A week in politics, they say, is a long time. This cliché fits the Indian context perfectly. One week has all but reversed the initial electoral contours and once again levelled the playing field as it were. To put it another way, it is once again a very open election.
Even as the faction-ridden Bharatiya Janata Party (BJP) was patching up its internal differences, the United Progressive Alliance (UPA) suffered a severe jolt when the Congress, its main constituent, decided, after much prevarification, to part ways with its key allies, the Samajwadi Party in Uttar Pradesh and the Rashtriya Janata Dal in Bihar.
It is a huge gamble for the Congress because it is a popular belief in Indian politics that no one can take national power without managing to win a majority of the seats in one of the key northern states—Uttar Pradesh, Bihar or Madhya Pradesh. Between them they account for 149 seats, which is a quarter of the total strength of the Lok Sabha and a little over half of what it takes to manage a majority in the Lower House.
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Automatically, what would have been two-cornered and three-cornered contests will now become contests with multiple contenders. In this complex game, the outcome will be determined by how caste and wealth come together. The immediate beneficiaries of this falling out are going to be Nitish Kumar in Bihar, Mayawati in Uttar Pradesh and the BJP in Madhya Pradesh.
At the same time, it is increasingly becoming apparent that the Left, too, is facing problems. Not only has it had issues deciding its contestants, even insiders are now conceding that it is not in a position to retain the 61 seats that it had in the 14th Lok Sabha. A diminished Left would be disastrous for the prospects of the so-called Third Front—a non-Congress, non-BJP alliance. Without the numbers it will find it difficult to wield influence and, more importantly, keep the flock together in the 15th Lok Sabha if the electoral verdict is splintered with no clear winner.
No wonder, then, that several regional parties are not willing to commit unequivocally to any of the three political formations. Some in fact, such as the Biju Janata Dal (BJD), broke away from the NDA after it severed its state-level alliance with the BJP, but has not hitched up with the Third Front—despite some photo-ops with key Left leaders.
If it is indeed an open election, then what does it augur for the next government at the Centre? If neither the BJP nor the Congress are able to make substantive gains from their current numbers or at the worst retain them, then their position on the high table will be determined by non-Congress, non-BJP constituents. If the latter is made up largely of the Left-sponsored Third Front, then an alliance with the BJP can be safely ruled out. An in-principle association with the Congress is not an issue, what would be at stake is the construct, and the individual roles that will have to be assigned. From all indications so far, by design or accident, at this stage it looks as though a Third Front kind of coalition stands the best chance of assuming power at the Centre.
Strangely Indian industry, if some of the recent meetings between top company chiefs and political parties together with the political grapevine are to be believed, is plunking, or at least not averse, to a Third Front. Very counter-intuitive, given the rash of analyst reports, which see this as the worst option that could lead to policy paralysis and maybe even flight of foreign capital. All the more since some critics have harshly even dubbed it a “mad exercise”.
But maybe that is what Indian industry needs at this point of time—a brief breather in the progress of the liberalization juggernaut. The global meltdown has restricted access to foreign capital, the plunge in the domestic stock markets have ensured that this route for raising money is plugged and cautious domestic banks are not willing to fund any projects where they are either not able to understand the risk or perceive it to be a potential threat to their balance sheets. Strapped for funds, companies, including the top industrial houses in the country, are technically targets for a takeover; multinational companies, despite the global recessionary outlook, still possess deep-enough pockets to pose a potential threat.
Neither the Congress nor the BJP, which have proved their reformist credentials, have the ideological wherewithal to apply the brakes, unless they are able to justify it on the basis of extenuating circumstances. The Third Front led by the Left will not be similarly handicapped; especially with the Left making it a point to include in its manifesto the point that it would strive to prevent any backdoor foreign direct investment.
While at the end of the day, it is the 714 million citizens of India who will elect the next government, there is no denying the role that wealth plays in shaping the political options that are offered to the people. Seen from this perspective, the emergence of the Third Front may not be a random occurrence, instead there is method in the madness.
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at email@example.com