A few hours before the start of the new year, Prime Minister Modi addressed the nation, in perhaps one of the most awaited speeches of 2016. The speech was received with great disappointment by those expecting big bang reforms, but as in many cases, it was what was not said that remained the bone of contention. I discuss my interpretation of what was said, and more importantly what was implied given the political context.
To summarise what was directly said, the PM announced his intention to provide rebate on interest to farmers and urban poor through existing schemes; increase the credit guarantee given by the government to small business from one crore to two crore; give fixed interest at 8% to senior citizens for a period of 10 years if their minimum bank deposit is ₹7,50,000; provide direct benefit of ₹6000 to a pregnant woman to help with delivery and care; and discuss a system where the central and state elections can take place simultaneously.
Whilst the speech was relatively straightforward, the tone and intent have kicked up a silent political storm amongst analysts. One thing is certain, Modi does what he says, and does not let being perceived as an autocratic leader come in his way. That is precisely why the discussion on simultaneous state and central elections, hinting towards a presidential form of government has caused a storm. This implies his willingness to change the electoral system towards one that suits a popular leader, in the backdrop of all his current political rivals having lost credibility or lacking nationwide recognition and his presidential style campaign in 2014. It appears that he is determined to play with the system to retain power.
The tone of his speech had a certain degree of sobriety, where he stopped short of demanding any further support from the people, though he hailed them for their support as if they had an option. The tone was that of a leader who had seen his bold move backfire, his support fade and his electoral prospects diminish just in time for the critical UP elections. Since the PM’s majority is still confined to the Lok Sabha, he would need to either win the UP assembly polls or have a tacit alliance with the victors to be hopeful of attaining even a slim majority in the Rajya Sabha. The public opinion after the demonetisation move, the anti-Muslim agenda of the BJP, the failure of the BJP to make significant inroads in UP, and the internal dynamics of the Yadav clan shifts the probability of victory towards the Yadav-led Samajwadi Party.
Elsewhere in the nation, the JD(U) and NCP have thrown their support for PM Modi, for the demonetisation move and other decisions. It shows their inclination to support the PM on decisions that benefit their agenda. The AIADMK stalwart who was known for her pro-people policies has been replaced by a not so independent or popular leader, which brings into question whether the party retains the ability to take independent decisions or will be guided by the Centre. The Congress is still struggling to make unpopular senior members of the party retire, under whose watch corruption scandals broke out and whose popularity is premised on their proximity to Mrs Gandhi. The state leaders of most rival parties are facing some sort of misappropriation charge, and have government institutions determining their political flexibility.
The environment, given these recent political changes, is ripe for the PM to take control and make electoral changes that ensure his re-election whilst rival parties are weak and malleable. The insinuation, from the Prime Minister’s speech on New Year’s eve, is hard to miss, given the political context. But the interesting question is whether the SP is ready for a backdoor alliance with PM Modi. The past few months have seen a dramatic shift in the stance of the PM and that of the BJP, fuelling the divide which had once brought the PM to power in 2014. The decision to demonetise has without a doubt raised silent concerns within the BJP, whose traditional Baniya image has suffered a major blow. The key question here is whether the blow will alienate the BJP from the PM and whether this will be beneficial for the PM.
The next few days will be marked with critical backdoor negotiations between parties, aimed at securing electoral equations in their favour. However, what is clear from the underlying tone is that the PM has given in the towel for the BJP, whilst taking a step towards a presidential system where the BJP top brass will arguably become redundant.