Here is my analysis of what went wrong with the BJP election strategy and what we can expect in the next term.
Three basic issues that concern the voter are security, justice, and the integrity and competence of the candidate.
The BJP's traditional strong suit compared to the opposition was security -- both military, and at the personal level through economic prosperity.
Having entered into peace parleys with Pakistan just before the election, the BJP decided not to make defense a wedge issue. This was a big mistake.
By overdoing the India Shining campaign, it had lost the economic security card, since the implication was that India was already a prosperous nation.
It crafted its campaign around the popularity of Vajpayee. But this could not be the decisive issue since the voter had to balance it against the electability of the local candidate.
The voters now had nowhere to turn but to the justice issue at the social and the economic level. This is the strong point of the Congress and Left parties.
In the past, the BJP had used the Ram Janamabhoomi issue to appeal to the sentiments of Hindus regarding historical justice. Given that it was the ruling party, this issue could not be raised again.
But there were other less divisive issues, such as freeing temples from government control that it could have championed, but did not.
The Hindu Right constituency felt so ignored and taken for granted that many in it preferred not to vote.
The question of social justice is the unstated subtext behind caste equations, which is why it has been traditionally exploited by Left-leaning parties.
The BJP could have countered it with education initiatives to benefit poorer communities, but this did not happen. On the other hand, the unending controversy over the control of the IIMs alienated many of its supporters in the urban areas.
The Indian political system is a giant yo-yo, a consequence of lack of checks and balances. In the American system, each state is required to balance the budget every year, which checks rash fiscal policies. In India, there are no similar constraints on the states.
Election manifestos make unwise promises; the winning government overreaches itself, and, consequently, gets voted out at the next election. This is the basis of the cycle of misgovernance and political instability. The anti-incumbency phenomenon will continue in India until systemic changes are made to compel the states to greater fiscal discipline.
We saw this a few years ago, when Parkash Singh Badal's Akali Dal government decided to give free electricity to farmers. This mainly benefited the already rich farmers and it caused resentment amongst others who were not receiving similar largesse. This became a big factor in the Akali defeat a couple of years ago.
History repeats, each time with an amusing twist. The incoming Congress government of Y S Rajasekhar Reddy in Andhra Pradesh has begun its tenure with free electricity to farmers!
Peace talks with Pakistan were great to boost Vajpayee's popularity, but when it came to actual voting, this was bound to be superseded by local and personal issues.
The BJP defeat was like that of Winston Churchill in the elections that followed the British victory in the Second World War. By winning the war, Churchill had done his job, and the voter had no reason to re-elect him.
Not only is the incoming government Marxist-supported, there is a very strong culture of centralised control in the Congress itself. These factors are bound to slow the pace of economic reforms, if not the reversal of some that have already occurred. With this as background, one can see why it would be harder to attract foreign capital.
India became so utterly impoverished during the 150 years of British rule, that even after 57 years of Independence, it simply does not have the resources to upgrade its infrastructure, no matter how good the administration. Since capital doesn't flow in without infrastructure, this cycle can be broken only using foreign capital.
India cannot afford to isolate itself from the global economy, as many Marxist leaders recommend.
The Chinese and Indian economies are the second and the fourth largest in the world. Some believe these two would become serious rivals to the United States as engines of world economic growth. But consider that last year India received about $4 billion as foreign investment capital whereas China got almost twenty times more. Thus, India has a long way to go before catching up with China.
Since the Marxist rhetoric and policy against globalisation will make foreign capital less likely to come into the country, India will be set further behind in the global economic race.
The Marxist-supported Congress government will also tend to go back to its old ways of increased centralisation. Any privatisation will be done on a case-by-case basis, as has been attempted without success in West Bengal. Such case-by-case approach implies there will be no transparency of process. No matter how honest or efficient the bureaucrats or politicians are, a system of over-centralised controls is bound to fail, because of information overload. The decision maker simply does not have the cognitive resources to deal with the raw information in a rational manner.
India's economic growth in the short-term is already facing the challenges of higher oil prices. These further gratuitous burdens do not bode well.
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