The poor electoral performance of the BJP in the Shahjehanpur by-elections has triggered a certain degree of "nervousness" in the BJP leadership which believes that the Uttar Pradesh Assembly elections to be held within a year would have a signficant bearing on the Centre's politics.
But significantly, Uttar Pradesh Chief Minister Rajnath Singh's concern is primarily economics rather than politics.In his latest presentation at the Planning Commission which grudgingly approved a core plan of Rs 8,400 crores for the state, Singh was hard put to explain the "dismal economic performance" of the state. Obviously, the Commission was receptive to the suggestion that Singh was not expected to do "miracles during his six month rule".
But it certainly drew his attention towards the ranking of Uttar Pradesh below Bihar in terms of human development index (HDI).
Reforms in the power sector have made little impact in Uttar Pradesh. The data presented to the Commission reveal that transmission and distribution losses have increased from 25.53 per cent to 42.17 per cent. "Obviously, this shows that the reforms had a negative impact on power sector" said a senior member of the Planning Commission.
What drew the attention of the Commission was the unrealistic projections about performance of the State Electricity Board (SEB) and public state enterprises (PSEs) in the state. Documents submitted by the state government had promised that the PSEs would make a profit of Rs 145.65 crore.
At the end of the year, the PSEs however incurred a loss of Rs 528 crore. Similarly, the SEB was projected to have earned Rs 216.13 crore as profit, but its losses mounted to Rs 550.60 crore.
Of course, the state road transport corporation had shown marginal profit against the expectation of incurring losses. The Commission also drew attention of the government towards falling credit-deposit ratio in the state - which indicates flight of capital from the state.
Even the state government's own presentation showed that development and non-development expenditure ratio had fallen from 75:25 in 1986-87 to 59:41 in 1998-99. The gravity of the situation could be assessed from the fact that the state which had revenue surpluses of Rs 252 crore in 1987-88 is now having a revenue deficit of Rs 7253 crore (which is 28 per cent of revenue expenditure).
The other indices also present an alarming picture of the state's backwardness. The gap between per capita state and national income has increased from 3 per cent in 1950-51 to 38 per cent 1999-2000.
Similarly, the gap between per capital plan expenditure of the state and all India has increased from Rs 13 in the first plan to Rs 5,637 in the ninth plan.
In this backdrop, the humilating defeat of the BJP (the party's candidate forefeited his deposit) in Shahjehanpur is believed to have driven home the message effectively that bad economics would result in bad politics for the BJP.
Official sources admit that populist measures by the government are not taking off because of the resource crunch.
Sources close to the Chief Minister, however, are confident the state government would overcome the crisis and ride back a popularity wave during the elections.
They admit that the state government, by refusing to issue a fresh notification on the Babri Mosque demolition case, expects to fall back upon the "charisma of Lord Ram" instead of setting its own house in order.
