Pulwama May Have Given Modi An Edge In Urban Areas, But Not Necessarily Rural: Ruchir Sharma

Prime Minister Narendra Modi (Chip Somodevilla/GettyImages) 
  • This election will be too close to call though the momentum has shifted in the favour of Narendra Modi post Pulwama.

    It may well be that this issue is being amplified in the urban areas and may not be such a major issue in the rural areas.

Ruchir Sharma, whose day job is that of a global investor, moonlights as one of India’s most observant political pundits. For the last quarter century, Sharma and a group of avid election watchers, has been traipsing around the election-bound areas of India trying to figure out what the average voter is thinking, and how he will be voting. In an interaction with Swarajya Editorial Director R Jagannathan, he says that in 26 out of the 27 elections he was watched from close quarters, his group has got the trend right, if not the final seat-count. Sharma has documented his experiences of politics and politicians in a new book, Democracy on The Road: A 25-year Journey Through India. The following are excerpts from a 45-minute interview both about the book and Sharma’ observations outside it:

There is a disconnect between the economic performance of government and electoral outcomes. Why?

There is at least no straight connection. In this context, I had a very interesting conversation with a politician in Karnataka, U T Khader, who had something more insightful to say than some of the biggest politicians. He said that winning an election is like passing a series of exams with a passing grade of 35 per cent in each. He did not tell us which exams he was referring to, but if I were to guess, my list would start with caste and religion, followed by things like welfarism, how much money you are spending, what the perception of corruption is, what your family connections are and, then, finally, development. So, development is just one of the factors that determines the outcome.


For me the classic example is Nitish Kumar. He has engineered – arguably – the biggest transformation in any state. Under him, Bihar saw its average income come quadruple between 2005 and 2015, when he won his last election. Despite his development success, he could not have won without his allies, the RJD (Rashtriya Janata Dal), because his caste base of Kurmis is just 4 per cent of the population. His opponents, including the Yadavs, have a much larger base.

So that is the fascinating part of Indian politics. That you can’t win an election based only on development, but if you don’t do development you can pay a price, as Lalu eventually did in Bihar. Winning an election banking only on development is tough, for it is only one of the tests you have to pass. Even caste is not a sufficient condition on its own, but if you get caste equations wrong then you have no hope in hell.

Is this why pollsters get it so wrong on election predictions?


In the US, by polling 2,000 people you get a sense of what the voter is thinking, but in India you can poll 200,000 and still be way off the mark. This is because India is both much more populous and more heterogeneous than other countries.

Another reason is rampant lying. People prize the vote as a tool to bring down the high and mighty. Show up in a village wearing a shirt and pants, and people think yeh sarkari aadmi aa gaya. (This is some guy representing government). So, they will say they are voting for the (party in) government, just to avoid trouble. That’s why Indian pollsters started using ballot boxes to collect opinions in secret, but that is a very expensive technique to deploy.

Do people conceal their preferences more in India?


Exactly, there is concealment, and the heterogeneity is such that a 2 to 3 per cent swing can decide a contest. In a state like Uttar Pradesh, whenever there is a four-cornered contest, this small swing can make outcomes very different.

But why do journalists get it so wrong? They talk to many people…

Can I make one proud statement about our group?


At the end of every trip we hold an informal forecasting contest. I won’t tell you who among us has won most often. But together, we have gotten the direction of the vote right in 26 out of the 27 campaigns we have covered. There is collective intelligence when we go out as a group, in part because we talk to more people than any one writer can.

Coming to the big leaders, in your book you don’t seem to have thought much of Vajpayee, but you had great hopes of Manmohan Singh in 2004…

Manmohan Singh for me was such a big disappointment, which I have documented in the book. Even his first statement, when I called to congratulate him, he said “Please pray for me.” Now, when I think of it, when you have an attitude like that, then it is trouble.


In my previous book, I quoted the American essayist Ralph Waldo Emerson, who said that in the end, “Every hero becomes a bore.” The Manmohan Singh we saw in 1991-93 was not the same by 2004, or even in 1995-96, in the second half of his term as finance minister.

Was the reformer of 1991-92 the true Singh, or was he pushing big ticket reforms because he had no option? In India, people reform only when their backs are against the wall. I remember a former finance secretary telling me that the biggest mistake we made was to repay the IMF loan early in 1993. After that, we could no longer justify doing lots of reforms by saying we have to do it, the IMF demands it.

Will greater federalism give an impetus to reform? Why is more devolution of power to states not happening even though state parties can theoretically call the shots to change the constitution sometimes?


To get anything dramatic done at the Centre is very difficult. To me this is the inherent contradiction of the ideological Right. The BJP (Bharatiya Janata Party) as a right-of-centre party should believe in minimum government and also in more power to the states. In the US, the Republican party likes more power devolution and free markets rather than a centralised bureaucracy. In India, the nationalistic centralisation model is antithetical to devolving more power.

Is BJP really a right-of-centre party?

The fundamental DNA of (all) our leaders is statist and socialist. That is a fact of life. So, I have given up on any big bang reform happening from a free market standpoint, the kind of deep down economic freedom that we want for the people of India. That dream has long been extinguished for me. At best you will get incremental reform at the Centre, and at the state level more development focus. In New York, we find that more and more state Chief Ministers show up to pitch their states. This would not happen 20-30 years ago. So, the process (of more state-driven change) is there, but the risk is that we are going to see more competitive populism over the next few years.


Indians seem to love the state, yet are deeply suspicious of it, given how the system behaves with ordinary citizens.

The reason is they are looking for some mai-baap to help them with their daily stuff, but they are constantly disappointed by it. The word ‘anti-incumbency’ was popularised, if not coined, in India and if you google it, most of the hits come from India. It rings odd to my editors in America, where incumbency is a big advantage. Most Indian citizens are barely getting by, and they are asking for more from the state since they want their daily life to improve. But the state is broken, and can’t deliver much, and that is the source of anti-incumbency in India.

We still like the idea of a strong leader, but when we get one, we don’t like it.


That’s so typically Indian. You root for the underdog, but when he becomes a strong leader, things change. You will notice that the moment a leader comes to power the person’s attitude changes. I think it has to do with the culture of sycophancy where you have a thousand people prostrating before you, wanting something out of you. So, a leader’s attitude completely changes. I don’t know of any leader who has been able to keep his head on straight after coming to power.

Take Rahul Gandhi. In 2009, he does well in Uttar Pradesh and people think it is because of him. In 2010 we had this encounter with him in Bihar and he refused to even acknowledge us. After the victory, he was aloof and floating. But that’s how leaders become after they come to power and the longer they are in power the more it goes to their head. Now Rahul tells us that the 2014 defeat was the best thing that happened to him.

Somewhere deep down, I think people sense this with leaders in power. They behave sycophantically, but deep down they also want that person to be cut down to size.


Isn’t this true of all leaders everywhere? That they get cut off from the world around them?

It is much more here because of the culture of sycophancy and the numbers involved. Leaders live in their own bubble, and some don’t even want to engage. What was true of the Congress during Indira Gandhi’s time may be true of some of the top BJP leaders today, since they have made up their minds that the media is against them. In the US, Donald Trump is openly hostile to the media, but in private he is desperate for New York Times coverage and willing to give them interviews. The difference in the attitude of politicians between India and US is fascinating in this regard.

You say in your book that what is a big issue for Delhi is not so once you move to Lucknow. This includes attitudes to corruption. Is Rafale, for example, a big deal in the states?


It depends on how big it becomes. Bofors became a national issue, but India has become more local and regional compared to 1989. So Rafale is less likely to become a big national issue. But the impression one gets in India is that even if corruption is not an issue, the longer a leader stays in power the more the belief that he must have made some money in the process, even if it isn’t true.

When we saw Ashok Gehlot’s campaign in 2013, people like us thought corruption would not be a big issue for him, but there was some talk about it. This is partly because election funding is private, so there is some assumption that some of the stuff you (raised for the party) would have been kept in your pocket.

So, is corruption a lost cause? Is it overrated as an election issue or underrated?


Over time, the impression sets in that if you are the incumbent, you would have done something wrong. The opposition is always right to rake it up because of such voter cynicism.

Is the first-past-the-post system a cause for block voting by caste and community members?

No, castes would vote in blocks under any system, but the single round system does make popular majorities unattainable. One statistic which my foreign friends find difficult to digest, and even some in India, is this: no government in India has ever won more than 50 per cent of the vote at the national level. Even the Congress, when it was the hegemon, never won that.


Is that why political corruption is so endemic? Where you need to woo smaller groups to come to power?

No, I think corruption has two other basic reasons. One is that you have to raise all the money on your own (to finance elections). Still, I am not sure in India even if you give public funding you will see a reduction. Secondly, the lower the per capita income, the more the corruption in a country. And vice versa.

Does this mean we need to become a middle- income country to become less corrupt?


Yes, I think so. But the other problem in India is the size of the state. If the size is so big and so intrusive you are bound to be that way. One thing I find very sad, and I mention it in the book, is that not a single business leader in the country has the guts to tell the finance minister to his face the true state of affairs.

Coming to the high-growth period of the UPA (United Progressive Alliance)? Did their policies have anything to do with it?

Nothing. That was a pure global boom which lifted all boats. I am very clear on that.


About the current low inflation under NDA (National Democratic Alliance), is it to do with only cheap oil?

No, I’d say that moving to an inflation targeting regime has helped.

But has the Monetary Policy Committee done anything much to warrant that compliment?


The biggest factor is that globally inflation is a non-issue in 99 per cent of the countries.

Are you a fan of coalition governments? Do they perform better than single-party governments?

I think coalitions are a reality of India – and the reality of any country with diversity. In the past, even in 1984, the opposition has been divided, and if there is a wave somewhere you can end up getting a single party government. But coalition is a reality, and a reflection of our heterogeneity.


As for economic outcomes, there is no direct correlation between coalitions and performance. You can argue that growth was higher under some coalition, but it may have been an accident.

The link between politics and economics in India is weak. There was a period between 2005 and 2010, with the rise of the so-called development stars (in some states), but as I argue in the book, that was a very special period when you had unusual circumstances. You had very high economic growth, low inflation and very high welfarism. The revenue intake was so great that all states had money to spend.

Shivraj Chauhan (in Madhya Pradesh) did a lot to improve his state but he also launched so many schemes because the revenues were so good.


At the centre, the UPA was fundamentally a spendthrift government, but the revenue intake was so huge that they almost couldn’t keep pace. Growth kept surprising them on the upside. And so they kept spending.

And then they grew on steroids, the (post-Lehman) fiscal stimulus…

They tried to buck the trend when the rest of global economy was slowing down. That is something we forget. Despite all the reform credentials of Manmohan Singh, he was in some ways a dyed-in-the-wool Keynesian. He generally believed in stimulus spending. Sonia was generally about welfare schemes – it was a steady trend to provide as much welfare as possible. But Manmohan Singh provided a massive fiscal boost in 2009 as a reaction to the recession. In India, the mistake is once you start spending, you can never stop unless you have a crisis.


Is there a correlation between democracy and growth, as Daron Acemoglu and James Robinson suggest in their book Why Nations Fail?

When it comes to authoritarian regimes and democracies, in terms of economic growth, the outcomes are identical. The important differentiator is that under democratic regimes volatility of growth is much lower; under authoritarian regimes outcomes more extreme. If you have the right leaders, like in China or South Korea, at the right time, or Lee Kuan Yew in Singapore, you do really well but you also get leaders with the wrong authoritarian policies, dictators who took their countries down the tubes. The range of outcomes with authoritarian regimes is very large; the range of outcomes in democratic regimes is much smaller.

So, no particular high marks for democracy?


Not in the short term. But countries that pine for a strong man to be their economic saviour should beware, because in the long run stable growth is more likely in a democratic regime. Stable autocracies are the exception.

Is there a disconnect between what Delhi thinks and what rest of India thinks? In politics and economics.

Yes, at so many levels. This is fascinating. Look at a small thing. During our 2017 UP election trip, a band of smog was choking north India, and as we left Delhi the discussion was all about pollution and how many air purifiers to get. Once we had travelled across UP to Varanasi, or even 100 kilometres away, the smog was still there but no voter mentioned it. When you are trying to get by daily, a concern like pollution is too exotic for you. On an issue like pollution, the constituency is in Delhi and Bombay or (maybe) Bangalore. Any rational politician will thus not see it as an issue elsewhere.


How important is caste as an issue in this time and age?

Among my urban friends, who think they are more Indian, they have no understanding of how deep caste runs. They treat any discussion of caste as being politically incorrect. If I ask them are you a Brahmin, they would be offended. But two-thirds of India lives outside urban areas and for them this is part of the DNA. Once again there is this disconnect.

Is the incidence of caste reducing?


I don’t think so.

Then are caste loyalties solidifying?

In the final chapter on my return to Bijnor, I asked whether the 100 million new voters entering the picture would think differently, do things differently. My answer is absolutely not, they are still thinking in caste and community terms and there is a fundamental reason for this. They know that no politician is going to change their lives fundamentally, so you might as well be loyal to your own grouping so that you get some protection.


In Bijnor, I met the superintendent of the jail. And the District Magistrate. They were Brahmins. We asked them about this. The jail superintendent had a very interesting response. He said when Akhilesh Yadav was in power these posts were dominated by Yadavs and Muslims. We were in the boondocks then; now it is our time to govern. It’s so matter-of-fact.

So, the tide of fortune changes and when you are up, be up. Most voters think politicians can’t change your life fundamentally so be opportunist and be more protected. People talk that way.

What do you think of Priyanka Gandhi’s entry into politics? You seem to think she will make a difference to the Congress…


Unfortunately, what happened was a headline in a newspaper that excerpted from my book. What I meant to say was that compared to Rahul, she appeared to be the one. She is much more charming and charismatic politically. I don’t think she makes a difference to this election. India has changed (too much) for just charisma to work. And you don’t have a base on which it can raise prospects; you don’t have that in UP. What she can do is stir the pot, like stand against Modi in Varanasi, if you become the combined opposition candidate. Otherwise she has to work for the long haul. Rahul also had to be there for the long haul and today at least some people take him more seriously than they did in 2004. Same thing has to happen here. So, it is one thing to complement someone and have flair and charisma, quite another to think you are going to be a game changer.

You have seen 27 elections. When does voter mood crystallise?

People reveal their preferences more towards the end of a campaign. If you go too early, people are not that passionate or activated. But closer to the voting date, the passions begin to simmer, they come to the surface. More rallies, more posters, more loud-speakers. Going to observe an election closer to the polling date allows you to capture the momentum. I am not sure voters make up their minds at the last minute, but they are more likely to reveal their preferences much closer to the polling date.


How do you get to meet swing voters, who may decide an election?

That is an easy poll you can do. Forget voters who have liked or never liked Modi from day one. Find those who say last time I voted for Modi but I don’t think the government delivered, so I am voting different now. Or those who say I like what the BJP and Modi are doing, and now I am going to vote for him though I had reservations the last time. Check what that number is. That will tell you which way the trend is going.

Typically, this swing vote is 10 out of 100.


But do people clearly reveal their minds when you ask?

Questioning voters is an art. Make clear you are not a government official, phrase the question indirectly. A good way may be to ask, hawa kis taraf chal rahi hai? (which way is the wind blowing?) The party they name as the likely winner is very likely to be the one they plan to vote for.

When will we know who will win (in 2019)?


For the past year, my thinking has been that this election will be too close to call. However, I do think that momentum has shifted in the favour of Modi and the BJP following the terror attack in Pulwama and the rise in tensions against Pakistan. In such situations, anywhere in the world, the tendency of the public is to rally around the government.

Still, it may well be that this issue is being amplified in the urban areas and may not be such a major issue in the rural areas. That’s why I can’t wait to go on our 28th election trip to get a better feel for what’s really on the voter’s mind. I hope to do be back on the road in early May and report back then.

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