Monday, July 8, 2013

The Congress will prefer early LS elections….possibly in November

Though the Congress has rubbished the possibility of advancement of the LS elections from May next year to sometime this year, there is a distinct possibility of that happening. A combination of factors – groupable under “cut its losses” and “grab current opportunities” – can be identified for this.

Cut its losses:
1)    The way the Congress sees it – or should see it – the forthcoming November state elections are a big big problem. In all likelihood, the BJP is going to retain MP and Chhatisgarh. Its record there is good. It’s also likely to win Rajasthan because of that state’s penchant for flip-flop verdicts in the last 20 years. There is a good chance that the Congress may be able to retain Delhi, but given the Kejriwal factor, no one can be too sure. Jharkhand is a political lightweight. If the Congress does fare badly in November, the momentum for the BJP will be such that it could well go on to win the May LS elections. The Congress will obviously want to cut its losses and hence, combine it all up in November this year.
2)    The Congress must worry about the Narendra Modi factor. Given his particular brand of politics, it’s a given that communal issues will be on the front burner. The Ayodhya movement has already been re-kindled, no matter the denials from Rajnath Singh. The Ishrat Jahan chargesheet, and any court orders on post-Godhra riots cases, could actually arouse the Hindus’ sympathy for Modi. More terrorist attacks could swing the mood in favor of a Hindu hardliner. The Hindu moderate voter may regret his decision later, but his mind could sway just a wee bit right now. That could be enough for the BJP.
3)    The Congress will also worry about select parts of the economy. The rupee slide is a technical issue. No one understands it. But for the layman, a sliding rupee means “India is finished”, though that’s a bizarre interpretation. Jokes about the falling rupee on the internet are too many for comfort. The RBI can be forced to intervene now…..later with $170 billion of short term payouts looming, it might not be possible.

Grab current opportunities:
1)     The most favorable opportunity of course is the disarray in the opposition. The BJP itself has been severely fractured by its projection of Modi. Large chunks of the party are bound to participate in the elections less enthusiastically than they would otherwise. This mood could change with passage of time.
2)     The Congress has just wrested power in Karnataka. The mood of the electorate is still against the BJP. But a year later, the mood could swing the opposite way. Look what’s happened in UP; the SP simply cannot be sure about where it stands today. Also, with Yeddy still out, the timing in Karnataka is perfect
3)     The Congress is going to bite the bullet on AP soon. In all likelihood, it will agree to the creation of Telengana with the pre-condition that the TRS merges with it. At the same time, it may agree to make Jagan the CM of the rest of AP. Neither Jagan nor the TRS want to have anything to do with the BJP. Their options also are limited. Both may agree.
4)     The Congress has an advantages as far as alliances are concerned. It has mended its fences with the DMK. In any case, the DMK has no option but to sign up with the Congress. Likewise, the JD(U) may not join the UPA, but it will surely hurt the BJP. The ability of the Congress to work with both Nitish and Laloo is an advantage. Ditto in UP, where the SP and the BSP are bound to support the Congress. The BJP on the other hand is in serious ally trouble. In fact, it has possibly decided to junk them for now. Forget the JD(U). Even the Shiv Sena is sparring with the BJP in Maharashtra. The SAD is unhappy with the Ayodhya mandir issue. All in all, it’s an opportune moment for the Congress.
5)     The biggest poll handouts have already been made by the Government. The DBT (Direct Benefit Transfer) scheme has been rolled out. The Food Security Bill is a reality. The Land acquisition may also go through. MSPs on agricultural products have been increased; fertilizer subsidies retained. NREGA wages are up. The Congress can claim its achievements, without really having to worry about implementation. From the Congress’s point of view, the timing couldn’t be better.
6)     Some parts of the economy will be comforting. Inflation has dropped substantially. Even food inflation will drop in the months ahead. GDP growth has bottomed out. The Banks will cut rates to boost the economy. The PSUs will support capital investments. Stuck projects will be rolled out. Decision making will be speeded up. Credit rating agencies will hold their guns. And hopefully, even the rupee will lift.
7)     The worst damage of the 2G and Coalgate scams has already happened. 2G has proved to be a damp squib, something the party can easily fend off. Coalgate also has lost its way; and essentially been reduced to a few cases of grassroots corruption, in which all parties are involved.

The real truth is that the Congress will see itself in an advantageous position now. It will seriously consider advancing the LS polls to November this year, notwithstanding all its denials. Today’s ET reports that the BJP may formally anoint Modi as its PM candidate later this month. Looks like the poll season has well and truly begun!

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