India's Watershed 2014 Election, A Whole New World?

“Be the change that you wish to see in the world.” – Mahatma Gandhi

India has spectacularly voted for “Development, Good and Effective Performance” with a firm rejection of caste and religion based politics. It has brutally punished rhetoric, platitudes, doles, non-performance and corruption. The 33 year old BJP led by Narendra Modi has swept clean into power with a overwhelming majority of 282 out of 543 seats, in what could be called a first watershed election in India’s history since its independence in 1947.

Only 272 seats are needed to form the government. Economy and development have overtaken the traditional fault lines. Analysts are saying that such a clean sweep for BJP could not have been possible had the Muslims, backward classes and other religious minorities voted on traditionally caste lines. It is as if India has headed the call of Mahatma Gandhi and has mandated Narendra Mod, a man who has been stridently accused of divisiveness to lead the fundamentally different secular socio-political paradigm of the country.

Unlike a cobbled together coalition government of the Congress party, BJP’s Modi will form a cohesive government without messy coalition politics. He and his team are widely expected to be firm, decisive, undertake bold reforms and be focused on action.

Pro business, BJP’s victory has cheered the markets on the election results declaration day. The benchmark Sensex exuberantly rose 1,470 points to hit a new all-time high of 25,375.63 in early trade and but closed at an all-time closing high of 24,121.74. As per Deutsche Bank , it is is expected to rise to 28,000 by December 2014. The Rupee closed 11 month high of Rs, 58.79 to a US Dollar.

Result is game changer for Indian Polity

Election 2014 is a game changing election. All Parties who have played the caste, creed, religion or dynasty card have been shown the door. The opposition will have to reinvent itself as no party, not even Congress, can collect enough numbers without an extensive multi-party coalition. Lok sabha has 543 seats and 272 seats are needed to form a government. BJP on its own have 282 seats – and with its alliance partner (the NDA) has won 335 seats.

The 129 year old Congress Party which has degenerated into dynastic fiefdom of Sonia Gandhi and Rahul Gandhi [ no relation to Mahatma Gandhi] with a titular Prime Minister Manmohan Singh has been obliterated. It has been humiliated with only 46 seats.

Communist Parties have become irrelevant. with only 10 seats.

The voters have also become leery of activism. As an example Aam Aadmi Party’s Kejriwal, Delhi’s Chief minister who styles himself an Activist, was unconvincing in his election campaign. AAP appears finished at the national level with measly 4 seats.

Regional parties in West Bengal and Tamil Nadu have won by majority in their states but nowhere else. Detailed results on Election Commission of India Web Site (“Aladdin”).

Modi during his campaigns mesmerized the electorate during his campaigns with his vision of development, effective, action oriented good, clean governance. One of his slogan was “Less Government , More Governance“. Modi cited his 10-year track record of good, action oriented governance in Gujarat. Under him Gujarat clocked a 10 percent growth, much above India’s average of around 8 percent, for the 10 year period ending 2012.

An amateurish and utterly unconvincing Rahul Gandhi led the Congress campaign concentrating mainly on Modi bashing, playing the bogey secular card and his attacking Modi’s alleged inaction in 2002 Gujarat violence. This was disingenuous considering the fact that in the aftermath of Indira Gandhi’s assassination more than 8,000 Sikhs were massacred including 3,000 in Delhi which was directly under Congress control. Moreover Congress ruled states have a tardy record of keeping communal violence under check. While huge crowds braved the hot summer weather, with temperatures sometimes soaring to 42 degrees Celsius, to hear Modi, not many turned out to hear Rahul. Often they walked out during Rahul’s speeches.

India has bought Modi story and is betting on him. Expectations are running high. Does he have the magic lamp, which he unearthed in Gujarat, that will allow him to create a shining, shimmering, splendid whole new world for the entirety of India?

An Election of Epic Proportions

Two out of three, from a total of 814 million eligible voters, cast their votes. A total of 101 million new voters were registered since the last general elections in 2009. Over 1,600 political parties sweated it out under relentless media scrutiny for the 543 seats. The Election Commission of India constitutionally becomes the most powerful institution when the Election Process kicks in to conduct the elections. As an example the new appointment of Army Chief needed a nod from the Election Commission before his appointment could be confirmed.

The Election Commission deployed 8 million Election Workers in 935,000 polling stations. There were 1.8 million Electronic Voting Machines deployed. A million people were engaged in the counting activity and half a million security personnel deployed to ensure hassle-free counting. The entire process took five weeks.

See also:

The Taming of the Shrew Econintersect

Banker showdown: Bernanke tells off India’s Rajan: Washington DC, CNBC

Rebuttal for Rajan: Bernanke Defends U.S. Policy : Mumbai Wall Street Journal

I decide monetary policy, government can fire me if it wanted: Raghuram Rajan : The Economic Times

Fisher equation: Wiki

RBI’s best tool to control inflation is interest rate: Raghuram Rajan

Raising interest rates is a poor tool to fight inflation: Financial Times

Modeling a Multisectoral Economy: Steve Keen: Econintersect

Modern Monetary Theory: Warren Mosler

Rajan has failed, will have to go, says Swamy: The Hindu

Subramanian Swamy: Samuelson – A genius who was my guru: Business Standard

Firm Foreign Policy not run by random default events

US: Obama administration has welcomed the new Government. There is an urgent need to put interactions on proactive path rather than muddling through especially after the Nanny gate episode which generated too much acrimony . Some serious rethinking has to be done on both sides as to why the episode occurred and why both sides acted immaturely.

Nothing much has changed since RIC and The New Silk Road was written in 2011.

Continuity has to be maintained and there is no reason to believe that there will be any fundamental change though there might be change of emphasis.

Relations with China and Japan are expected to improve.

Pakistan continues to be a flash point. He is expected to talk over the Pakistani’s ISI and reach out to the civil society led by Nawaz Sherif.

Concluding Remarks

Given the enormity of the complex task, uncertain economic environment, an impatient electorate with unrealistic time frame expectations, it is going to be uphill journey under a garrulous media. We are absolutely sure that Team Modi will give India more than their 100 percent and will work as best as they can. In his victory speech in Vadodara, workaholic Modi has thanked the nation and said that he will dedicate every moment of his life to 1.25 billion Indians. He reached out to opposition parties saying, “there are no rivals in politics only competitors “. His mantra post election is:”Sab ka sath, sab ka vikas” which translates to “Everyone’s support, everyone’s progress“.

India’s spectacular mandate has bet on Modi’s magic lamp to whisk it away from the present stagnation, despondency, paralysis and loss of national pride. The country has waited patiently for 60 years; an additional 60 months, hopefully should not that big a deal.

India is celebrating. After it settles down, it look forward expectantly though somewhat anxiously to ‘A Whole New World‘. [BJP 2014 Election Manifesto] .

Wishing Godspeed to Team Modi.

Few afterwords

The Election Process is sometimes a source of wonder to many outsiders. In the words of US States Department Spokes Person:

“We congratulate the people of India on their participation in the largest-ever free and fair democratic election in human history,” she said, hours after a record number of Indian voters concluded casting their votes in the nine-phase Lok Sabha elections. These elections are an inspiring example of the power of the democratic process in action, and the United States, like so many others around the world, has great admiration and respect for the vibrancy, diversity and resilience of India’s democracy.” – Times Now TV

To Indians the election process, though serious business, is a festive celebration of renewed optimism, new hopes and aspirations. There were dances, there were God-men, villains and the inevitable riotously funny spoofs on politicians. Indian news channels regaled in tripping politicians and making mince meat of them on numerous live debates. The 2014 Election Jamboree is over and India settles down to its humdrum activities.

“This is indeed India! The land of dreams and romance, of fabulous wealth and fabulous poverty, of splendor and rags, of palaces and hovels, of famine and pestilence, of genii and giants and Aladdin lamps, of tigers and elephants, the cobra and the jungle, the country of a hundred nations and a hundred tongues, of a thousand religions and two million gods, cradle of the human race, birthplace of human speech, mother of history, grandmother of legend, great-grandmother of tradition, whose yesterdays bear date with the mouldering antiquities of the rest of the nations-the one sole country under the sun that is endowed with an imperishable interest for alien prince and alien peasant, for lettered and ignorant, wise and fool, rich and poor, bond and free, the one land that all men desire to see, and having seen once, by even a glimpse, would not give that glimpse for the shows of all the rest of the globe combined……” – Mark Twain in Following the Equator Part 4 CHAPTER XXXVIII

To a casual observer nothing seems to have changed… India continues to be a land where poor and rich coexist , perhaps an exotic country to visit and a land of incredible diversity. To many extents they are right….and in some ways they are way of the mark.

BJP’s election symbol is Lotus. Goddess Saraswati is often depicted holding a white Lotus . She symbolizes cosmic knowledge, creativity, education, enlightenment and music. She is known in Burmese as Thurathadi, in Chinese as Biàncáitiān, in Japanese as Benzaiten and in Thai as Surasawadee. The other Goddess Laxmi is often depicted standing on a red Lotus. Laxmi is Goddess of material and spiritual wealth as well as fortune.

Modi has been elected from Varanasi, arguably a 5000 years old city. Legend says that Varanasi was founded by Lord Shiva, who is the God of creative destruction, transformation and a patron of Yoga and arts. Is it a coincidence or an omen, that a humble tea vendor from “OBC, backward class” has replaced Manmohan Singh, a Ph D. in Economics, as India’s Prime Minister?

Where will India be in 2025 compared to Mark Twain’s India of the 1800s? Prediction is very risky business. Three links provide long term view of India by non-Indian commentators: