite to defeat the BJP. But if Congress behaves differently in December, Rajasthan and MP could fracture this budding sentiment. In that event Modi would gain by holding elections in May.

Ultimately Modi is renowned for his bold decisions. That is unlikely to change. So might he concur with Brutus who said: “There is a tide in the affairs of men, which, taken at the flood, leads on to fortune; omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat, and we must take the current when it serves, or lose our ventures.”?

I suspect the temptation of a December election could prove irresistible. well in such survey-based reports but is still way behind some other countries in actually attracting large quantities of FDI reveals the huge gaps between the intentions to invest, which may be genuine and the frustration and pitfalls of actually investing in India. Thus, inward FDI and GDP peaked at a little over 3% in 2008-09 under the UPA but still well below that of other emerging economies such as Vietnam at 6%. Today India is at a little over 2% but is still well below the world average of more than 3%.

The most charitable interpretation of the reality against the rhetoric is that PM is doing a good job of talking up India as an investment destination but so far, this is not translating into a large increase in actual investments. But, as it turns out, India routinely places in the top three in previous editions of the UNCTAD report as preferred host destination for FDI, even as late as in 2013 when the economy was already in a downturn.

The open question is why FDI performed so well under a government, which according to the orthodox narrative was socialist in its mindset and did not pursue economic reforms whereas it has languished somewhat under a successor government widely touted as pro-business and reform minded.