Mamata Banerjee and other chief ministers who are opposing the new economic policies of the Manmohan Singh government probably have not read Chapter 3 of the latest book edited by two renowned Indian economists Jagdish Bhagwati and Arvind Panagariya.
In the chapter titled “Economic Reforms and Election Outcomes,†Poonam Gupta and Mr. Panagariya use data analysis from the 2009 national elections to bust a standing myth in India's power corridors â€" that pro-growth economic reforms equals to political suicide.
The myth reached its apogee after the 2004 election results â€" which saw the Bharatiya Janata Party-led coalition, which had loudly advertised its free-market stance, bite the dust along with Andhra Pradesh's chief minister, Chandra Babu Naidu, also a poster boy for reform who had aggressively wooed foreign investors in his state. Most analysts saw the results as a pushback from India's have-nots - the farmers and lower-income groups who were not receiving the promised trickle-down benefits of India's growth and globalization.
But in their haste to find an overarching explanation to an unexpected verdict, these analysts and politicians, including many winners, overlooked some key facts, according to Ms. Gupta and Mr. Panagariya.
First, Indians vote on state-level issues and parties even in the national elections. So the results of the national elections were in effect a sum of several local elections, which renders a generic national explanation tenuous at best. The economists found no decisive, nationwide urban-rural or rich-poor split in votes.
Second, in 2000-03, India's average annual growth rat e had slipped below 5 percent and Mr. Naidu's state was growing at less than 4 percent in 2001-03. While the economy was beginning to bounce back by the end of 2003, the B.J.P.'s high-decibel “India Shining†rhetoric ignored the shaky economic outlook of the day.
The 2004 mandate was not for anti-growth, socialist policies of the past, the economists argue. In fact, it was the opposite: Voters wanted more meaningful, high-growth reforms, not fewer.
The data analysis by Ms. Gupta and Mr. Panagariya strongly supports this hypothesis. They first divided India's states into three categories:Â high-growth, medium-growth and low-growth depending on the state's deviation from the national growth rate. Then they looked at how state ruling party candidates fared in the elections in the different categories.
The results are remarkable because they go right against the conventional wisdom that India's voters still find economic reforms hard to swallow.
In th e reformist high-growth states, 85 percent of the ruling party candidates won their seats, compared to only 52 percent and 40 percent in the medium- and low-growth states respectively. Just take a look at most of the chief ministers who were returned to power by voters in recent times, like Sheila Dixit, Nitish Kumar, Narendra Modi, Bhupinder Singh Hooda, Naveen Patnaik, the ruling coalition in Maharashtra â€" they all delivered growth rates above 9 percent per annum.
The growth laggards â€" Rabri Devi, Mayawati, Vasundhara Raje Scindia, Buddhadeb Bhattacharjee, Virbhadra Singh â€" were booted out. They all failed to effect significant change in their states and delivered growth rates below the national average.
As the authors point out, this correlation between growth rates and election outcomes is a relatively new phenomenon because breakout growth of 8 to 10 percent has been seen in India only recently. So it is not surprising that many of India's old-school c aste and class-based regional leaders are finding it difficult to adjust to the new normal.
In a poor country like India, economic reforms and growth should be common sense in politics. The authors point out that growth benefits lower-income groups much more than the rich. For a poor Indian, 10 percent growth could mean the difference between hunger and subsistence; for the rich, it would merely mean the difference between comfort and more comfort.
So the assumption that the anti-reform politicians seem to be working on is that Indians want to stay poor â€" that they do not want to grow and improve their lives. But as the numbers show, this perverse, feudal brand of politics is being squeezed out of 21st century aspirational India.
To retain their relevance and keep winning elections in a growth-hungry country, Ms. Banerjee and some of her fellow chief ministers should read at least Chapter 3 of “India's Reforms: How They Produced Inclusive Growth.â€
Sambuddha is an independent journalist. He can be reached on Twitter @some_buddha
