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Watchers of Indian politics seem to agree that Narendra Modi’s political capital is on a steady decline. The next Lok Sabha elections are due this April and May. As recent opinion polls suggest a hung parliament, a landslide (like the one in 2014) may be out of question. But can the BJP eke out a thin majority in the face of an increasingly-united opposition and disenchantment from some voter classes?

India’s domestic politics is a complex maze dominated by ethno-regional political parties that campaign mainly on local issues. Though hardly a national political force, these regional parties can aid or undercut either major party’s quest to form government in New Delhi. Barring the Nehru-Gandhi dynasty, Modi is about the only Indian leader to successfully challenge that dynamic, forming a government on his own party’s strength.

It will be hard to repeat that feat, for both political and economic reasons. On the political front, there are suggestions that the BJP has lost the ‘semi-final’ to the Congress before the elections are held this Indian summer. Last month, Congress outsmarted BJP in legislative assembly polls for three key states of Rajasthan, Madhya Pradesh and Chhattisgarh.

Another political quake hit last week when two regional parties formed an anti-BJP alliance in Uttar Pradesh (UP), India’s largest electoral state. In the 2014 general elections, the two parties cumulatively gathered same share of statewide votes as BJP (42%) – but a lack of united opposition helped BJP win 71 of 80 UP seats. Several other states where the left didn’t coalesce as a voting bloc went the BJP way.

Together, the above four states, where electoral trouble is clearly brewing for Modi sarkar, make up over a quarter of India’s 543-seat lower house. Feeling energised, the Congress, which is showing a gain of over 100 seats in political polls, is now courting likeminded parties to put up a united front against the incumbents. Whether the Gandhi family is able to capitalise on this opportunity is an open question.

The economic realm is a mixed bag. On one hand, the government’s prudent macroeconomic management achieved sustained high growth without overheating the economy. This is in contrast to highly inflationary period in Manmohan’s second term (FY10-14). India averaged GDP growth of 7.35 percent in Modi’s first four years. It is projected to hit 7.3 percent growth this fiscal and 7.5 percent in FY20, as per IMF stats.

Yet that remarkable feat is marred by rising inequality, as identified in a recent Oxfam report. The price of growth seems to have been paid by the farming sector, which was suppressed to keep input prices low. Unequal growth couldn’t meet the electoral promise of creating one million jobs per month. As for the self-employed that form a good chunk of Indian labor force pie, a couple of government missteps made life harder.

One, the late-2016 rollout of the demonetization drive hurt the wrong audience, as cash evaporated from formal and informal markets, causing shortages, inflation, even some deaths. And two, the following year, the long-debated introduction of a unified Goods and Services Tax (GST) regime had admirable intent, but its rollout was – and still is – troublesome, hurting small businesses especially hard.

Reports coming out of India suggest that the Modi government has its farming flak exposed so close to the elections. The BJP’s fiscally-conservative credentials led it to withhold purchasing crops from states, which, in turn, curtailed their own farming purchases. This led to a recession in the farming markets even as drought conditions and falling commodity prices were already hurting farmers.

The cash-ban mentioned above further added to the farmers’ woes. All of that forced the government to belatedly raise the minimum support prices late last year. Whether or not that concession – along with the government’s promise to provide free-of-cost healthcare to 500 million poor individuals – placates rural India, their disenchantment looks ripe for the opposition to capitalise on.

Meanwhile, India Inc., which had heartily supported the BJP in last polls, may also be developing some cause to be wary of Modi sarkar. Investors weren’t impressed when yet another central bank governor abruptly left last month after developing differences with the government over on monetary management and banking-sector reforms. Lack of land reforms also irked the big business. Recent events have put more pressure on the premier to not be seen as too soft on corporates. Modi may not be corrupt himself, but his anti-corruption message has lost its sheen, especially in the wake of the Rafale-Reliance controversy. The issue was quickly seized by the Congress leader Rahul Gandhi and that has left the Modi regime on the defensive. That controversy refuses to die several months later.

Recall, Modi was elected on a strong anti-corruption platform. But the promise to bring back looted wealth stashed abroad didn’t see much progress, other than publicising pursuit of cases against a few business magnates hiding abroad. The demonetization drive couldn’t fix the issue of unaccounted-for wealth and businesses.

Against this backdrop of mixed record, it will be interesting to see what kind of a political playbook Narendra Modi and his fixer Amit Shah deploy to get the BJP re-elected four months from now. Modi’s speech at the recent BJP Convention suggests that he is more comfortable attacking Congress’s past than defending his own government’s record and will not feel shy from using anti-Pakistan rhetoric and subtle appeals to Hindu nationalism. Congress and its allies will need to find a better message.

Copyright Business Recorder, 2019