Tag Archives: Indian Elections

Is a Congress Party win good for global commerce?

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Now that we know that the Congress have won the general election with a comfortable margin, which allows them to be that little bit more confident in their agenda setting, the question that I’ve been most asked is whether a Congress victory is good for the international business.

If what a business leader most wants is stability, then I believe that the people have delivered a much more stable government than the last, which was run on the whim of the Communist Comrades of West Bengal.

We must also take some comfort in the fact that senior Ministers like Chidambaram and Kamal Nath have made statements that recognise that the reforms process must move forward – whether this is to do with labour reform or increasing FDI in various industry sectors. The latter is what I’d like to examine further.

Its proven that in sectors such as IT, biotech or telecom – which are ‘open’ to foreign equity and participation, we’ve seen huge growth – some commentators estimate around 40% growth year on year. Whereas in ‘closed’ sectors such as retail, legal services or accountancy, you’ve only seen single digit growth. The argument being that the more ‘open’ India becomes, the greater the chances of her becoming more competitive and successful.

Chidambaram has commented on the inadequate level of life insurance cover in India as being “totally pathetic”, and also often stated the need to bring reforms to the banking sector, does this mean that we should expect the reforms required to ensure that the Indian consumer gets more value for their money?

Well, without the Communists holding a gun to their heads, it seems that the Congress Party has a range of options to pursue to take the globalisation agenda forward. The international community expects it, and to be honest, I’m not sure the Indian Government will have any plausible excuses to defer critical economic reforms or on delivering on Doha much longer.

On the eve of Indian elections… new poll research

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Thought you may be interested in the Indian election survey we commissioned.

What it shows:

• So far, the electorate have been treated to a ‘policy-lite’ campaign, with no real debate on substantive issues. Caste and religion remain defining issues in this election.

• Anyone can still make it. It’s all down to the post poll alliances that are struck at the end.

• The Congress & BJP will have an equal share of seats, it’s their coalition allies that will make the essential difference.

• Previous groupings like the UPA (Congress Party + partners) & NDA (BJP + partners) have more or less been disbanded. They remain convenient terms to apply, but mean little in the real sense.

• Regional parties are flexing their muscles by choosing to join together, under banners such as the Third Front or Fourth Front, avoiding grand alliances offered by the Congress or BJP.

Detailed breakdown of projected wins under four main scenarios is here: http://indiabriefingcentre.files.wordpress.com/2009/04/090414-sc-team-cvoter-election-survey2.pdf

Musings from last week…

The Congress withdraw a senior Congress MP over his alleged involvement in the 1984 Sikh riots that occurred after Indira Gandhi was assassinated by her Sikh bodyguards. At a press conference last week, a Sikh journalist threw a shoe at the Home Minister as a sign of protest, which snow-balled into the two MPs withdrawing their candidature and bringing media attention to the Congress Party’s record on communal politics, which was a huge relief for the BJP as this shifted media attention from Varun Gandhi’s “hate speech”, that was being played out in the media in preceding weeks.

Personal attacks from the Congress leadership have intensified. Manmohan Singh (uncharacteristically) and Rahul Gandhi have publically criticised Advani, the BJP’s Prime Ministerial candidate. Excerpts from a press conference below:

“Mr Advani has strength in speech with weakness in action.” – Manmohan Singh on LK Advani

“I would not have been found weeping in the corner, when a mob of hoodlums was destroying the centuries’ old mosque.” – Manmohan Singh on LK Advani when the Babri structure was razed to the ground in 1992.

In obvious reference to the Kandahar plane hijack episode Manmohan Singh said, “The difference between the UPA government and the NDA government is that they released terrorists while we killed nine and captured one alive.”

Referring to Mr Advani’s remarks that he did not know about the release of terrorists and the flight to Kandahar carrying Jaswant Singh, Rahul Gandhi said: “If he is such a strong leader, how come then the home minister did not know something…there are two possibilities. Either he is not telling the truth or his senior leader, Prime Minister Vajpayee, did not trust him”.

Likewise, LK Advani demanded an apology from Sonia Gandhi for her statement that India was in greater danger from people inside than foreign terrorists, which he said was an implied attack on the BJP. Advani said he was shocked about her remarks that “we are in greater danger from people inside than from foreign terrorists entering India”.

He said though Gandhi did not name his party, it “substantially accuses us and the comments were clear”.

On the third front, he said: “The so-called Third and Fourth Fronts were irrelevant as they were opportunists, who had no platform on their own or a common platform. The CPI(M) was trying to cobble a Third Front only to fight its own growing irrelevance.”

IPL in England

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With the BCCI’s decision of shifting the IPL out of India, one would think that the chances of the Congress Party returning to office are diminished as a result of this one decision. Anything other than this is simply not comprehensible for the simple reason that cricket is religion in India. Or so it would seem..

IPL Commissioner – Lalit Modi’s ability to articulate and convey key messages has to be applauded, as I believe he recognised and stemmed any criticism by positioning the general election as being of paramount priority to India and for once, cricket needed to come second! In a land in which cricket is religion and Sachin Tendulkar is God, Lalit Modi’s played his master innings by rolling out personalities like Sachin and Shah Rukh Khan to reinforce his messages as he realises that the last thing he or the IPL wants to be accused of is being ‘anti-national’.

As we’re in an election cycle, It goes without saying that the Opposition is using this opportunity to paint the Congress as being soft on security matters; and the Congress realising that in a country where cricket is taken so seriously, it needed to get its rebuttals in quickly.

So, would the IPL work in England?

There’s no doubt that the ECB, like every other cricketing nation, was green with envy with what they witnessed last year in India. By rolling out the red carpet to the BCCI, the ECB would undoubtedly regain a central role in international cricket, and if it plays its cards well, would suggest that the ‘Indian’ is substituted by ‘International’ in the title of the competition.

With regards to the logic of shifting to England, Sachin was right in saying that whilst the Indian public wouldn’t have the same experience as last time, the larger Indian diaspora living in the UK would come out to support their teams, as they do everytime India tours here.

Even with our unpredictable weather, Easter weekend and May Bank holiday coming in between, I believe that having it here is for the greater good of the game.

India's Obama – The Mayawati Moment? 10 facts about Mayawati

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Indian political observers may accuse me of taking this a tad too far, but on some levels I do believe that this moment may the closest we get to, in seeing the Obama effect in India.

You can say what you like about Indian polity, call it dynastic, corrupt, rigged etc, but the truth is that it’s clung onto its democratic traditions to emerge as a shining beacon in a region of failed democracies.

Sure, India is dwarfed by China in terms of international and strategic importance, but the fact that a lady like Mayawati can emerge from nowhere and become a contender for the highest office in a country is praiseworthy and worthy of celebration.

The US took over 200 years for an Obama to emerge; in India, if Mayawati ends up as PM, we’ll have seen the Obama phenomenon – someone from the oppressed class / caste in office – within 62 years of independence!

The comparison ends there.

So, what do we know about Mayawati?

1. She was born in Delhi to parents from the Dalit caste (previously referred to as untouchables) and went on to pursue a career as a teacher.

2. Her potential was spotted by the founder of the Bahujan Samaj Party (BSP) and from then onwards, she’s never looked back.

3. The BSP, under her direction, have consistently increased their share of votes across India as she’s tried to broaden their base by inducting candidates from other castes and backgrounds.

4. She’s the Chief Minister of India’s most populous state – Uttar Pradesh (UP) and commands a majority, where most other states are dependent on coalitions with other parties. As a result of her dominance in UP (which returns the largest number of MPs to Delhi), she can be sure of winning the lions share of seats there. Commentators predict that if she gets upward of 40 seats, then its for her to decide what happens in Delhi.

5. In 1995, at the tender age of 39, she become one of India’s youngest Chief Ministers and whilst her tenure was short lived, she came to the fore and registered herself as a future contender, which she’s lived up to becoming.

6. As is common in India, she’s ousted hundreds of police officers, civil servants and the like due to their political allegiances lying with her sworn enemy, the previous Chief Minister – Mulayam Singh Yadav from the Samajwadi Party.

7. In a similar vein, she’s the subject of several court cases related to corruption and general goon behaviour.

8. To say she’s a megalomaniac is putting things lightly; her birthday celebrations are huge media events that her foot-soldiers use to ingratiate themselves. Recently, an engineer was killed after he reportedly refused to pay money demanded by one of her tribe for her birthday celebration fund.

9. Its also claimed that in 2007 – 08, she paid more income tax that India’s richest businessman – Mukesh Ambani! Who say’s politics doesn’t pay?

10. In terms of opportunism, all she’s concerned with is obtaining office. She’s thrown her lot with the BJP and the Congress when its suited her, and I suspect we’ll see more of the same this time around.

Apparently, with a focus on bursting onto the national scene, she’s been taking advice on her image, having English tuition, and socialising with Delhi types on a more regular basis!

As I said, I make the assertion that this is India’s Obama moment, but I’m not sure she’s India’s Obama.

Briefing on Indian Elections

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Following from the briefing that we’d organised yesterday evening at the House of Commons on the upcoming Indian elections, our inbox has been swamped with requests for the presentation made by Yashwant Deshmukh – who’s one of India’s top pollsters. Whilst we’re probably more immersed than others in keeping on eye on the machinations of Indian politics, I found the insights provided by the panelists and also some of the audience very logical and agreed with their analysis.

In particular, I felt that Lord Desai, who’s advised several Indian Prime Ministers, and clearly, has the inside track on politics, was exceptional in his comments. Despite the pro-Congress Party perception that people have of him, I felt he was very balanced and gave the Congress as hard a time as the BJP. He narrated a story to me of when he was awarded the Pravasi Bharatiya Sanman Award from Prime Minister Vajpayee and asked why, depite the stinging criticism of the NDA and of the BJP was he being awarded the honour. Vajpayee, in his response, said something to the effect of: “We take heart in the fact that you’re equally critical of the Congress”. 🙂

What Desai explained was that he expected the Congress to make it back and cited examples such as of the confidence that the Congress has shown through the very conservative interim budget a few weeks ago. He said that the lack of throwaway gestures and sops are a clear sign of their thinking. In addition, what I thought was a very personal insight, was his admiration for Sonia Gandhi’s long term strategic thinking – for example, her placement of Naveen Chawla (Chief Election Commissioner) and Pratibha Singh (President) in their current roles to coincide with the probable dates of the election and therefore strengthening her ability to fix the result, if required. I’m lead to believe that such moves are par-for-the-course across the political divide, but are less well thought through or executed.

Yashwant Deshmukh’s clear view was that he forsees a situation in which a minority party like Mayawati’s Bahujan Samaj Party could stake their claim to high office with the support of either principal party. What was interesting was that he termed the upcoming election as a ‘semi-final’ for the main event in 2012, in which he expects the contest to be between Rahul Gandhi and Narendra Modi.

I’ve placed his presentation for on our company website for you to download – www.saffronchase.com – let me have your views. Do you agree with his analysis?

The really interesting thing about the event was that apart from the panelists, there were several individuals in the audience who have been offered seats in the Indian parliament, or are involved in politics in India but make London their base. Such as, a past Mumbai region Organising Secretary for the NSUI; which is the Congress affiliated student body; a eminent businessperson who is regularly consulted by the Samajwadi Party and the Congress on various issues; a business magnate who’s been offered a party position in Delhi, a lawyer with equations with the gen-next of Indian politics etc etc.

In summary, all panelists agreed that in the next election, we’re going to see an overwhelming influence by regional parties, which may result in a minority government that is kept alive with the support of the Congress and will fall within two years.

On the foreign direct investment / commerce front, what was was clear was that there would be no rolling back of policy decisions, but you couldn’t guarantee the fast-tracking of initiatives such as the lifting of the caps in the financial services, retail sector and others. All agreed that they saw such decisions at a standstill for the next few years.

We’re organising a visit for those interested to India at election time to soak up some of the atmosphere by attending mammoth rallies (100,000 people minimum), and to see for ourselves the key issues that candidates face in their constituencies. We received great interest from the audience, please let me know if you’re interested in joining our delegation. We hope to take some UK parliamentarians, businesses, journalists and others to witness the largest democratic exercise conducted on the face of this planet.

Who's going to be the next Indian PM?

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With India on the verge of general elections, I thought it may be useful to look into my crystal ball to find out who may become India’s next Prime Minister. In most democracies, elections come down to a couple of major political parties, but, as with everything in India, it’s not as straight forward as that (what a surprise!).

As a result of coalition politics firmly embedded in India, we not only have to keep our eyes on the national parties, but also on regional outfits that can return spectacularly low numbers of MPs to New Delhi but hold the sway of power.

So, who’re the main contenders:

SONIA GANDHI / MANMOHAN SINGH / RAHUL GANDHI
Representing the grand old party of India, the current Prime Minister – Dr Singh – has just had heart by-pass surgery – but hopes lead the next election campaign, seems unlikely to me. There are two other options for the Congress – ‘Madam Sonia’, or her son – Rahul Gandhi – who’s an unknown & untested entity, but given the Congress Party’s adulation for the Gandhi family, I wouldn’t be surprised if either name came to the fore after the election.

India likes nothing more than someone who’s made a sacrifice – think about Buddha, Ashoka, Mahatma Gandhi and other illustrious persons, to which you can add Sonia Gandhi’s name. For she, sacrificed the position of PM last time around (on the issue of her Italian origin) to install Manmohan Singh as PM and win over a new fan base and acceptability.

LK ADVANI
India knows Mr Advani very well. He’s been around for half a century or so and until the last election played an effective no2 to Mr Vajpayee, who’s since bowed out of politics. Being the numero uno, he’s finally the contender, but it seems the Obama effect has resulted in his chances being drastically reduced. A lot of people I speak to all say they want someone younger (Obama effect) to lead the BJP.

With the increasing acceptability of Narendra Modi, it seems the pressure on Mr Advani is that much greater. It’s lucky for him that he’s already been nominated as their Prime Ministerial candidate! I witnessed the tension just a few weeks ago when I attended the Vibrant Gujarat Investors Summit and on the following day, read in the newspapers the furore his success has caused within party ranks. After all, it’s not often that a politican receives the backing of India’s biggest businesses in such a visible manner. At the risk of saying something obvious, I have no doubt that Mr Modi will ascend to the national stage after the next election, however I don’t think he’ll take the post of Home Minister if the BJP win.

MAYAWATI, PRAKASH KARAT, AMAR SINGH, SHARAD PAWAR
In my view, any one of these could determine the next election, if not become the next PM. Mayawati’s increasing reach is unnerving everyone. She’s the Chief Minister for Uttar Pradesh, which returns the largest number of MPs and as she’s ruling, her chances of success are huge.

Prakash Karat’s monumental miscalculation of withdrawing its support to the Congress over the US – India Nucelar Deal has provided Amar Singh’s Samajwadi Party a huge advantage in the run-up to the polls. The Communists haven’t been able to extend their reach outside West Bengal & Kerala, but enjoy huge loyalty in these two states.

The Samajwadi Party lead by Amar Singh, as always, could upset Mayawati’s coronation. You can expect the unexpected when it comes to these two. Amar Singh, after years of hurling abuse at the Congress, decided to jump into bed with them and extend unconditional support to the Congress.

The Maratha vote, lead by Sharad Pawar, who’s NCP is a current coalition partner could also emerge as a victor. A former Congress leader, he split and formed his party focusing on his home state of Maharashtra. With charismatic operators like Praful Patel, I wouldn’t rule him out of the running. Of course, as President of the cricketing board, he’s used to taking on heavy weights in battle.

Elections in any country are interesting to watch. In India, you’re assured a fantastic contest in which a billion people make their way to the polling booths to cast their votes electronically over a six week period. India’s faith in democracy, itself, is worthy of celebration.

As for my crystal ball, it tells me that despite Congress winning the most seats, it see someone like Mayawati at the helm for a couple of years.