Bhubaneswar: Notwithstanding the fact that BJP has succeeded in retaining power in Gujarat for the sixth consecutive term and even snatched Himachal Pradesh from the Congress kitty, the results of the Assembly elections is likely to cause some discomfort to the saffron party.
Contrary to the party president Amit Shah’s tall claims of winning 150 seats in the Gujarat Assembly this time, the BJP could only secure a simple majority – 99 seats. While the party suffered badly in the Patidar stronghold Saurashtra region, its vote share among the rural electorate too has taken a plunge. On the other hand, despite annexing Himachal Pradesh from the Congress, Prem Kumar Dhumal, its chief ministerial candidate for the state, lost the election to his former protégé Rajinder Rana.
Economists are of the view that such “unexpected” result may compel the NDA government at the Centre to adopt a populist budget next February with a view to remain in power at the Centre after the 2019 general elections. The government, which is facing a severe resource crunch, is most likely to go slow on its economic reforms agenda, including the strict implementation of the Goods and Service Tax (GST), they opined.
“The slender victory margin in Gujarat elections could mean that the government will be tempted to avert the path of fiscal forethought, a prominent Bhubaneswar-based economist told the Orissa Post Monday. The Union Budget in February will be the last full-form budget from the Narendra Modi-led NDA government before the country goes for general election in 2019.
“The uncomfortable win in Gujarat may tempt the government to try and conciliate the voters. As a result, it is likely that the Union Finance Minister Arun Jaitley will make a number of feel-good announcements, which will actually be a fine balancing act,” said Panchanan Kanungo, a noted economist. Nevertheless, such a move could attract the rating agencies’ censure.
Moreover, such a close victory also signifies that the Centre may not have the guts to push its aggressive fiscal reforms, including the GST, which, has led to a severe resource crunch. “The revenue collection has already dropped by over Rs 37,000 crore so far and it is likely to be a whopping `1 lakh crore by the end of the current fiscal, resulting in acute resources,” Kanungo said.
Another economist, speaking on the condition of anonymity, said, “As elections are likely to be held by the end of 2018, the country will witness fewer foreign direct investments (FDIs). This will, in turn, prevent the government from undertaking employment generation measures.”
PNN
