India may increase federal financing for some states

Subject India's redistribution of federal resources. Significance At the general election likely in April or May, the nationally ruling Bharatiya Janata Party (BJP) and the main opposition Congress party will be seeking the support of state-based parties to bolster their alliances. Unequal patterns of regional development are prompting some states to seek a greater share of federal resources, but ‘special category status’ for disadvantaged states has effectively been abolished. Impacts Personal campaigning by Prime Minister Narendra Modi could improve the BJP’s chances of winning votes in states where it is unpopular. Congress will claim that Modi’s government has failed to deliver on economic development, hoping to increase its support. No post-election government will likely consider creating new states.

Subject Controversy over the 15th Finance Commission. Significance Finance ministers of three southern states met last month to discuss grievances over the central government’s 15th Finance Commission, which defines revenue redistribution across the federal union. Prime Minister Narendra Modi champions the notion of ‘cooperative federalism’, with central and state governments to share responsibility for economic development. As the 2019 general election approaches, political opponents of Modi’s Bharatiya Janata Party (BJP) are contemplating the formation of a ‘Federal Front’. Impacts The BJP will step up efforts to undermine Karnataka’s new Janata Dal (Secular)-Congress ruling coalition. While Congress may join a Federal Front, other parties will resist its attempts to assert leadership of the alliance. Modi will prioritise personal campaigning in southern India ahead of the 2019 election, hoping to win over critics.


Subject India's ruling party's likely election strategy emphasising caste. Significance Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) was last week displaced from government in three of its heartland states by the main opposition Congress party, following elections. The poll results suggest a loss of support for the BJP among rural voters and Dalits (formerly regarded as ‘untouchables’). Ahead of the general election likely in April or May, party President Amit Shah is overseeing the BJP’s strategy. Impacts The BJP will highlight India’s robust quarterly GDP growth figures, claiming good economic management besides engaging in identity politics. Opposition parties could highlight the plight of Dalits working as manual scavengers as part of their election campaigns. Shah will likely be a future prime ministerial candidate for the BJP.


Significance Each of these states except Punjab has a government led by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP). Punjab is one of just three states with a chief minister that belongs to India’s main opposition Congress party. Impacts A poor showing by Congress would further reduce its leverage with other opposition parties in talks over forming a broad anti-Modi alliance. Victory in UP would enhance Chief Minister Yogi Adityanath’s national profile. Election campaigning will likely lead to a spike in COVID-19 cases.


Significance Party President Rahul Gandhi’s Congress displaced the Bharatiya Janata Party (BJP) from power in Chhattisgarh, Madhya Pradesh and Rajasthan, all in the nationally ruling party’s ‘Hindu-Hindi’ heartland and with large rural constituencies. In recent months, opposition parties including Congress have been in talks about possibly forming a broad anti-BJP front to challenge Modi in the general election, likely in April or May next year. Impacts More farmer-led protests are likely ahead of the general election. Outbreaks of Hindu-Muslim violence are likely, especially in the north and west. Modi’s government will press the Reserve Bank of India to release more reserves and cut rates, hoping to boost growth.


Subject The likely strategy of the BJP's opponents. Significance The opposition to Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) lacks a coherent strategy at national level ahead of elections due in 2019. However, the large turnout at a public rally in Patna late last month, where Lalu Prasad Yadav brought together representatives of 18 opposition parties, suggests that there is popular support for a challenge to the BJP. Impacts States in which elections are due are more likely to see outbreaks of communal violence. Sonia Gandhi will come under increasing pressure to relinquish leadership of the Congress party. The BJP may support the creation of a separate Gorkhaland, at the risk of alienating support in the rest of West Bengal.


Significance As the 2019 general election approaches, Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) is trying to secure the backing of India’s rural population, which is some two-thirds of the country’s total. Modi has encouraged state governments to waive farm debt worth up to 2.8 trillion rupees (39 billion dollars); suggested a procurement formula guaranteeing farmers a return of at least 1.5 times their costs of production; and promised to double farm incomes by 2022. Meanwhile, landowning castes are increasingly demanding opportunities in education and employment away from rural areas. Impacts State governments will try to pay off farm debts by issuing bonds. In election campaigning, opposition parties will claim to champion rural interests. An average 2018 monsoon should boost agricultural output.


Significance Both states currently have chief ministers from Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP). India’s main opposition Congress party and regional players are aiming to wrest power from them. Impacts In some parts of Maharashtra, there will likely be outbreaks of agrarian protest in the final stages of campaigning. Smaller parties could win more seats than Congress in the Haryana poll. Parties winning fewer votes in the elections will probably claim impropriety relating to electronic voting machines.


Significance The National Democratic Alliance (NDA), led by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP), is aiming to retain a parliamentary majority. The United Progressive Alliance (UPA), led by the main opposition Congress party, and several unaligned parties are looking to come to power. Impacts The Election Commission will attract criticism over the conduct of the polls from disgruntled parties. A priority for the post-election government will be addressing India’s trading relations with partners in the region and beyond. Tensions with Pakistan could escalate at any time, but the formation of a new government may create an opening for bilateral talks.


Significance The ruling National Democratic Alliance (NDA), led by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP), has retained a parliamentary majority and the BJP has extended its single-party majority. During campaigning, Modi emphasised nationalist themes, ranging from Hindu nationalism to national security, while deflecting criticism over problems such as the country’s jobless growth. Impacts The BJP’s pledge to spend 100 trillion rupees (1.4 trillion dollars) on infrastructure will likely prompt a widening of the fiscal deficit. Leading BJP figures such as party President Amit Shah and Uttar Pradesh Chief Minister Yogi Adityanath may aim to succeed Modi in 2024. Rahul Gandhi will highly likely relinquish leadership of the main opposition Congress party.


Subject Outlook for the Janata Parivar. Significance In mid-April, six leading regional parties merged to form the 'Janata Parivar' (or People's Family, JP) to challenge Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) government. The JP has been provoked, in part, by the way that the BJP is pushing reforms to land acquisition laws despite widespread opposition, and converting its 2014 general election triumph into many regional election victories. Impacts The JP will oppose subsidy cuts and the BJP's Hindu nationalist cultural agenda. The land acquisition amendment may be the most serious casualty of political opposition to Modi. Regional parties will attempt to balance market and welfare interests, highlighting (but not mitigating) rising inequality.


Sign in / Sign up

Export Citation Format

Share Document