By Rupa Subramanya Dehejia
It’s election season. The states of Assam, Tamil Nadu, Kerala and West Bengal and union territory Puducherry go to the polls in coming weeks. Themes running through the election campaigns in all of these states include food inflation, corruption, governance, development, repercussions of national scandals — in particular the 2G spectrum scam – and, as ever, the specter of an anti-incumbency backlash.
Of course, it’s not all economics. Personalities and populism always figure in Indian elections, not least in Tamil Nadu, which features outsized political leaders who give away outsized goodies to their supporters. Although less colorful, versions of this potent electoral mix show up in the other states as well. Compare that with last year’s Bihar elections, which showed that a development-oriented policy built on good governance and sound fiscal management can be a winning ticket.
Can we expect an encore performance from one or the other of these two playbooks in the states going to the polls this time around?
In the coming weeks, Economics Journal will take part in the extensive coverage of state assembly elections you can look forward to on India Real Time. This week: The issues in Assam, the first to go to the polls.
This is a resource-rich state plagued by decades of insurgency, law and order problems, and illegal migrants. In addition, the state’s remoteness and poor infrastructure have held it back. Per capita income in the state is only 60% of the national average. This reflects both a lower starting point and on average lower growth than the country as a whole. As you’d expect, with lower income comes a comparably poor performance on human development indicators, ranking 14 out of 15 among major states. Interestingly, the literacy rate in Assam is higher than the national average so the picture is not entirely bleak.
Contrast these sobering statistics to the reported growth rate in declared assets held by 46 sitting legislators from a range of parties that are contesting in the first phase of the elections. These grew at an impressive rate of 197% between 2006 and now. Clearly something is growing rapidly in Assam! In addition to the rich, even some former militants and charge-sheeted members of the Assembly are in the fray.
The state’s experience also is suggestive of a political economy which involves a two-way causal relationship between insurgency and under-development. There’s a chicken and egg problem here: does under-development cause insurgency or insurgency retard economic development? To put it another way, which needs to come first, development or peace?
In 2001, when the Congress party unseated the Asom Gana Parishad, the new Chief Minister Tarun Gogoi made it clear which side of the debate he was on when he announced: “Development won’t wait for peace, rather development will bring peace in the state.”
After winning re-election in 2006, Mr. Gogoi is campaigning again on a development platform and highlighting his government’s successes in bringing development to the state. India’s Finance Minister Pranab Mukherjee, in Assam recently campaigning with Mr. Gogoi, made the case for improved fiscal management by the state government. Interestingly, he also argued that increased transfers from the central government, also Congress-led, has given the state government “more elbow room to take up more development work.”
Does this suggest that continued central government largesse will flow only if the Congress is returned to power in Assam? The canny Mr. Mukherjee of course didn’t say this explicitly, but the question is begged.
The AGP, now the main opposition party, is campaigning on allegations of corruption against the ruling Congress in its two consecutive terms in power. The principal scam centers around the allegation that in the North Cachar Hill district, a sum equivalent to approximately $250 million was diverted to the benefit of Congress ministers.
The AGP also contends that Congress has brought only “signboard” development, while genuine development has lagged behind. They have come up with a campaign manifesto which places inclusive development at its center. Even the Bharatiya Janata Party has been campaigning on a development platform in Assam.
Evidently, all of the major political parties in Assam have drawn lessons from Chief Minister Nitish Kumar’s electoral triumph in Bihar last year. They appear to believe that running on a development-oriented platform will bring success at the polls. We’ll know in a month how this has played out.
Share your thoughts on what you believe are the important economic issues in the state you live in. If you’re voting, how important are economic issues in your choice of whom to support? And if economic issues are important to you, are you voting based on your state’s recent economic performance or its future prospects? If you’re not voting this time around, are you watching the elections for clues on what may be coming your way?
Rupa Subramanya Dehejia writes Economics Journal for India Real Time. You may follow her on Twitter @RupaSubramanya.
