After over a month of suspense, the counting of votes will begin in two days for the elections to five state assemblies. Predicting elections is a mug’s game, especially in four-cornered contests of the sort witnessed in Uttar Pradesh. Anybody who gets his predictions right will be more lucky than wise.
The usual journalistic way to do an assessment is to tour a state for a few days, talk to local politicians and a few dozen voters on the roadside to assess the mood, and then come to a conclusion. Jumping to a conclusion may be a better way of describing this methodology. It is highly subjective and unreliable, and so different journalists visiting the same state come to radically different conclusions, all of which may prove wrong. Election prediction is more a form of entertainment than enlightenment.
For a change, let me attempt a new approach based on economic growth. In these columns in January, i pointed out that Mayawati had achieved a GDP growth rate of over 7% per year in Uttar Pradesh, and this could be the clinching factor in a close race. This was followed up by an Economic Times study of elections in the last decade. The study found that in 63% of cases where GDP growth in the five years of the current incumbent exceeded growth in the previous five years, the incumbent got re-elected.
This shows that accelerating economic growth matters, but is not the only thing that matters. Other factors from corruption to inflation to caste and religious politics can play a big role. Most reports on the current elections to five states focus on these factors. Yet, globally, reporters tend to pay far more attention to GDP growth as an indicator of the public mood. Let us do the same.
We have data for four of the five years of the current incumbents. Mayawati’s average GDP growth has been 7.3% per year, which is better than the 5.8% achieved in the previous years (mostly under Mulayam Singh Yadav). The difference is not as spectacular as the GDP increase Bihar experienced under Nitish Kumar (11%) after rule by Lalu Yadav (6%). Nitish’s performance was so dramatically superior as to be obvious to any reporter visiting the state. Mayawati’s GDP edge over Mulayam is not big enough to be obvious to all. So, other factors could turn out to matter more.
In Punjab, Akali-BJP rule has produced GDP growth averaging 7.5% per year. This is better than the rate of 5.9% per year in the previous Congress regime of Amarinder Singh. Going by our statistical rule of thumb, this gives the Akali-BJP combine a good chance of re-election.
Uttarakhand has been the fastest-growing state in India in the last decade, but owes much of this to the tax holiday decreed for new industries set up there. The tax break was supposed to be compensation for its disadvantage as a hill state, yet the industries actually came up not in the hills but in a narrow strip of plains. The incumbent BJP government in Uttarakhand has generated average GDP growth of 12.8% per year, which sounds very good. Yet this is well below the 14.7% per year generated by the preceding Congress government. Our statistical rule of thumb suggests that the BJP may be ousted by voters this time.
Manipur politics is dominated by ethnic divides between the Meiteis and Nagas. Rebel Naga leader T Muivah was born in the state, and has demanded incorporation of the Naga-majority areas with Nagaland. GDP growth of the current regime has averaged 6.6% per year, faster than the 5.7% in the previous five years. This will give an advantage to the incumbent Congress Party.
Goa is India’s top state in per capita income and social indicators. Its GDP has accelerated under Congress CM Digamber Kamat to 9.4% per year. This is higher than the 8.5% achieved in the previous five years. However, corruption scandals have dogged his regime, and illegal mining is a big issue.
To sum up, the GDP thumb rule suggests that the winners will be Mayawati in UP, the Akali-BJP combine in Punjab, and the Congress Party in Uttarakhand, Manipur and Goa. Note, however, that the Economic Times study estimated that this formula works only around 63% of the time. So, only three of the above five predictions may come true. But we cannot say which three. The lucky winners will be known in another two days, and will reveal how good the GDP method of prediction’.