Above, Asia's oldest stock market, the Bombay Stock Exchange. Photo from Wikipedia.
Over 700 million registered voters went to the polls in India over the last four weeks, in what was the world's latest, largest display of democracy.
While the results didn't offer any major surprises (e.g. there was no real emergence of the Third Front), they generally looked like a strong affirmation of the public's support for the ruling Congress-led United Progress Alliance, and the economic policies of Prime Minister Manmohan Singh. So at the risk of pontificating from 7,000 miles away, here's my take on why this year's general election for the lower house of Parliament in India (or Lok Sabha) was an important one.
While neither Congress or the BJP and their respective alliances have ever fully shown themselves to be free and clear of the cloud of corruption that seems to hang over every Indian government, this Congress party has shown itself to be a consistent, if lumbering, supporter of free market policies both regarding business activities in India and for the rules governing foreign investment.
As I write this, trading on the BSE has been temporary halted following an 11% opening surge on Monday morning in Bombay. The markets perceive these election results as an indication that the economic liberalization of the past 15 years will continue and that the government will remain stable, despite the specter of terrorism and the albatross of overwhelming poverty.
Almost exactly five years years ago the Congress party re-took power from the BJP on the cry from India's masses that economic growth was only benefitting the wealthy and urban dwellers, but not trickling down to the village. With five years of GDP growth at 6-9%, those days seem to be forgotten. Whether these results reflect the continued migration of workers to cities or the beginnings of a true economic virtuous cycle that's reaching more of India, it seems like many Indians are feeling optimistic about the future, India's place in the world and their long-term economic fortunes. And despite the global slowdown, India's economy is still growing at over 5% a year.
But the real reason I think this election is important, is that in many places there seemed to be a repudiation of some of the traditional old dogs of Indian politics: Elderly, ideological, caste-oriented politicians who in the past have bought and paid for votes with handouts and color tvs and bankrupted public treasuries with needless monuments and debt forgiveness. The question for these leaders always seemed "how do we get our share of the pie (or uttapam?)," rather than "how do we cook a bigger one?"
In Bihar, India's poorest state, 21 new politicians will take office following this election. And in Uttar Pradesh, India's largest state by population, the Congress party apparently took votes from both the upper caste Hindu parties and the Muslim parties, two groups with constituents that are often at very different ends of the economic spectrum.
I'll caveat all this Jai Ho talk with links to a group of bloggers I greatly respect (desicritics).
First, one blogger's responses to several "consensus views" on what the election results tell us.
And second, an essay by Vivek Sharma, PhD, suggesting that this election demonstrated the Indian electorate's growing "maturity."
Here's a little more music to leave you with, my favorite music video, and movie, of the last year.
