Many lessons flow from David Cameron’s victory in the British elections for Narendra Modi and Rahul Gandhi. First and foremost: it’s the economy, stupid! Economic performance in your last two years matters hugely, even though it’s not the only factor. The last Labour government ended with an economic downslide and so lost the 2010 election. David Cameron assumed office and bravely opted for sustained initial austerity and pain. He promised this would ultimately provide rising growth and employment. He delivered on that strategy, and was voted back.
Time for Gain, Not Pain
By contrast, the UPA 2 registered 8% growth in its first two years and barely 4.7% in its last two years (old GDP series). However, had the timing been reversed, the UPA might have been re-elected. Instead, it crashed to ahumiliating defeat.
The lesson for Modi: don’t hold back, take tough decisions in your first two years — in infrastructure, electricity reform, bank reform, red tape, corruption. Don’t worry about temporary dips in your popularity, or what this or that vote bank will say. Your new land acquisition law is essential to restore fast growth. So hold firm on that, ignoring Rahul’s jeers (and the worries of your own colleagues) of being seen as anti-farmer.
Once roads, canals and electric lines are built, the farmers who protested against acquisition will prosper from rapid growth, and vote for you. Remember, Cameron first inflicted painful austerity and sank in the opinion polls, but bounced back to win. The UPA 2 banked on big spending on social and anti-poverty schemes, like the Labour Party during 2005-10.
Both crashed to defeat. Lesson for Rahul: povertarianism as a strategy is obsolete, and is no longer a recipe for electoral success. By all means, stress safety nets and rural prosperity and facilities. But remember that rapid economic growth does more to raise incomes, jobs and opportunities for all voters than doles and leaky, corrupt anti-poverty schemes. Despite failing with povertarianism in 2014, Rahul continues to beat the same drum. He has attacked the ‘suited-booted’ nature of the NDA government, claiming that only a few rich crony capitalists benefit from it.
This is exactly the claim made by the Labour-left in Britain. It does not work because it is largely untrue. Arising tide lifts all boats save for a few, who need fallback support. In India’s fast-growth era of 2004-11, no less than 138 million Indians were lifted above the poverty line. Prosperity was shared by all, not monopolised by the ‘suited-booted’. That’s why the UPA won in 2009.
Voters know Congress politicians are mostly millionaires from the extortion of lakhs of crores while in office. Naveen Jindal, an industrialist and former Congress MP, once said that only 1% of the money extorted by governments from business was used for elections, and the rest was pocketed. That’s true of both Congress and non-Congress governments. But the Congress has ruled the longest, and made the most millions.
To think the public is ignorant of this, or can be induced to forget this by offering some doles, is vacuous. Rahul’s ‘suited-booted’ attack has caused some excitement in the media and in Congress ranks. This is mainly because Rahul has found his tongue, and is actually saying something. But, alas, he is repeating a losing formula. He should learn from a young Black politician who looks like becoming the new Labour Party leader, Chuka Umunna.
The Party is for Everyone
Despite being Black, Umunna echoes the Blairite criticism that his party under Ed Miliband drifted too far to the left. “For middle-income voters, there was not enough of an aspirational offer.” In saying this, Umunna eerily echoed Modi’s own election campaign criticism of the UPA 2. Modi focused on the aspirations of all voters to a better life, not just subsidies and doles for the poor.
The Labour Party historically represented the working class, but was shut out of power for 18 years after Margaret Thatcher came to power in 1979. Tony Blair restored Labour fortunes by reforming the party to focus on the aspirational concerns of those in the middle, not just the bottom. He won thrice in a row. Modi hopes to do the same. But Rahul seems determined to go the Miliband way.
Finally, the British election showed that regionalism and parochialism are powerful ideas that can swamp traditional left-right divides. The Scottish Nationalist Party (SNP) swept Scotland, and will try again for independence. The UK Independence Party (UKIP) won very few seats, but got a substantial 16% of the vote, by raising fears against immigrants (just as the Shiv Sena did in Maharashtra against immigrants from other states). Northern Ireland is already dominated by local parties based on the Catholic-Protestant divide, not by the left-right one.
If regional and parochial parties are rising in small Britain, don’t expect a different trend in huge, diverse India. Ignore those who think India will polarise into a left-right, Congress-BJP polity. Regional and parochial parties (including the new Muslim parties) will grow. New Delhi will see coalition governments again.