THE CHALLENGE OF GOVERNANCE

The clever one-liner on social media, Congress Ko

Hara Diya, BJP Ko Dara Diya is not without substance. What it means is that both national parties will have to do a lot more to regain voter trust. The BJP after the twin wins in Gujarat and Himachal on Monday, might now rule in 19 States along with its allies, but the people are beginning to complain about the economic stress. Joblessness is a huge problem for the young population. Of course, no government anywhere in the world can have on its own rolls all the people wanting jobs but to create a conducive climate for growth is the foremost task of the Government. Whether it was due to demonetisation or disruption caused by GST, there can be no denying their negative impact on growth. The economy is slowly recovering from the fall-out of the twin disruptions, but, in the meanwhile, some other red flags have emerged in sight, threatening to cast a shadow on growth. The global crude oil prices have slowly inched up in recent months, from the $40-45 a barrel to $60-65 a barrel. This could deny the huge cushion of unearned revenues that the Modi Government has had the good fortune of deploying in funding development because the sharp reduction in the crude price was only partially passed to the retail consumers. Another cause for worry is the pressure on the fiscal deficit, with 90 percent of the budgeted, 3.2 percent has already been exhausted by end-October. Soon, Finance Minister Arun Jaitley will have to seek permission to revise upwards the fiscal target, thus sending a negative signal to the markets and the global ratings agencies. These signs of pressure on the economic situation are important for the ruling party insofar as these circumscribe the Modi Government’s capacity to deliver on jobs and other such reliefs for the people. The lack of fresh investment in industry and business in the last three years has further worsened the situation with major corporate houses grappling with huge bad debts. Real estate sector, which acts as a catalyst for growth and employment, is deep in debt and saddled with large inventories. Employment in the informal sector is yet to recover fully from the blow it received from demonetisation and GST. The point is that unless the Modi Government is able to sort out the economic mess, much of it not of its own making, no doubt, it will be hard to rev up the economic engine sufficiently enough for it to be able to deliver votes in the 2019 election. Admittedly, economic factors very often are superseded in the voters’ minds by emotional factors, such as the construction of a Ram Mandir, or the surgical strikes. However, it will be risky for the Government to rely only on the latter to the exclusion of the better economic conditions for winning the next Lok Sabha poll.

As the Gujarat outcome revealed, the agrarian crisis in large parts of the State, thanks to lower price-yields on a bumper cotton crop, was the reason for the rural voters’ anger against the BJP. Even in urban areas, the economic slowdown and lack of job opportunities was a factor, but the BJP managed to overcome those negatives by superior organisational strength and Modi’s personal charisma. The Congress Party, on its part, would like to draw satisfaction that it caused the BJP a fright, increasing its own tally while reducing the BJP’s by 16 seats. The contribution of the three caste leaders in boosting the Congress vote might be considerable but what should worry the BJP is the fact that the electorally dominant castes in the State were aggrieved at the lack of economic opportunities. How the agitations for reservations for Patels in Gujarat, Jats in Haryana and UP, and Marathas in Maharashtra are handled is a challenge for the ruling party. As the next poll nears, these demands are bound to get shriller still, likely to be instigated further by the opposition groups with an eye on their votes. It is a truism in democracies that voters vote out governments rather than vote them in. The Congress was voted out following popular disgust at its corruption and non-performance in 2014. Modi will have to think hard about the wining plank for the next election following the nearfright from Gujarat. He may be the tallest, or maybe the only, national leader around but even he cannot surmount anti-incumbency, especially if it is based on a popular feeling of non-delivery.