Edelweiss :: Elections - Tying UP

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Among five states heading for elections, Uttar Pradesh (UP) is by far the most important one due to its largest representation in Lok Sabha (80/543). The outcome will not only influence fortunes of the Congress Party (Congress), but may also alter the coalition equation at the Centre, setting the stage for 2014 general elections. Opinion polls point towards a fractured mandate with Samajwadi Party (SP) and Congress making gains at the expense of the ruling Bahujan Samaj Party (BSP). This may result into SP-Congress alliance forming govt. in the state, which in turn will also strengthen the UPA coalition at the Centre. However, repeated election gains for Congress, despite allegations of mis-governance, may not necessarily be positive for the economy as the party might feel emboldened to pursue its social sector agenda (as it is paying rich political dividends), thereby hindering the fiscal consolidation process.

Assembly polls in five states; UP in spotlight

Five states—UP, Punjab, Uttarakhand, Goa and Manipur—will be conducting assembly elections during Jan-March 2012. Among these, UP is by far the most important state from the national politics point of view as it accounts for the largest number of Lok Sabha seats (80) with Punjab coming in at a distant second (13). Remaining states are small, accounting for just nine Lok Sabha seats in all.

Success in UP to swing fortunes in favour of Congress

The outcome of UP elections is crucial for Congress in several ways: 1) If Congress-SP alliance assumes power in UP, Congress will get support of SP’s 22 MPs at the Centre, enough to reduce reliance on Trinamool Congress (TMC), 2) It will be a real test of popular sentiments towards Congress given the widespread allegations of mis-governance and civil society movement against corruption and 3) Election outcome will be crucial in shaping the political fortunes of Rahul Gandhi and therefore the leadership of UPA in the 2014 general elections. 

Opinion polls:  SP to emerge as leader, Congress to gain too

Opinion polls hint at a fractured mandate with no party getting a majority in UP. STAR News-Nielsen survey conducted in 222 constituencies during November-December 2011 projects 117 seats for BSP, 132 for SP, 68 for Congress, 65 for BJP and 10 for RLD. Other polls also point towards BSP losing vote share while Congress gaining.

Repeated gains for Congress: Is it necessarily positive for economy?

If Congress gains substantial ground in UP and forms the government in alliance with SP, it will bolster its position within UPA, reducing dependence on TMC. Further, Rahul Gandhi’s stature as a leader of the UPA would also be fortified.  However, it will also give a message for the Congress leadership that the party’s social sector programmes are reaping rich political dividends, far outweighing the negative publicity received due to allegations of bad governance. This may hinder the fiscal consolidation process, hurting the economy’s medium-term growth prospects.