Black Friday Not So Good for Manmohan

As suggested in an earlier post, the just-concluded elections in five Indian states provide an important signpost regarding Prime Minister Manmohan Singh’s political future.  As they involved four of the country’s 28 states – including West Bengal and Tamil Nadu, two of the most populous (plus the federally-administered city of Puducherry) – the contests were viewed as a collective national referendum on Dr. Singh’s beleaguered coalition government.  All told, roughly a quarter of India’s 675 million-strong electorate had an opportunity to cast a ballot over the past few weeks.  The election results were announced last Friday, May 13, and they offer mixed news for Singh and his Congress Party.

Although the prime minister is not given to open displays of emotion, he must have greeted the electoral drubbing the Communist Party of India-Marxist received in its long-time bastion of West Bengal with a more than a tinge of personal satisfaction.  In earlier times, the CPI-M’s parliamentary support was vital to the survival of his coalition government, though given the party’s ideological bearings it came at the cost of thwarting much of the economic liberalization agenda Singh would have otherwise pursued.  But the Communists dramatically broke with the Prime Minister over the 2008 U.S.-India civil nuclear accord, precipitating the tumultuous parliamentary vote of no confidence that nearly brought down Singh’s government but which ultimately was his finest hour in office.  The Communist rout in West Bengal, combined with its much narrower loss in the southern state of Kerala at the hands of a Congress Party-led alliance, has now pushed the CPI-M to the fringes of the national political landscape.

The CPI-M’s decimation in West Bengal was administered by the Trinamool Congress (TMC) party, the most important partner in Singh’s coalition government.  But this development does not add up to a net gain for the embattled Prime Minister.  The victor’s laurels in West Bengal belong to TMC’s leader, Mamata Banerjee, who today was inaugurated as the state’s chief minister.  Banerjee is a charismatic if mercurial figure who was the strongest voice of dissent against economic reform within Singh’s cabinet over the past two years.  Since she rode to victory by embracing economic populism, her resistance to Singh’s reform agenda could become more entrenched.  This is especially true on the economically important but politically explosive topic of acquiring farm land for industrial and infrastructure projects, an issue on which she revived her political career.  (Taking a page from Banerjee’s playbook, Rahul Gandhi, scion of the Nehru-Gandhi political dynasty and the Congress Party’s secretary general, has intervened in his own land-use controversy, this one involving the acquisition of farmland for an expressway project in Uttar Pradesh.)

Some argue that Banerjee is smart enough to realize that the key to her political longevity is delivering good governance and economic pragmatism to a state that has long suffered from the absence of both.  An optimistic sign is her selection of Amit Mitra as West Bengal’s finance minister.  A U.S.-educated economist, Mitra is the long-time head of the Federation of Indian Chambers of Commerce and Industry and a key player in the economic reform lobby.  Her rather derelict service as federal railways minister over the past two years (see here and here), however, offers a cautionary note about her governing skills.  (Also read Mahhavi Bhasin’s analysis.)

Singh’s government has promised to draft new legislation regulating the acquisition of land for industrial projects by July.  Its provisions will say much about how events in West Bengal will affect the prospects for economic liberalization.

Elsewhere, the Congress Party and the Dravida Munnetra Kazhagam (DMK), the second largest coalition partner in Singh’s government, experienced electoral disaster in the southern state of Tamil Nadu, as voters reacted strongly to the stench of the telecoms corruption scandal (which, after the Watergate affair, Time magazine in an exaggeration calls the worst abuse of power in recent history) that now surrounds both parties.  The backlash should give Singh all the more reason to keep his promise of rooting out corruption.  Also, given the diverging fortunes of the TMC and DMK – not to mention the fact that more and more of the DMK’s senior leadership is landing up in jail – one should expect the former to pick up more ministerial posts, and the latter to lost seats, in the forthcoming Cabinet reshuffle that Singh has pledged.

Although some media reports portray the election results as a boost for Singh’s government, what is striking is the lack of enthusiasm voters displayed for the Congress Party.  Of the five states that went to the polls, the party won an outright majority only in Assam, a moderate-size state in the northeast.  The CPI-M’s demise in West Bengal was Mamata Banerjee’s handiwork and she alone will take the glory from that contest.  The government in Kerala led by the CPI-M was only narrowly defeated by the Congress Party and its local allies – and this despite Rahul Gandhi heavily campaigning on behalf of the party’s candidates.  A Congress government in Puducherry was summarily booted out of office.  Considering the party’s rather poor showing in the Bihar state elections late last year, Congress has not had a run of good luck recently.

A final note concerns the continued regionalization of Indian politics.  Of the country’s 10 largest states, Congress is fully in charge in only one: Andhra Pradesh.  And the Bharatiya Janata Party, the main national opposition party, was a non-factor in the just-concluded state elections.  What this means on the national stage is that unwieldy coalition governments will remain the norm in New Delhi.  This is another reason that the much-anticipated second generation of economic reforms will be a long time in coming.