By Harihar Swarup
Now that the dust has settled, it is time to take cool look at why so many analysts keep getting elections predictions wrong. The key reason in my view is that they remain stuck in the past and continue to rely on the politics of caste, community and religion and region to reach their conclusions. But these factors lost their predictive power long back.
In the days when per capita incomes grew two per cent or less annually with no perceptive improvement in the lives of the people taking place, the centuries old Indian fatalism ruled, leading them to vote with their caste. But as Jagdish Bhagwati wrote in an 2004 article, reforms demonstrated to the electorate that better governance and faster growth could bring about rapid change in their economic fortunes. That demonstration led to a “revolution of rising aspirations” among voters. Henceforth, they would reward governments that delivered superior governance and growth outcomes with re-election while bundling out those that didn’t.
Later, my work with economist Poonam Gupta found considerable empirical support for this hypothesis. As example, voters returned UPA back to office in 2009 but gave it a boot in 2014. They handed over victory to BJP that year and went on to return it to office in 2019. At the state-level, an aspirational India returned performing governments multiple times in states such as Orissa, Bihar and Gujarat while trouncing out non-performing once after one term in Rajasthan, Punjab, Tamil Nadu and in Uttar Pradesh in 2017 asse3mbly elections.
This is the context in which the recent victory of Chief Minister Yogi Adityanath must be seen. Those who remained prisoners told the old view and thought that the outcome would depend on the M.Y (Muslim-Yadav) equation and the Dalit vote had to bite dust. The return of Adityanath — a first time full-term CM — symbolizes neither the success of Hindutva politics nor the failure of the M.Y equation. Instead, its equation origins are to be found in the restoration of law and order, successful efforts to hold down infection levels during various Covid waves, swift progress in vaccination, and efficient and effective delivery of benefits under various government schemes.
But if Adityanath is to return yet again in 2027, he will be judged not what he accomplished in the past five years but what he delivers in the next five years. And with Covid hopefully out of the way, this would mean increased prosperity. This is especially likely to matter in UP which remains India second poorest state in terms of per capita net state domestic (NSDP) product. In 2019-20, its annual per capita NSDP at Rs. 65,700 was less than half of the national average of Rs. 1,35,625.
The gross state domestic product (GSDP) in UP grew at the annual rate of only 4.9% during three years spanning 2017-18. To bridge the gap between standards in UP and the national average, this rate will have to accelerate significantly. From $238 billion by 2019, GSDO this would require an annual average growth rate of eight per cent in dollars.
To achieve this growth while also delivering higher living standards to the masses, UP must leverage its hugely underutilized resources of 90 million plus workers. It must create flexible labour and land markets and a business friendly environment in the states. The experience environment of Gujarat during the tenure of Narendra Modi as CM, which has been systematically documented in a book co-edited by the author some years ago, offers a useful lessons for what UP might do.
An important instrument Modi employed to facilitate industrialization was the special zones in which he created more flexible labour markets than anywhere else in India. As early as 2004, he freed in Gujarat the enterprises of all sizes, hiring of all sizes in these, hiring and firing restrictions imposed in Industrial disputes Act 1947. The zones also solved problems of land, infra-stature and 24/7 electricity that many enterprise face elsewhere. According one study Gujarat SEZs accounted for 47% of India-wide SEZ exports during 2006-16. Considering that SEZs accounted for one-fourth of the total Indian merchandise exports during 2009-16 this was no mean achievement. (IPA Service)