INDIA’S NEW GOVERNMENT and PLAUSIBLE POLICY OUTCOMES
Originally published on MEDIUM.COM.
Exit polls from India’s month-long parliamentary elections suggest that Narendra Modi led Bharatiya Janata Party is set to form the Government again with the support of allies.
However, as I have argued here, the polls in India have been inaccurate to dismal.
The Parties And Their Governing Philosophies: Two National Parties, and Dozens of Smaller (mostly Regional) Parties
The ruling Bharatiya Janata Party (BJP) and the country’s main opposition party, the Indian National Congress (Congress), are the two principal national parties. There are also dozens of smaller (mostly regional) parties in the fray. In the six of the last seven elections, the Government has been a coalition of national and smaller parties.
In this election, neither BJP nor Congress is expected to secure a majority (a simple majority requires the support of 272 parliamentarians, there are a total of 543 parliamentarians) So, a coalition is inevitable. Accordingly, the composition of the next Government will depend not only the performance of the two national parties but also on the performance of the smaller (mostly regional) parties.
There are five regional parties — Akali Dal, Janata Dal (U), Lok Janashakti Party, Shiv Sena, AIADMK — who are electoral, ideological and natural allies of BJP. This coalition is called National Democratic Alliance (NDA.) NDA’s governing political philosophy is right-of-center: more business-friendly fiscal and monetary policies, and a more US-centric foreign policy including tougher posture with China and Pakistan.
Most of the other smaller (regional parties) — over 20 of them including Bahujan Samaj Party (BSP), DMK, Rashtriya Janata Dal (RJD, Rashtriya Lok Dal (RJD), Samajwadi Party (SP), Trinamool Congress (TMC) — are aligned against BJP. Their singular goal is to oust Modi. They are ready to work with the Congress party. This coalition is called United Progressive Alliance (UPA.) Ideologically, UPA is left-of-center: more distributive and inclusive fiscal and monetary policies, and a more Europe-centric foreign policy.
Two Different Policies Depending On The Electoral Outcome
The electoral outcome will determine the choice of two different policies.
· India’s foreign policy will continue to be substantially aligned with the United States and its interests, India’s economic and fiscal policies geared more towards encouraging Foreign Direct Investment and Capital formation, and its social policies designed to build a more robust Indian ethos.
· Or India’s foreign policy will become more responsive to European and Domestic interests, its economic and fiscal policies will be more focused on eradicating poverty and creating jobs directly, and its social policies will be more inclusive even at the cost of cohesion sometimes.
Plausible Electoral Outcomes and Consequences
There are two plausible outcome scenarios, depending on the performances of the parties. Each one of the outcomes represents a different political coalition. Accordingly, the policy prescriptions will be different for each one of the scenarios.
Scenario 1: Bharatiya Janata Party (BJP) led by Narendra Modi wins about 230–240 parliamentary seats and is able to form the Government (NDA government) with its electorally-allied parties enjoying a reasonable majority, may be the support of over 320 parliamentary members as indicated by some electoral surveys. The current Government enjoys the support of 336 parliamentarians.
In this case, the Government will be very responsive to US sensibilities and demands on all foreign-policy matters, even when India’s national interests are not completely aligned with this posture.
The Government will certainly comply with the US demand that India not import oil from Iran further complicating the efforts of European countries to prevent the Iran Nuclear Civil Agreement from completely unraveling.
The Government will also adopt a less accommodating stance towards China. For instance, recently the Indian Navy has joined Japan, Philippines and the US in naval exercises in South China where China has claimed its sovereignty. As another illustration, the Indian government may shun Huawei, China’s telecommunications giant, to keep the US leadership happy although Huawei can enrich India’s competitiveness and innovation substantially.
The Government will be more focused on encouraging increased foreign investment, and greater capital formation domestically — a continuation of its current policy. Fiscal prudence, simplified tax structure and lower regulatory burdens will be the priority.
On social issues, the Government will seek to award citizenship to illegal migrants in Assam and Northeast India on the basis of faith. These illegal migrants come from Afghanistan, Bangladesh, and Pakistan. While adherents of many faiths will be eligible for Indian citizenship, Islam is not one of them. The Government will also seek to undo Article 370 of the Constitution, which provides special protection to the State of Jammu and Kashmir.
Scenario 2: There are two variants to this scenario. In one variant, the Government (UPA government) will consist of a coalition of over dozen political parties, including the Indian National Congress, who are opposed to BJP. While this may appear to be a recipe for incoherent policy, this is not necessarily so because all these parties share a common agreement on several core policy elements.
Another variant of this scenario is BJP gets about 200–220 seats, but is able to stitch together a majority coalition. In this case, necessity of numbers will certainly force BJP to invite parties who are clearly do not subscribe to BJP’s vision as governing partners or at least seek the support on major policy legislative matters. These parties will have substantial political leverage and impact on the policies.
This Government will not adopt a US-centric foreign policy posture unless the national interests make a compelling case for such a policy. Accordingly, the Government will not necessarily comply with the US demand to stop oil imports from Iran.
The Government is also not likely to take an inherently adversarial posture towards China. For instance, the Government is likely to be more circumspect in participating joint naval exercises that are aimed containing China. And the Government will assess the cyber and security risk of Huawei equipment independent of US pronouncements.
The Government will be more focused on inclusive growth and providing minimum wage guarantee to the economically weaker sections. The Congress has proposed a minimum wage program, NYAY. Some variant of such minimum wage program will be adopted.
On social policies, the Government will not allow the granting of citizenship based on faith to illegal migrants in Assam and Northeast India. The Government will not allow amendments which discriminate against adherents of Islam, as is the case with BJP’s current proposal. The Government will also not allow any effort at diluting or changing Article 370 of the Constitution.
When the electoral results are announced on May 23rd, we will know.
Footnote: Now, we know. BJP led my Narendra Modi and Amit Shah has won big. Very robust majority. On its own even without electoral allies. So, we should expect BJP’s manifesto and vision to be core governing document.