Divided we reform

Beating The Street

The results of the first round of state elections suggest that the opinion pollsters completely misread trends "" in Chattisgarh and Rajasthan, at least.

While MP and Delhi saw results more or less as predicted, the BJP won a comfortable verdict in Rajasthan and Chattisgarh where opinion pollsters said that both states would be close with the Congress probably holding an edge. Even exit pollsters failed to gauge the strength of the BJP wave.

Does this mean the BJP will contemplate going it alone, dumping its NDA allies?

This rumour is now doing the rounds in Delhi and nothing in politics is impossible. I hope it doesn't happen or, if it does, the BJP fails to win a majority in the 2004 LS and is thus forced into a coalition with several partners afterwards.

This is not because I am anti-BJP, as such "" I am pro-coalition and the more unstable, the better! There is simply too much evidence suggesting that governments with secure majorities don't implement reforms.

That was certainly true for Narasimha Rao "" nothing happened after 1994 when Ajit Singh's crossover guaranteed the government would last the full term.

Even the NDA's track record suggests that it pushed through the greater part of its reform agenda while it was acting as a caretaker during 1999.

A government with a comfortable majority is a secure government. The ruling party believes that it will get five years to enjoy the privileges of power and milk the system.

Since reform consists of giving up some of those privileges, there is always extreme reluctance to implement it in circumstances of security.

Consider on the other hand, a coalition where the rulers are permanently insecure. There is always the fear that the government could collapse and be forced into another election.

This induces a reform-oriented mentality. The rulers in a coalition are always more willing to price the net present value of their privileges and sell them off; in other words implement reforms.

After all, who knows how long their positions of power will last? If they do implement reform, they create a warchest from the proceeds to fight the next elections. What's more, in the worst case, if they lose the next elections, then they have denied those privileges to their successors.

An early general election followed by another unstable coalition would, in my opinion, be the perfect recipe for rapid growth. There is unlikely to be any further reform until the next LS settles down.

The 2004-05 Budget is bound to be populist due to electoral considerations. But there are a whole pile of subsidies and assorted reforms, which aren't budget-dependent. The sooner the next government comes in, the sooner those issues would be addressed.

One lesson every electoral faction should draw from these elections. Good governance is more of an issue than it has ever been in the past.

It won't be enough to simply rely on caste/vote-bank based alliances "" after 12 years of exposure to better infrastructure and more consumer goods, everybody wants these.

Most voters would undoubtedly prefer governance from members of their respective communities. But if it isn't good governance, they'll vote them out.