A momentous year ahead

The BJP has just retained Gujarat and wrested Himachal Pradesh from Congress. Celebrations rent the air, but they soon came under a cloud of opposition jeering over the tough fight it waged in Gujarat, roping none other than Prime Minister Narendra Modi who addressed nearly 40 rallies and even played the card of Gujarati. Nevertheless, the results were sapping, to put it bluntly.

But, ‘Jo Jeetha Wohi Sikandar,’ exclaimed the leaders and supporters of the Saffron party. Though the BJP creditably won the Gujarat election for the sixth time in a close combat with the Congress, the results are reportedly not to the liking of its top brass. For, Gujarat is the home state of the PM and the party chief even targeted 150 of the total 182 seats.

It ended up with barely 100 seats, with Congress closely behind it. Putting up a brave front and casting aside opposition talk of a jolt to BJP as well as resurgence of Congress, senior BJP leaders contend that a little dent in its vote bank due to several factors after over two decades of rule in Gujarat is but natural.

An impartial analysis, though, indicates that the BJP has managed to scrape through, thanks to the sweeping support it has got among the urban voters, notwithstanding the negative impact of radical economic reforms such as note ban and Goods and Services Tax (GST).

The Gujarat elections have now framed big questions for the saffron party which has to face a few more elections before the 2019 General Elections. Loss of ground in the rural sector, particularly among the farmers, has come as a wakeup call. With Rahul Gandhi now in the driver’s seat, the BJP feels that there is every possibility that the Modi v/s Rahul battle would sharpen. It cannot be ruled out that the Congress party may go in for aggressive caste mobilisation wherever possible.

Against this backdrop, the NDA, its allies and friendly parties are likely to increase funding for farm and rural sectors with programmes which would aim at generation of jobs and employment and adequate infrastructure. The government could be doing a delicate balancing act, taking into account its resolve to observe fiscal prudence. If the grapevine is to be believed, the NDA government led by BJP may go in for general elections in the second-half of 2018.

Having fallen short of its set target in Gujarat, the Narendra Modi government now has no other option but to either drop the reformist agenda or go slow and opt for populist measures. Not just the BJP government, even the state governments which are part of NDA and some like Government of Telangana which extend issue-based outside support to the Centre, are also likely to root for populist budgets. All these governments which have been talking of reforms during the past three years suddenly seem to believe streak of disruptive reforms could be harmful for their return to power.

The Centre and the state governments are likely to indulge in a lot of social spending—the measures that are believed to be vote-garnering. The Finance Ministers of the two Telugu speaking states, Andhra Pradesh and Telangana, have asked the officials to closely monitor the budget proposals being prepared by the Centre and work out strategies based on the likely allocations to the respective states.

Analysts aver that whether it be the Centre or the state governments, they would try to cement the success of economic reforms taken up in the last three-and-half-a-years and focus more on infrastructure projects which are in progress. They will also focus on administrative initiatives, but bypass new legislative reforms on the macroeconomic front.

As far as the two Telugu states are concerned, Polavaram and Mission Bhagiratha are going to be the two major trump cards. At one point of time, the BJP tried to convert the Polavaram issue to its advantage and tried to arm-twist the AP government.

But after the jolt it had received from the state government when the Chief Minister N Chandrababu Naidu stated on the floor of the Assembly that the Centre was not extending the kind of help it should have for the prestigious national project and that he would hand over the project to Centre and wash his hands off if it was ready to complete it by 2019, the BJP took a step backward and started chanting the slogan of ‘BJP, TDP bhai bhai.’ Both the governments apparently feel that deploying political capital would be more advantageous.

BJP leaders have already started talking about ‘Pragmatic National Budget.’ Statistics show that the annual farm growth had dipped to 1.7 per cent in the three months ending September, mainly on lower prices and output, while economic growth accelerated to 6.3 per cent after growing at a three-year low of 5.7 per cent in the previous quarter.

Top leaders of the saffron party say that the focus now would be to intensify farmer welfare schemes and ensure MSP. According to economists, Modi has indicated that he would like to achieve 7.5 per cent to 8 per cent annual economic growth before entering the election campaign which apparently means that the last full budget to be presented by Arun Jaitley before the elections would essentially be a populist budget. There is every possibility that allocations for farm and rural development ministries could be hiked by at least 20 per cent in the next fiscal year. However, the biggest challenge for the Modi government now is to create jobs for millions of youth.

What would that mean? Perhaps the Centre may offer higher procurement prices for different crops and may go in for tax reforms. It also has a major task to bridge the revenue shortfall following the GST and hence may go in for increase in the targets of receipts for this fiscal year.

On the political side, the BJP will now focus its attention on Karnataka. It is certainly a force to be reckoned with in Karnataka. But if it wants to ride on the impact of Gujarat and Himachal Assembly results, it would be in for great disappointment. In Karnataka, the local issues and the caste factors would play a prominent role. The BJP should remember that it suffered a drubbing in Karnataka bypolls which were held soon after the massive victory it had tasted in Uttar Pradesh Assembly elections.

The Congress party, however, seems to be depending more on the new avatar of Rahul Gandhi and feels that he has now emerged as a good campaigner. But then the lurking danger in Karnataka is that the Congress appears to be heavily depending on Rahul’s strategies rather than on its achievements. This could be advantageous to BJP if the Congress party indulges in self-goals as it did in Gujarat.

The BJP is projecting B S Yeddyurappa as its chief ministerial candidate to counter the growing popularity of Siddaramaiah. However, the BJP’s five-year rule in Karnataka from 2008-2013 saw three Chief Ministers and a number of scams—including the illegal mining case, resort politics and a host of other corruption charges. A lot now depends on the Lingayats who as of now are backing Yeddyurappa. Lingayats are the single largest community in the state and the BJP may even announce that it would give separate religious status for Lingayats. This demand has been there for over four decades.

To counter this move, the Congress may go in for more reservations for backward classes. It may be mentioned here that the Congress came to power with strong support from backward classes and minorities in the last elections. The Siddaramaiah v/s Yeduyurappa war has been on for long and both Siddiramaiah and Yeddi, as the latter is popularly known in political circles, took up simultaneously tour across the state.

For BJP, Karnataka has become a crucial as it wants to make inroads into Telangana and improve its position in Andhra Pradesh.