We will have a hung Parliament in all probability: Swaminathan Aiyar
BJP will lose a very substantial number of seats, especially in the north, says Aiyar.
When we spoke with you before polling began, you gave the NDA a very clear edge. Now that only the last phase of polling is left over the weekend, does your opinion remain the same or has anything changed?
I would say that the NDA had the best chance of forming the government. I believe it will lose a certain number of seats. On balance, it will lose a very substantial number of seats, especially in the north, some in the west. It will partly make it up in the east and in the South. On balance, I imagine NDA will fall short of a majority. We will have a hung parliament in all probability. Then the question is how badly is it hung, I think if the NDA gets 250 seats or more, it will certainly be able to get enough new allies to be able to form the next government. If the NDA tally falls to 230, it would be difficult.
In that case, most likely we will get a third front government. I do not think we will get a Congress-led government. I do not think the polity is going in that direction as in the case of Karnataka as we saw. Rahul Gandhi is open to unconditional support to a non-BJP government. There will be a similar kind of move if the opportunity arises in New Delhi. But in India, a 1% swing in the vote can translate into 50 seats up or down. So for all we know, we may get to a situation where the NDA is voted back to power on its own; it is also possible that it has beaten so badly, that all kinds of new possibility arises.
Your travelled to the Hindi heartland -- which some would believe could be the swing factor. What has the United opposition made things difficult for NDA? Some brokerages are predicting that the NDA tally could reduce to literally half to 30-35 from that 74 that we saw in 2014. Could there be such a sharp fall and where can this be made up then?
Anti-incumbency is a fact of life and the fact of the mahagathbandhan is a part of arithmetic which is also a part of political reality. If you go back five years ago, in 2014, the NDA had roughly 43% of the popular vote. If you take the mahagathbandhan parties, they also had roughly 43% of the vote. If you now make allowance for a certain amount of anti-incumbency, you will find that in all the state elections, there was anti-incumbency. Wherever the BJP has been the incumbent, it has lost ground as we saw on the central Indian elections. Wherever the BJP has been anti-incumbent as in UP or some other places, it has done well.
I would imagine the same pattern to continue because there is a mood in India which is somewhat sour. It is not that the economy has collapsed but things have just not gone well enough. There is no vim and vigour; there is no enthusiasm and so that anti-incumbency is going to tell, on this particular UP elections. If that happens, you then go back to the arithmetic on top of caste. I am afraid you will find that the mahagathbandhan has a clear advantage.
On the one hand, the upper caste vote may get split between the BJP and Congress. The Congress staying aside, may be eroding part of the BJP advantage and it is a highly polarised vote. People are more likely to vote according to their caste in this particular election. There are people who very strongly worked on that in the previous election and if you go by that, then the caste represented by the mahagathbandhan parties numerically is more than 50% of the population.
So I would say on both these count,s, the BJP is in for a very severe setback in Uttar Pradesh, even though Mr Modi is personally popular, even though lots of people are willing to give him a second chance. I still think on balance, there would be a slippage of 3%-4% away from the NDA to the mahagathbandhan and that could sink the BJP pretty badly.
Is Priyanka Gandhi really a factor?
Priyanka Gandhi is a big factor for the Congress Party internally. She is a big factor for the morale of the Congress Party. For those guys who are very disheartened now, there is some more vim and vigour. Everything else, I am afraid is against them. It has been the experience that when the Congress Party is beaten, if it is beaten badly, but still number two, then it bounces back. The moment it becomes number three, it finds it very difficult to bounce back.
In Uttar Pradesh, it is number four. So frankly it does not matter, people do not talk about it. When you go in village after village talking to people, people are talking about the gathbandhan versus the BJP, nobody mentions Congress.
I asked about NYAY. There is this big promise by Rahul Gandhi that I will give you Rs 6,000 a month whereas Mr Modi is only offering Rs 6,000 in a whole year, 12:1 and yet nobody is discussing NYAY. It is as they say that a bird in hand is better than two in the bush. In Uttar Pradesh, it is like saying one bird in hand is equal to 12 in the bush which the Congress is offering. You will find that Priyanka herself is a better speaker than Rahul and Sonia but that frankly does not amount to very much.
In the audiences that we saw, she does not have a natural chemistry with the audience. You see Mamta Banerjee going up and down and the crowd would be roaring back; you see Narendra Modi working up and down here, the audience is roaring back. I saw Priyanka trying to do that, very tepid response. I am afraid Priyanka Gandhi is not going to make very much of a difference.
In fact, we met her and she herself said my focus is not on this election, my focus is on building up the Congress Party. So we immediately said, you mean by 2022 for the next election? No-no, she says for the next 10 years. So she is definitely not going to be claiming any miracles in this election or even the next state election, She is talking about some long term change.
Now the mahagathbandhan has initiated some activities such as the meeting that is scheduled for the 21st of May. KCR meeting Stalin, Chandrababu Naidu making Mamta and Rahul Gandhi. Could there be a possibility of the numbers working out or are there chances of deflections from the opposition to complete that NDA shortfall?
There is a strong likelihood of a hung parliament. If you remember, going back to 1996, Mr Vajpayee had as many as 254 seats and still could not form a government. He did not need that many more, he just needed around 18-20 and he could not even get that because the other sides were against him.
So obviously, NDA itself is going to be very active right now putting out feelers to all the parties and there are some people who say the NDA will even say look we just want the prime minister, defence, finance, home and the rest you guys can get out there and make lots of money. To that extent therefore, the NDA would be strongly positioned even if it only got 230 or 240 and maybe it can get others together.
On the other hand, the third front people are very clear. They say do not look at this just as a parliamentary election. We are all facing a rising BJP at the state level. It is in our interest to do everything possible to prevent the BJP from coming to power at the centre because that has repercussions at the state level.
They are going to make all out efforts again to get together in some way. Rahul Gandhi’s strategy I think definitely is as in Karnataka. Even if he has more seats, he will just say I give unconditional support to an anti BJP front. That is the kind of picture I see emerging, let us see what happens.
The new government’s job from a market perspective will be quite challenging. Consumption is currently witnessing a massive slowdown unlike any scene in the past. Credit growth has been sluggish. The financial sector is bracing up for an imminent crisis. What should be the agenda for the new government when it comes to purely economics?
There are a series of well known reforms that needed to be done. It is well known that we have problems in land, labour and capital. No government for the last 25 years has seriously tried to do something on the labour market. Everybody says in China and Vietnam, there are factories of 10,000, 20,000 people. Even in Bangladesh there are factories of 10,000, 20,000. Here in India if somebody has 1,000, he is desperately trying to reduce the number of workers to 500. Is there any attempt to change the labour laws? There is nothing serious.
Our land acquisition act has made things much more difficult and much more expensive. In China, if the government wants to acquire land, you just go boom, boom, boom; you just rush it through. In India, there have been huge delays. It has affected infrastructure as a part of the project cost. Land has now become much more expensive than it used to. Finally, real interest rates remain extremely high in the economy.
Consumer price inflation at less than 3% and a repo rate is more than double that. If you have a country that has high interest rates, high land prices and high labour cost, all these are pulling down the economy. Is the new government going to tackle this? I have a feeling that with the kind of wide coalition that we are going to get, there will be no radical reforms, there will be small incremental attempts here and there.
So I do not expect any great change. There is a slowdown that you are seeing in India which is part of a global slowdown. The whole world economy is slowing and India with it. That is not going to get reversed by any radical reforms in India. We will chug along and it is not bad because even if we come down to only 6.5% growth in the current financial year and even at 6.5%, I think India may end up as being the fastest growing major economy in the world. So yes, we are not going to be doing as well as in the past but in a slowing world economy perhaps we will not do too badly.