Terms of Trade: Three key takeaways from today’s results in Maharashtra and Jharkhand
Welfare, freebies, doles, whatever one may choose to call it, is becoming an indispensable part of electoral strategy in most parts of India
NEW DELHI: There is more than one way to look at the assembly election results for Maharashtra and Jharkhand. And there is merit in looking at each of them in some detail. Here are three questions which can help us understand the results.
The incumbent party/alliance is coming back to power with a bigger majority in both Maharashtra and Jharkhand. What explains this? The question is an interesting one because the results in both these states are in stark contrast to what happened in the Lok Sabha elections less than six months ago. What really happened in this short period? The other important question is that of identity-based ideological affinity to parties and its role in shaping the verdict.
Let us look at them one by one.
What is one thing both the Jharkhand Mukti Morcha (JMM) led government in Jharkhand and the Mahayuti government in Maharashtra did before the elections? They announced cash transfer schemes for women; Ladki Bahin in Maharashtra and Maiya Samman Yojana in Jharkhand. Hemant Soren and Eknath Shinde were not the first chief ministers to do this. Mamata Banerjee in West Bengal and Shivraj Singh Chouhan in Madhya Pradesh have won landslide victories in their states with tailwinds from similar schemes. Even the BJP government in Haryana promised a cash transfer scheme to women. It was important enough to find a mention in the speech Narendra Modi made from the BJP headquarters on the night of the Haryana results.
The key takeaway is simple. Welfare, freebies, doles, whatever one may choose to call it, is becoming an indispensable part of electoral strategy in most parts of India. It does not matter whether it is a poor state or a rich one – Jharkhand and Maharashtra are extreme examples of each of these – the underclass expects tangible, even if seemingly insignificant to the well-off, amount of money in return for votes. Fiscal hawks may scoff at this trend, but it is the democratic response to what has otherwise been an extremely unequal trajectory of economic growth in the country, as argued in a previous edition of this column. This trend is not going anywhere. Both the government and markets should take note.
What was one thing that Narendra Modi did right when the BJP had its back against the wall after losing to the Congress in the 2018 assembly elections? National security hawks may say the Balakot air strikes in the aftermath of the terror attack in Pulwama changed the narrative. This author would like to argue that it was the retrospective cash transfer scheme for farmers or PM-KISAN which was a bigger factor. Rural distress, thanks to a worsening of terms of trade for agriculture, had played a big role in generating headwinds for the BJP in not just Rajasthan, Madhya Pradesh and Chhattisgarh in 2018 but also Gujarat in 2017. Modi realised that this anger had to be pacified and this is exactly why he announced a retrospective -- send money now verify eligibility later -- scheme before the 2019 general elections. The rest, as they say, is history. The Congress collapsed even in states where it had formed governments less than six months previously.
Fast forward to the 2024 interim budget and this is exactly what Modi did wrong. There was absolutely nothing for the underclass in the 2024 interim budget which was not just hawkish on fiscal consolidation but actually cut back on revenue expenditure (if interest payments were to be excluded) even in nominal terms. Revenue expenditure is what matters if you want to swing an election a few months away.
If the 2024 interim budget had been more like the 2019 one, would the BJP have done better? In hindsight, there is more evidence to suggest that it would have. The 2024 Lok Sabha verdict was more against the BJP’s fiscal stance – not its ideological stance. This is exactly what this column argued after the Lok Sabha results.
“They (voters) believe that they and their peers who do not even have basic economic security despite never-ending drudgery in the name of work deserve better. They know that the government cannot solve all their economic problems. But they expect it to pitch in when things get difficult. And they are upset when it pulls the ground from beneath their feet and talks down to them after doing it. Perhaps, this is where Narendra Modi, the master politician, got it wrong this time when he agreed with the fiscal hawks within his economic policy establishment and did not announce any economic palliatives in the 2024 interim budget”, it had said.
Last but not the least is the question of identity. Does it really work in elections? Ask different people and you will get a different answer.
Hemant Soren is now the most successful Scheduled Tribe (ST) leader in not just Jharkhand but almost all of India outside the north-east. Not only has he swept the ST reserved ACs in the state but built a coalition which has demolished the historical fault line between ST and non-ST voters in the state.
Assam chief minister Himanta Biswa Sarma and almost the entire leadership of the BJP tried very hard to convert the ST versus non-ST binary – the BJP made a non-ST the chief minister in 2014 and did not name a CM candidate in these elections – into a Hindu-Muslim one in Jharkhand. They failed miserably.
The two Shiv Senas are an even bigger example. Uddhav Thackeray’s faction tried to do an ideological somersault by joining hands with the Congress. He first lost most of his legislative party to Eknath Shinde and then almost his entire popular support.
What is the key takeaway from these examples?
Identity can help your politics but promiscuity blunts its edge. And identity-based projects are not built in a day. JMM has been a party of STs from the day it was born. The Shiv Sena embraced Hindutva along with nativism decades ago. The only contradiction in this alliance was whether it was willing to become a junior partner of the BJP. Uddhav Thackeray did not want to do it. Today’s results – the BJP’s MLA count is double that of the Shiv Sena which was its partner – should settle that question.
Also, amorphous, friction-ridden identities do not work. This is exactly why things such as caste census or Maratha reservation politics have had very little traction in these elections.
Is there a larger lesson to be drawn here? Acing electoral politics in India requires economic pragmatism and ideological consistency. You cannot force voters to accept an economics which suits the elite and an ideology which is oblivious to entrenched social contradictions in the electoral realm. The former is mostly uniform in India and the latter, extremely diverse. This is what makes Indian democracy fascinating.
Roshan Kishore, HT's Data and Political Economy Editor, writes a weekly column on the state of the country's economy and its political fall out, and vice-versa
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