The Sensex went up on the 5th morning of December on the good news from the exit polls for the four state elections. That much was expected. Yet these are only exit polls. Even during the course of the polling day in Delhi, the exit polls changed their minds within each poll and across the polls.
The AAP supporters were the first out and surged ahead but the BJP was not behind. Indeed, the whole day, the BJP polling stayed above the other two parties. The Congress did not wake up till the afternoon and then harnessed its support. By the close of play, the Congress was running neck and neck with the AAP on vote share at around 30%, and with the BJP on 34% maintaining its lead throughout the day.
Vote shares do not readily translate into seat shares though that is what the exit polls show to attract attention. Here the verdict was clear in the two large states?Madhya Pradesh and Rajasthan?where the Congress shot itself in the foot by internal bickering. The policy of the dynasty is never to let any local leader get too tall lest s/he threaten the yuvraj.
Jyotiraditya Scindia could have delivered in Madhya Pradesh had he been declared the chief ministerial candidate. But the High Command would not allow.
In Rajasthan, Ashok Gehlot had to be checked lest he gets too big for his boots, and so CP Joshi was sent in.
Rahul Gandhi supervised the ticket choices. He repeated his performance in Uttar Pradesh and Bihar elections with 100% defeat for the Congress. Translate those two states into Lok Sabha seats and you have half the answer to the General Election.
Chhattisgarh may yet surprise us by the size of the margin between the two parties. Here there is a strange rumour of Naxals having suffered remorse for killing too many Congressmen. Hence they are supposed to have instructed locals to register and then vote. The message must have been obvious. Let us see how many seats the Congress wins in Bastar. But even so the BJP should hold Chhattisgarh.
Delhi has only seven Lok Sabha seats but its national significance will make it the headline. Here the Westminster system of first-past-the-post fails to predict where there are three cornered contests with all three parties rather close together in vote share. The exit polls jumped around in their seat predictions with the AAP and the Congress changing positions while the BJP stayed at the top. Only one poll gave the AAP the largest number of seats and only one gave the BJP more than half.
Thus, the BJP has two large states sown up. One small state nearly won and in Delhi they would be the largest single party. There may have to be President?s Rule in Delhi and another election along with the General Election. So, the Congress will not form government with itself as the largest single party. That is not news. We have known that since the last summer at least. All the bribery with MGNREGA and Food Security Bill and high procurement prices has not worked. But the BJP is not home yet. It has probably broken the barrier beyond the 183-mark that it previously stuck at. It has yet to reach its dream prediction of 230 seats on its own. That number of seats enabled Narasimha Rao to push reforms. The BJP could if it wanted to do the same if and when it gets 230 seats.
Two issues remain. Will it get 230? But, more importantly, will it reform the economy if it does get that many seats? I have graver doubts about the second question than the first one. The Sensex may be euphoric but its reaction is short-termist. Any government that the BJP may form in a coalition as the largest single party regardless of its numbers which comes to power in May 2014 will enjoy a bounce in optimism and a rise in GDP growth rate. So, the last two quarters of calendar 2014 will look good.
The question then is: will this growth be sustained? Here one has to express doubts. The BJP has not said anything about its economic programme. It did not oppose the Food Security Bill even claiming that the BJP states gave away more than was promised in the Bill. It has not said it will bring the deficit down nor announced its policy to bring inflation under control. Is the BJP just a crony capitalist party better than the Congress (though the set of cronies is the same across the two parties) or does it believe in having market-oriented economic policy? Is it the Congress without a dynasty or is it a Swatantra Party refurbished to win elections? Is the BJP willing to move even as far as China has promised to move in a market-friendly direction in its latest Plenum?
Those answers are yet to come.
(This column was written before the elections results were announced yesterday.)
The author is a prominent economist and Labour peer
