Mohan Guruswamy
July 15, 2004

The outcome of the 2004 Lok Sabha elections was essentially determined in Andhra Pradesh, Bihar and Tamil Nadu. Of course the Congress improved in Maharashtra and Gujarat. But it is in these states that the Congress and its allies made spectacular gains and thus turned the tables on the NDA. Each of these states seems to have voted the way they did for different reasons. In Andhra Pradesh the claim of a spectacular economic performance by the two term incumbent TDP government was spectacularly rejected. In Bihar the allegations of bad governance and corruption came to naught and the RJD spearheaded electoral formation came through, despite its unbroken fourteen-year innings governing India's poorest and most poorly performing state. In Tamil Nadu, the state that had posted the best results in the South, the fastest growing region in India, the people unceremoniously turfed out the AIADMK government. On the face of it, it would seem that corruption and misuse of political office had become an issue. But this government was headed by the very same lady who came to office quite spectacularly despite several cases of corruption pending against her.

It all gets very confusing. The CEO, "The Economic Times" man of the year, and Bill Gates' pal gets the boot; the proxy government in bottom of the heap Bihar gets a pat on its back; while a government that generally was delivering the goods as it was supposed to, is skewered and quartered with its fat still on the fire. Trying to make sense of this is going to be tough.

Quite clearly there is never a single reason for voting out a government. Reasons also seem to change all the time. Though there are several reasons that make for an adverse mandate, there is usually a main reason. This could vary depending on the local conditions. People who write after election results come in seem to prefer conclusions like "rejected by the people" or "sent out packing" or "loss of confidence", but it's seldom the case. What happens is usually due to a marginal shift in support, and sometimes due to a realignment of votes cast to different formations. The erosion of support is never steep as most well established parties have a generally loyal base. It's a very small minority that makes the difference between winning and losing an election. If that is so then are issues all that important? Even the post Emergency mandate to the JP led coalition was less than 50% of the votes cast. Objectively speaking in terms of percentage of the total vote, the Congress didn't do all that badly. But in a first past the post system such as ours, results get horribly skewed. Consequently political analysts and writers come to sweeping conclusions. The truth is that we have never really understood how and why people vote one way or the other. We might even never be able to fully unravel voter preferences for the subject is much to complex with far too many variables that make even the largest sample sizes quite inadequate.

But certain electoral truths are universal. It's a well-known fact that in a democracy governments are usually voted out, seldom voted in. People vote out governments on the basis of issues that affect core values - such as corruption - hence called valence issues, or over bread and butter issues or pocketbook (wallet) issues. Whatever be the reality it is perceptions that matter. But no perception can be created without any reality to back it up. Perceptions of mismanagement leading to economic costs to the populace are always difficult to overcome. The perception could be a result of the overall price rise or paucity of new jobs or a feeling of being left behind or all these and some more. When there is no dominant or overwhelming valence issue, like Bofors, then bread and butter issues dominate. This then brings us to the old adage of Tip O'Neill the former Speaker of the US House of Representatives, that "all politics are local." This seems to be true in India too. Local issues seldom go away, unless something truly overwhelming happens, as in 1984 when Indira Gandhi was assassinated or in 1977 when the Emergency excesses caused a wave of revulsion in northern India.

While the 2004 electoral calculus was favorable in Bihar and Tamil Nadu with the locally dominant Congress allies being able to stitch together formidable new coalitions to successfully challenge the NDA grouping, in Andhra Pradesh it was not the case. The Congress and its partners went head to head against pretty much the same formation that triumphed in 1999, and with a much hyped performance card in its favor. Vajpayee and Chandrababu Naidu on the same side seemed much too big to beat. Yet the TDP was comprehensively beaten.

The evidence suggests that the reality was far different from the hype and this seems to have finally caught up with Chandrababu Naidu. For the actual Chandrababu Naidu scorecard was far different from what the pink papers, the CII and multilateral agencies made believe about him. The real shocker was that even a consummate and crafty political pro like Naidu didn't seem to realize that such endorsements were, in general, the kiss of electoral death as they only served to confirm the worst fears the general public came to have about him and the TDP government. In politics it is as important to have the right enemies, as it is to have the right friends. Having the fat cats, Indian and foreign, for enemies actually help as it then serves to define a leader as pro-poor, which is where the vote is. The problem for Naidu got compounded when perception began to coincide with reality. So it is necessary to delve a bit into the reality in Andhra Pradesh.

But before we get into that, a little about Bihar. For fourteen years Lalu Prasad has politically towered over Bihar even as turmoil engulfed him from all directions. On the personal front things couldn't have been worse for him. He was charged with corruption and arrested for a longish spell. Even now he remains free on bail that has to be periodically renewed. The performance card of Bihar could not be worse. It comes last on almost all economic and social indices. The only bright spot on the Bihar record is that primary school enrollment is slightly better than the national average, but then this could be because it has more young people as a percentage.

Yet Lalu Prasad's RJD led alliance performed brilliantly. It came from behind and confounding all polls and conventional wisdom hit the NDA for a six. The NDA's campaign focused on the RJD government's failures and its Bihar campaign chief, the former I&B Minister Ravi Shankar Prasad, incidentally brought out at GOI expense, a booklet highlighting these failures. But it did not work. Lalu Prasad had an antidote. He used a CPAS study "The Economic Strangulation of Bihar" to maximum advantage. The CPAS study highlighted the economic deprivation suffered by Bihar for many decades but which accelerated during the NDA's tenure. The RJD campaign posed a simple question. Bihar had thirteen ministers in the Vajpayee Government, yet why did it get so little? The NDA apparently had no answer.

Knowledgeable pundits will turn out reams about the caste consolidation in Bihar and how Ramvilas Paswan's dalit vote base tilted matters in favor of the RJD led alliance. But the little research that is available on how castes vote does not suggest that castes vote en bloc. Even in communally polarized Gujarat over 22% of Muslims voted for the BJP. Issues do shape perceptions and people vote according to their perceptions.

The Reality in the South.

The four southern Indian states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu after languishing behind the North and West in terms of economic growth in the 80's surged ahead in the 90's by posting a growth rate of 6.0%, ahead of the national GDP growth of 5.6%. While this higher GDP growth has given the South an aura of progress and good governance, it masks much diversity in performance. The CPAS published a detailed comparison of the progress made by the four South Indian states and the conclusions of "Last in the South" was widely disseminated by excerpts published in many leading newspapers in the South. The conclusions of the study were quite different from generally held perceptions among the opinion leaders. Contrary to their view AP actually fared poorly and came out as the laggard in the South. Quite clearly Tamil Nadu was the big performer in overall terms, despite Kerala keeping its traditional lead in terms of human development.

Tamil Nadu had kept ahead of the national GDP growth rates for the 8th, 9th and 10th Plan periods. Andhra Pradesh's performance, languishing last in the South, was also below the All India average. Tamil Nadu's per capita GDP of Rs. 14,592.90 was well ahead of AP's Rs. 11,293.40, which is also behind the All India per capita of Rs. 11,625.20. It would seem that this gap has only widened during the 9th Plan period (1997-2002) when AP went well behind the other southern states with a poor economic growth of just 4.60%, at a time when India's GDP grew at 5.50%.

The decline in the incidence of poverty truly reveals the poverty of results in AP. In 1983 the incidence of poverty in AP was the lowest in the South at 28.9%. However in 2001, AP (15.8%) lost its first position to Kerala (12.7%). But what should cause even more concern is the rate of change. AP's incidence of poverty changed by 13.1%, while that of Tamil Nadu dropped by 30.6% from 51.7% to 21.1%. Kerala changed from 40.4% to 12.7% while Karnataka improved from 38.2% to 20.0%. It's in terms of absolute numbers that the figures are more telling. The number of poor in Tamil Nadu shrank from 260.1 lakhs in 1983 to 130 lakhs in 2001, while the number of poor in AP that stood at 164.6 lakhs in 1983 dropped to 119.0 lakhs in 2001. Thus while 130.0 lakh people moved above the poverty line between 1983 to 2001 in Tamil Nadu the corresponding figure in AP was just 45.6 lakhs. Quite clearly this was not enough to 'feel good' about?

Even in terms of change in yield of food grains, AP billed as the granary of the South, had not done as well as the other states during the last decade. Tamil Nadu's yield of 2,461 kgs. /hectare was the highest with Kerala and AP following with 2,094 kgs. /hectare and 2,089 kgs. /hectare respectively. Karnataka with a yield of just 1,412 kgs. /hectare was the lowest, but the improvement of 55.2% between 1990-2000 was the highest while the corresponding change for AP and Tamil Nadu was about 30% each.

AP's record on the industrial front too was just as poor. Of the four southern states AP registered the lowest gross industrial output of just Rs. 7,707.0. Not only is this lower than the All-India average (Rs. 8,965.0) it is less than half the figure recorded by the southern leader, Tamil Nadu (Rs. 15,523.0). Even in terms of value addition AP (Rs. 1,128.0) trailed the rest. Though AP is only marginally behind Kerala (Rs. 1,162.0) it is well behind Karnataka (Rs. 1,668.0) and Tamil Nadu (Rs. 2,517.0).

But development is not just about economic growth. AP's performance in the critical areas generally accepted as the basic criteria to measure development has been patchy at best. The increase in literacy between 1991-2001 was an impressive 38.5%; well over the 23.5% achieved during 1981-91. Still AP's literacy level is only 61.1%, below the All India level of 65.4%. But it would not be correct to judge AP's performance as better than the other three southern states for they started with higher levels and that influences the rate of growth. Kerala for instance had a literacy level of 81.6% in 1981 and that went up to 90.9% in 2001. Literacy in Tamil Nadu grew from 54.4% in 1981 to 73.5% in 2001. Karnataka has been the real poor performer here with change from 46.2% in 1981 to 67.0% in 2001. Thus we see that AP, which was a good 10.5% behind Karnataka in 1981, has closed the gap down to 5.9% in 2001. Here is the other big southern irony for Karnataka was, till the election results at-least, often held up as the other big performer in the South?

In terms of population growth too Karnataka fared poorly by registering the highest decennial growth of 17.3%. AP grew at 13.9% while Tamil Nadu (11.2%) and Kerala (9.4%) were well ahead. All the southern states were well below the All India population growth of 21.3% during 1991-2001.

But when it came to Infant Mortality Rates (IMR) AP's performance was truly miserable. While the All India IMR dropped from 104/1000 to 66/ 1000 between 1981-2001, AP's IMR dropped from 86/1000 to 66/1000. Kerala by contrast achieved an IMR of just 11/1000 taking it close to developed country levels. Karnataka (58/1000) and Tamil Nadu (49/1000) too have fared much better than AP.

Life expectancy at birth is another determinant of development. Here also AP was behind the other southern states. The performance of Tamil Nadu on this count has been the best with additions of 3.8% and 4.3% for males and females respectively while the corresponding increases for AP have been 1.2% and 1.1% respectively. AP that had a better life expectancy for men than the All India average (60.8 to 60.1) fell behind the national average for 1996-2001 of 62.4 years by achieving 61.5 years. In the case of women the All India average increased by two years from 61.4 years to 63.4 years from 1991-2001 while that of AP increased slightly from 63 years to 63.7 for the same period. The national increase in the life expectancy for women at 3.3% was thrice the AP increase of 1.1%.

AP's poor performance on various development indices meant that the state was relegated to the last spot in the human development index among the four southern states. In 1991 AP was ranked a low 23 among the 32 States and Union Territories ranked as per the index. While among the four states Kerala (3) took top honors, Tamil Nadu (14) and Karnataka (19) also fared better than AP. While the four southern states have moved smartly up the national ladder, their order remains the same in 2001.

While AP's performance on various socio-economic indicators has been less than exemplary, the state's political support to the NDA government ensured that AP benefited disproportionately in terms of central assistance. Of the four states AP received the highest (Rs. 1,292.8) cumulative per capita grants from the Centre for the period 2000-01 to 2002-03. While Karnataka (Rs. 1,127.2) was a close second, Kerala (Rs. 793.6) and Tamil Nadu (Rs. 777.9) were way behind.

Despite this AP's spending on some of the key development indicators is not very impressive. AP's spending on Education for 2000-01 was the lowest (Rs. 493.9) among the four states. The All-India average (Rs. 586.8) for the corresponding period was also much higher. Kerala was the highest spender (Rs. 827.8) in the South. AP's (Rs. 140.1) spending on Medical and Public Health was only better than Karnataka (Rs. 64.2) and was below the All-India figure (Rs. 157.2). On the other hand Tamil Nadu (Rs. 160.8) and Kerala (Rs. 187.8) spent much higher sums of money.

So what happened in the South? Chandrababu seems to have lost because the perception he tried to create about himself did not coincide with the reality. The defeat was comprehensive as the TDP lost in every sub region and even in the twin cities of Hyderabad and Secunderabad, which he was accused of pampering at the cost of rural areas. But Jayalalitha whose regime did extremely well by comparison also lost. In her case it seems that the perception of a capricious, self-centered and remote leader overrode the reality of a state doing much better than the neighboring states.

The Reality in Bihar

That Bihar is India's poorest and most backward state is undeniable. The facts speak for themselves. But what makes its situation unique is that Bihar is the only state in India where poverty levels are uniformly at the highest level (46-70%) in all the sub-regions. The annual real per capita income of Bihar of Rs. 3650 is about a third of the national average of Rs.11, 625. Bihar is also the only Indian state where the majority of the population - 52.47% - is illiterate.

But Bihar has its bright spots also. Its infant mortality rate is 62 per 1000, which is below the national average of 66 per 1000. But what is interesting is that it is better than not just states like UP (83) and Orissa (91), but better than even states like AP and Haryana (both 66). Even in terms of life expectancy, the average Bihari male lives a year longer (63.6 yrs.) than the average Indian male (62.4 yrs) and the state's performance in increasing life spans has been better than most during the past three years. Bihar has 7.04 mn. hectares under agriculture and its yield of 1679 kgs. per hectare, while less than the national average of 1739 kgs. per hectare is better than that of six other states, which include some big agricultural states like Karnataka and Maharashtra. Despite this, in overall socio-economic terms, Bihar is quite clearly in a terrible shape.

As opposed to an All-India per capita developmental expenditure (from 2000 to 2002) of Rs.6748.50, Bihar's is less than half at Rs.3206.00. While development expenditure depends on a bunch of factors including a state's contribution to the national exchequer, no logic can explain away the per capita Tenth Plan size, which at Rs. 2533.80 is less than a third of that of states like Gujarat (Rs.9289.10), Karnataka (Rs.8260.00) and Punjab (Rs.7681.20). This became the fulcrum of the RJD campaign focusing on the economic deprivation of Bihar.

Simple and sound economic logic tells us that when a region is falling behind, not just behind but well behind, it calls for a greater degree of investment in its progress and development. It is analogous to giving a weak or sick child in the family better nutrition and greater attention. Only in the animal kingdom do we see survival of the fittest with the weak and infirm neglected, deprived and even killed. But instead of this we see that Bihar is being systematically denied, let alone the additional assistance its economic and social condition deserves, but also what is its rightful due. From the pitiful per capita investment in Bihar, it is obvious that the Central Government has been systematically starving Bihar out of funds. This message seemed to have gone home and shifted focus from what the RJD did to or did not do for Bihar, to what the NDA did not do for Bihar. The RJD attributed it all to adversarial politics of a low order.

That politics have a lot to do with neglect is seen from the fact that while AP received Rs.3507.60 crores (1998 to 2000) as "additional central assistance for externally aided projects in state plans", Bihar just received Rs.306.90 crores. Even in terms of grants from the Central Government (2000 to 2002), Bihar fares poorly. It received Rs. 4047.30 crores while AP topped the list with Rs.9790.00 crores. Bihar has also been neglected as far as net loans from the center are concerned. It received just Rs.2849.60 as against Rs.6902.20 received by AP from 2000-02. It's only in terms of per capita share of central taxes do we see Bihar getting its due. This gross neglect by the central government is reflected in the low per capita central assistance (additional assistance, grants and net loans from the center) received by Bihar in 2001. While AP received Rs.625.60 per capita, Bihar got a paltry Rs.276.70.

The results of the economic strangulation of Bihar can be seen in the abysmally low investments possible in the state government's four major development thrusts. Bihar's per capita spending on Roads is Rs.44.60, which is just 38% of the national average, which is Rs.117.80. Similarly for Irrigation and Flood Control Bihar spends just Rs.104.40 on a per capita basis as opposed to the national average of Rs.199.20.

Now the question of how much did Bihar "forego"? If Bihar got just the All-India per capita average, it would have got Rs. 48,216.66 crores for the 10th Five Year Plan instead of the Rs.21, 000.00 crores it has been allocated. It would have got Rs. 44,830 crores as credit from banks instead of the Rs. 5635.76 crores it actually got, if it were to get the benefit of the prevalent national credit/deposit ratio.

Similarly Bihar received a pittance from the financial institutions, a mere Rs.551.60 per capita, as opposed to the national average of Rs.4828.80 per capita. This could presumably be explained away by the fact that Bihar now witnesses hardly any industrial activity. But no excuses can be made for the low investment by NABARD. On a cumulative per capita basis (2000 to 2002) Bihar received just Rs.119.00 from NABARD as against Rs.164.80 by AP and Rs.306.30 by Punjab. It can be nobody's argument that there is no farming in Bihar. If the financial institutions were to invest in Bihar at the national per capita average, the state would have got Rs.40, 020.51 crores as investment instead of just Rs.4571.59 crores that it actually received.

Quite clearly Bihar is not only being denied its due share, but there is a flight of capital from Bihar, India's poorest and most backward state. This is a cruel paradox indeed. The cycle then becomes vicious. This capital finances economic activity in other regions, leading to a higher cycle of taxation and consequent injection of greater central government assistance there. If one used harsher language one can even say that Bihar is being systematically exploited, and destroyed by denying it its rightful share of central funds. To good measure Lalu Yadav in his inimitable way conveyed to his people that the jeering of Bihar's political elite and its polity that has become a standard feature of our national discourse was served only as a smokescreen to deny it its rightful due. It was also downright insulting to Bihar. Vajpayee didn't help his cause very much by telling a Patna audience that while he was "Atal", he was not a "Bihari". It only buttressed what Lalu Yadav was telling Bihar.

This then in essence became the RJD's message to the people. Its campaign theme was that "Bihar has 13 ministers in Delhi, yet why did Bihar get so little?" The NDA on the other hand was arguing that the Bihar government was unable to use the funds sanctioned. To this the RJD reply was that we can draw Central funds only when the State has the ability to pay its share for the programs against which they are sanctioned. In this the CPAS study came in very handy to the RJD. Lalu Prasad Yadav waved the booklet "the Economic Strangulation of Bihar" in every TV interview he gave and in every public meeting. He deflected the NDA's charge of misgoverning Bihar by in turn charging it with not doing enough for Bihar. The facts supported the RJD. This then became the dominant perception and even the skeptical Bihari elite had to agree that the RJD supremo had a point.