Rahul Gandhi and Congress do badly in India’s state elections

As India waited this morning for results of five state assembly elections, the most telling headlines in the day’s newspapers, along with Rahul Gandhi’s failure to galvanise votes in Uttar Pradesh (UP), were on share movements yesterday of leading companies - Jaiprakash (JP) group companies went down while Anil Ambani’s Reliance (ADAG) stocks went up, as did shares of sugar companies.

Those share movements, which continued today, reflect the ousting in the UP elections of the blisteringly corrupt Bahujan Samaj Party (BSP) government, led by chief minister Mayawati who favoured JP companies with massive land deals and a grand prix circuit, and also persecuted sugar companies with vindictive extortion. They also welcomed the victory of the Samajwadi Party (SP), whose leader Mulayam Singh Yadavhas helped Ambani with land for power projects in the past and will be kinder to sugar companies.

Such is the condition of crony politics in India’s largest state which has a population of some 200m – roughly the same as Brazil’s or France, Germany and Italy combined. The question now is whether the SP, led by Mulayam Yadav, 72, who has been chief minister three times before (1989-91, 1993-95 and 2003-07), will abandon the gangland ridden “goonda raj” of his past administrations and let his 38-year old son Akhilesh (above), who has been an MP since 2000, push constructive development policies.

Overall the state assembly election results announced today have been bad for Congress, not only in UP where Gandhi failed to make a mark, but also in Punjab which it unexpectedly lost, and in Goa where it was routed after its state government’s involvement in extensive mining corruption. To varying degrees, these results show voters reacting to Congress’s dire performance and weak leadership nationally, with the government’s series of corruption scandals and other policy failures, as well as to price rises and other local issues.

In UP, once its main political base and still the political home of the Gandhi family, Congress did dismally. It won only 27 seats in the 403-seat assembly, up from 22 last time. That was far far short of the 100-plus it had hoped for, and less even than the figure of around 60 that would have been tolerable. Its vote share was marginally better, rising from 12% to 17%.

Gandhi had a good election campaign in terms of personal image because he developed, during some 200 meetings, into a powerful speaker (as I noted here a month ago). However, while he and his family projected their dynastic credentials, he was not committed personally because he was not standing as the potential chief minister (that would have been an extraordinarily difficult  job, which he scarcely needs when the prime minister’s job is within his grasp). He also spent most of his time telling his massive poor audiences what they did not have, and how awful Mayawati’s government had been, instead of having concrete proposals for boosting their livelihoods.

That was a losing formula, made worse by weak constituency-level organisation. The lesson is that the dynasty’s alleged “magic” has limited currency, though Gandhi’s energetic campaigning might well help Congress in the next general election that is due in  2014. Speaking on Indian tv this afternoon, Gandhi took responsibility for the UP defeat and said he would “continue working for the people” and to improve the country’s political system. “I expect some victories and some defeats along the way,” he added, indicating some analysts are suggesting that he does not have ambitions to enter the government and become prime minister any time soon.

Gandhi had an easy target in Mayawati, whose overwhelming corruption and self-aggrandisement has been among the worst ever seen in independent India. Businessmen have told me she extorted an alleged $100m a year from the sugar industry, mainly by finding minor breaches of regulations and then demanding  corrupt payments that far exceeded routine bribes. She then started court cases against reputable heads of well known companies who sometimes fled to avoid jail. In futile attempts to clean up her government’s image, she sacked or suspended over 20 ministers in December but it was clearly too late.

Economic growth in UP over the past five years of around 6%-7% has looked good on paper, but neighbouring states did much better and the growth was focussed to a considerable extent on Mayawati’s pet infrastructure projects, leaving vast areas of the desperately poor state under-developed. She is also credited with improving street-level law and order, which was appalling when Mulayam Yadav was last chief minister, and she always relies on the state’s strong Dalit (bottom of the caste hierarchy) voters for support – but these factors did not save her from defeat.

The Bharatiya Janata Party (BJP) did somewhat better in the polls than had been expected. It challenged Congress for control in Uttarakhand (a state adjacent to UP) and won control in Goa, though its UP result was worse than predicted.

It is too early to interpret all the national implications of the polls. Certainly the BJP will feel empowered to step up its attacks on the Congress-led coalition government which, in turn, will be looking maybe to both UP’s leading parties (SP and BSP) for support in parliament. This will not only affect the future of various economic reforms and the stability of the government, but also the makeup of the Rajya Sabha (upper house) where there are indirect elections later this month and the choice of India’s next president in the summer.

 The most constructive hope from the results is that Mulayam Yadav and his son will lead UP better than the family (which includes several carrying the “goonda” tag) has done in the past – with Akhilesh Yadav maybe showing that dynastic succession can provide constructive leadership from a younger generation.

March 7: For an updated and slightly longer version of this article, go to John Elliott’s Riding the Elephant blog http://wp.me/pieST-1C3

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