Swamy: India's Upset: Pre-Election Alliances Were Key--Biggest questions to focus on economic policy

Date: 05-14-2004

HONOLULU (May 14) -- The outcome of India's 14th general elections, in which the ruling National Democratic Alliance (NDA) was defeated by an alliance led by the once-dominant Congress Party, was a big surprise to most election watchers. The reasons for the NDA's defeat are complex, said Arun Swamy, an East-West Center specialist on South Asia, but a key factor was the ability of the Congress Party to form alliances before the election.

Indications for some time had shown that the tide was turning against the NDA and its leading constituent, the Bharatiya Janata Party (BJP). While early opinion polls forecast a landslide victory for the NDA, later ones suggested
that the government would come back with a bare majority in parliament. (272 seats are needed for a majority). Subsequently, exit polls after each phase of the four-phase election process made it clear that the NDA was going to lose its majority.

What was not expected, Swamy said, was that the NDA's final seat tally of 185 would drop well below those of the Congress and its pre-election allies (217), while the Congress Party itself, with 145 seats, edged out the BJP (138) to become the single largest party in parliament for the first time since 1996. With the remaining 137 seats going to parties that mostly prefer the Congress Party to the BJP, most notably the two communist parties and a socialist party from northern India, the next government is almost certainly going to be formed by the Congress Party.

As many commentators have suggested, the ruling alliance's emphasis on issues that appealed to the urban middle class left the poorer and rural voters unimpressed. In several key states the NDA, where it had done well in the past, was almost wiped out, among them the largest state, Uttar Pradesh, and two big southern states. However, there were many regions where the NDA improved its performance over the last election. In many of these regions, the Congress Party was in power locally, or had been in power until recently. This suggests, Swamy said, that voters tended to vote against the party in power locally, whatever that party was.

Moreover, the key to the election, Swamy said, was the ability of the Congress Party to form alliances before the election. In India's electoral system, where many parties compete but one can win seats even with a low percentage of the votes, parties that come in second often win a much lower percentage of the seats than their vote share. Differences in the Congress party's ability to form alliances often explained why the NDA was almost wiped out in some states but dramatically improved its standing in other nearby states.

The implications of the Congress Party's victory for the future of Indian politics are many, Swamy said. The most obvious is that India's long-standing political dynasty, the Nehru-Gandhis, are likely to return to office. Sonia Gandhi, the Italian-born widow of Rajiv Gandhi, who served as prime minister from 1984-89, is credited with having led the party to victory and could take over as prime minister. Her son, Rahul, ran for parliament, while her daughter, Priyanka, was an active campaigner.

Since becoming Congress Party president in 1998, Sonia Gandhi has been able to unite the party's many factions, and revive the party's support among the poor. However, in her first attempt to gain power in 1999, she alienated many potential allies and, in the past many parties opposed to the BJP were also unwilling to support Sonia Gandhi, owing to her "foreign origins." This time, however, enough parties seem to be willing to accept Sonia Gandhi as prime minister so that she can take over the office if she wants it. The decision is likely to be made by Monday.

If Sonia Gandhi does become prime minister, it is likely to galvanize the right-wing BJP, Swamy said. The BJP will otherwise be forced to debate whether it lost because it pushed its divisive anti-Muslim agenda to the background, or because hardliners, like those who carried out anti-Muslim riots in the state of Gujarat, alienated moderate voters. Rallying against a "foreign" prime minister could help overcome these divisions.

On the policy front, the biggest questions have to do with economic policy. While it was the Congress Party that introduced economic liberalization in the early 1990s, the Congress Party manifesto also expressed reservations about the major remaining item on the liberalization agenda -- the privatization of state-owned firms. With the government likely to take support from parties on the left, it seems likely that several major sales of state-owned firms to the public will be put on the back burner for now, Swamy said. Indian stock prices have fallen sharply in anticipation of this prospect.

The new government will also likely increase social spending, perhaps by cutting defense spending. At the same time, Swamy said, there will be no reversal of liberalization in the areas of business regulation or foreign trade as there is a broad consensus on this, and the government will be able to find other allies if they lose the support of the communists.

On foreign policy, there is likely to be little change. The Congress Party will continue with talks scheduled with Pakistan but is no more likely to make significant concessions on the disputed province of Kashmir than the BJP, Swamy said. Indeed, with Sonia Gandhi's "foreign origins" being an issue, the government will have little room to maneuver. A Congress government might, however, be more willing to grant greater autonomy to Kashmir within India.

On relations with the United States and the war on terrorism, there will also be little change, Swamy said. It was the Congress Party that blocked efforts to send Indian troops to Iraq and that insisted that the Indian parliament condemn the U.S. invasion. The party will be even less likely to support U.S. actions in Iraq than the BJP.

Arun Swamy can be reached at swamya@eastwestcenter.org or 808-944-7542.

This is an East-West Wire, copyright East-West Center