Sunday, January 8, 2012

Growth Story may help BSP returning back to the power.

Has put UP on growth
Total attention of the media in India is towards the assembly elections in the five states. Uttar Pradesh being the largest in terms of size and number of seat gets more bytes. The political analysts have many considerations : Political, Social and Economical. On the basis of the first two factors SP and BSP are contesting the main battle with Congress and BJP are pitted for 3rd and 4th spot.

Corruption in NRHM and NREGA, Land Scams, suspension of 17 ministers, all these go against Mayawati. On the other side Mulayam Singh also is troubled by the tainted goons in the party and Amarsinh pitted openly against him. Rahul Gandhi has worked in UP and put his prestige there. But still there is one factor working in favour of Mayawati which has worked well in last decade in most of the elections in India. This is growth factor, where Mayawati scores over Mulayam’s regime.

During Mayawati’s regime the 200 million population witnessed state touching miraculous GDP growth of 7%. The estimates of Planning Commission say that between 2004-05 and 2010-11, Bihar averaged 10.9% growth, Chhattisgarh 9.45%, Orissa 9.47% and Uttar Pradesh 7.01%. The electorates of Bihar, Orissa and Chhattisgarh have rewarded their chief ministers by re-electing them in the last election. Will Mayawati  also be lucky?

Rahul may win hearts not Votes
According to the economic model of Arvind Virmani, former chief economic advisor, when growth of GDP per capita is faster in the last five years than the preceding five years, the government has a better chance of getting re-elected. Conversely, a worsening of the growth rate reduces re-election chances. This model fits well in the outcomes of the last decade.

This model can be applied to the outcome of some of the results which were unexpected for the political analysts. The NDA government was considered to have met many expectations of the country. Its managers believed that "Shining India" was created during NDA rule. They ignored the fact that the the Asian financial crisis, global recession and two droughts had impacted GDP growth and it had slowed down for the reasons beyond the control of the government. However, the electorates did not take this easy and NDA was shunted out of the power.

The per capita GDP grew only at the average rate of 3.8% per year during NDA's tenure against 4.7% in the previous five years. All scams and political uncertainties had put question marks on the re-election of UPA, but the electorates voted it back to power due to accelerated per capita GDP growth during 2004-09.

In Uttar Pradesh, per capita growth during the rule of Mulayam from 2002 to 2007 was only about 2.3%. This has risen to the average of 4.8% during first four years under the BSP rule. To  control the adverse political factors also Mayawati has reacted very quickly. She has sacked the tainted ministers from the government and to break the effects of Rahul factor. BSP government passed the resolution to divide UP into four parts and the proposal was sent quickly to centre who returned immediately giving advantage to BSP. Mayawati was quick to sense the moves of Congress to appeach minority votes, so she demanded  reservation for the Muslims  and declared to extend support even if constitution amendment is required.

Except the last step all may have positive effects. So, return of BSP back to Lucknow has higher possibilities unless the OBC electorates react very adversely united because of appeasement theory and the benefit may go to lone opposing party to this proposal- BJP which stands at fourth position as of now.

Other Posts : 
Laws of Gravity on Revolution
Useful Hand Yoga.
Will Bihar follow Mamta or Modi?

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