Assembly results 2018: Yes, demonetisation is good in the long term

It is time the Opposition conceded that note ban has been good for it in the long term

Results for five assembly elections will be declared today and trends indicate that the BJP may draw a blank as far as majority in any state assembly is concerned. In the three Hindi heartland states where the BJP had been in power, the Congress looks to be on its way to power to Chhattisgarh and Rajasthan while the result in Madhya Pradesh is nothing short of a cliffhanger.

Even though the final result is some time away, we can look at the big takeaways from these trends.

In the long run, demonetisation was a good thing

When it was announced in November, 2016, demonetisation was widely criticised by the opposition parties. Economists, business papers also questioned the wisdom of such a move while the industry was guarded in its response. When the results of Uttar Pradesh assembly elections were declared in March, 2017, various experts credited demonetisation for the BJP sweep in the north Indian state. 

While everyone acknowledged the pain notebandi had caused to the population - especially in the rural areas - it was argued that it will have a positive result in the long run. Perhaps it is time for opposition parties to concede that this has been true as far as their electoral prospects are concerned. The story of these state elections (and that of Gujarat assembly elections earlier) has been of the rural-urban divide. Reports from all these states talked about severe rural distress.

The opposition parties, especially the Congress made farm/rural distress and lack of jobs their main campaign planks. This seems to have resonated in all these states (and even in Gujarat earlier). And if rural India faced distress then demonetisation must take the blame for disrupting India’s economy, especially in the rural areas. Demonetisation was credited with BJP’s win in UP in the short-run. It may have been a stretch to make this assertion but it is an inescapable reality that demonetisation affected rural and informal economy badly and this has only strengthened the opposition. If a Congress party was able to give a scare to the BJP in Gujarat and wrest the states in the Hindi heartland than the credit for the same has to be shared by the Congress’ ability to give voice to rural distress but also to the BJP for causing it through demonetisation. The Indira Gandhi government’s excesses during Emergency imposed between 1975-77 were blamed for its defeat in 1977 elections. Nasbandi (male vasectomy) forced on a large number of male voters to control population growth was said to be the biggest reason for the public’s disenchantment. Notebandi has truly proven to be the BJP’s nasbandi.

Congress-mukt Bharat is now a pipe dream

The BJP had been winning straight fights against the Congress party in every election for state assembly since 2014, except in Bihar when the Congress was a part of the Mahagathbandhan with the RJD and JDU and in Punjab when the BJP was a part of alliance with SAD. This only highlighted the weakness of the Congress organisation which last won a straight battle against the BJP in Karnataka in 2013. The results in Rajasthan, Chhattisgarh and Madhya Pradesh mark a big change in this situation. In these three states, the Congress was not able to tie-up with other parties (like SP or BSP) and took-on the BJP on its own. Irrespective of the final results, these numbers indicate a clear revival of the Congress party in the Hindi heartland. PM Narendra Modi and BJP President, Amit Shah’s dream of a Congress-mukt Bharat is now a pipe dream.

BJP may not be able to control the Rajya Sabha now

Rajya Sabha or the upper house represents the interests of the states and act as a check against a bulldozing central government. This is by constitutional design to prevent the centre from making changes to the Constitution. Under Narendra Modi, the BJP was in power at the centre and also in a large number of states. Its ability to make laws, however, was checked by the significant numbers that the opposition parties had in the Rajya Sabha. With the Congress doing well in Gujarat earlier and in Rajasthan, Madhya Pradesh and Chhattisgarh today, it is unlikely that the BJP will be able to get complete control over this house even in the next few years. The results in 2019 notwithstanding, the Union govt will not be able to make major changes to laws or the Constitution in the coming few years.

The naamdaar won this round

In the last few assembly elections, the Prime Minister has attacked the Congress President, Rahul Gandhi as a dynast by referring to him as a naamdaar while calling himself a kaamdaar. At the same time, the BJP has attacked Rahul Gandhi as being a non-serious politician. Whether it was the campaign for the Gujarat assembly or this round of assembly polls, Rahul Gandhi was the focus of the BJP attack. It would be fair to say that this has only helped him get more attention. He has countered this by keeping his attack on the Modi government at the centre or the BJP governments in the states focused on rural or farm distress, lack of jobs, demonetisation, crony capitalism and mismanagement of the GST regime. Even though neither Rahul Gandhi nor PM Modi was a direct contestant in this round of polls, they both led the attack for their parties and the naamdaar has clearly come out on top. Having faced a series of reverses in the last few years, today’s results show he is now in command in his party.

Where are your friends?

Today’s results come a day after Upendra Kushwaha of the Lok Samata Party bid goodbye to the BJP-led NDA and is likely to join the Congress-led UPA. With the TDP already having quit the NDA earlier, the BJP may find its allies getting both restive and assertive. While the Congress party has been engaging with other opposition parties in the last four and half years, its win in today’s state assemblies will make it more attractive for other parties as it will be seen as a party getting its momentum back.

Looking forward to 2019, Prime Minister Narendra Modi and his consigliere, Amit Shah have a big headache to contend with while Rahul Gandhi and Congress party can have their hopes a bit higher. The contest in 2019 is now well and truly open. 


Twitter: @bhayankur