Why It’s A Bit Premature To Presume That Modi Will Win Hands Down In 2019

Sometimes, strength is weakness, and weakness is strength.

With almost everything going its way for the last six months – from the stunning win in Uttar Pradesh to the election of the President and the Vice-President, and the Nitish Kumar coup in Bihar – what Bharatiya Janata Party (BJP) president Amit Shah should be asking himself is whether the party’s power is peaking too soon.

Contrary to what some have been forecasting (read here, here, and here), 2019 is not a slam-dunk for Narendra Modi. For one, issues that are important to the electorate start crystallising only towards the last six months ahead of an election. Atal Behari Vajpayee lost 2004 in the last three months.

Economic growth trends will play a larger role this time. Governments facing an election when the economy is not doing too well may face a whiplash. It is far from certain that jobs will suddenly start booming by 2018-19, and even then not many people may think it helped them.

Last, the more someone looks invincible so far ahead of election season, the more the chances that his rivals will find a reason to coalesce and bring him down.

It is worth recalling that the Modi government’s major legislative successes were achieved in 2016 when it was partly down. The Bankruptcy Code, the Real Estate Regulation Act and the goods and services tax (GST) constitutional amendments came through after the chastening defeats of the previous year in Bihar and Delhi. Demonetisation added spice to the Modi story as a man who will take risks to tackle black money. It was a political win for him, but the economics haven’t played out as anticipated.

From here onwards, it is only economics that will matter, and GST, in particular, must deliver in spades for Modi to get his bandwagon speeding up by early 2019. For GST to be deemed a success by early next year, it must both deliver higher revenues, and result in lower friction in terms of compliance hassles. As of now, neither can be assumed to be a certainty, though in the longer run GST will surely deliver higher revenues. From an election perspective, though, GST needs to be seen as doing good by mid-2018 so that it is no longer a bone of political contention by large sections of the electorate.

But the single most important determinant of the political winds in 2019 will be jobs.

As things stand, demonetisation has taken the wind out of the jobs market, with Mahesh Vyas, chief executive officer of the Centre for Monitoring Indian Economy (CMIE), estimating the 1.5 million jobs were lost during January-April 2017.

While these are CMIE’s estimates based on its own Consumer Pyramids Household Surveys, it is unlikely that the trend will be contradicted by the National Sample Survey Office (NSSO), when it comes out with its own numbers before 2019. The CMIE survey was based on a sample of 161,167 households covering more than five lakh adults.

It is thus advisable for the BJP to curb its triumphalism, and focus on delivering jobs. It would help if the party softened its political rhetoric and made genuine efforts to engage with the opposition parties on big issues.

The Rajya Sabha numbers will start turning in the government’s favour some time from early next year, but that will not make a difference to economic trends upto 2019. Any reforms that happen in 2018 will deliver results only after 2019.

Barring war or other unexpected national crises, the only thing that will prove helpful to Modi in 2019 is jobs, jobs, and more jobs.