The election results are out. The BJP has emerged as the largest party in Maharashtra, but without a clear majority. It will now have to work with a partner.
The stakes are high for the BJP, the Shiv Sena and the NCP. The Congress may have to slink into a corner and lick its wounds. The stakes are higher for Maharashtra too — as a state.
The mighty fall down
Maharashtra was the undisputed national leader till the 1970s. It was India’s financial capital. It was also India’s industry hub. People flocked to this state in search for jobs, and for kickstarting enterprises which in turn created jobs. It was vibrant. However, over the past four decades, the state has lost its allure.
The census figures tell its all. The state’s population grew by 27.5 % during the 1961-1971 decade. The following decade, population growth in this state had slipped to 24%. After a 1% surge over the previous growth rate in the following decade (25.7%), it slipped once again in the following years to 22.6% by 2001. In the last census tally, it had slipped even further to 16.1%.
Since annual population growth is around 2%, a state’s population is expected to grow by 20% over a decade. The latest tally suggests that more people left the state than stayed within it. Remember, people who choose to migrate generally tend to be above average workers in zeal and intent. Maharashtra had begun to witness a state of diminishing returns.
The table alongside also suggests this. Mumbai, Ratnagiri and Sindhudurg witnessed a net decline in population. Many other districts registered a sub-10% population growth, indicating that more people left than stayed behind. People had begun voting with their feet.
This was brought out in sharp focus when economists Bibek Debroy, Laveesh Bhandari, Swaminathan S Anklesaria Aiyar, and Ashok Gulati submitted their findings in “Economic Freedom Rankings for the States of India, 2012”. They pointed out that Maharashtra’s ranking among the states of India had slipped from the 9th position to the 13th between 2005 and 2011. On the other hand, Gujarat’s ranking improved from 5th to 1st. Rajasthan had climbed from 12th to 8th, while Karnataka from 13th to 9th. Maharashtra had begun to lose out, big time.
The needle of suspicion
With the benefit of hindsight, it becomes clear that the most cancerous of Maharashtra’s ills was the lust for money from real estate — the Adarsh scam was just one manifestation. Land was not acquired for major development projects. Thus the dedicated freight corridor — that could have brought wealth and employment to Maharashtra — got deferred. The expansion at JNPT got delayed because Maharashtra’s ministers encouraged slum development on its lands. Ditto with the development of Panvel and the new airport for Mumbai.
Slum development — both for real estate and vote banks — became hyperactive (http://www.dnaindia.com/money/report-policy-watch-there-s-buzz-of-economic-activity-in-slums-too-1968262). The result: those who were moneyed opted to move to newly emerging cities where they could make more money (and jobs) in peace. Newer cities became more attractive.
Other ills followed. For instance, police posts began being auctioned off to the highest bidders. It compelled a former police commissioner to write publicly about the dangers to civic society that such a move could unleash. Officials of the Food and Drug Administration (FDA), the Shops & Establishments (S&E), labour and octroi departments became additional sources for raising slush funds. And this does not include money from the irrigation scam or from water tanker operators.
Communal clashes — even under the Congress-led government — were more frequent in Maharashtra than in many other states. And illegal mining in the state — the highest in India — was blithely ignored (http://www.dnaindiacommoney/1883063report-policy-watch- maharashtra-still-flirting-with-illegal-mining).
Farmers too lost out, because of the rapacious practices followed by the Agricultural Products Marketing Commission (APMC) which the state government refused to abolish.
What is required?
The BJP would have loved to get a clear majority. It would then be easier to pass key pieces of legislation that India requires. Foremost among them are abolition of the APMC, octroi and the raid raj unleashed by the FDA, S&E and labour departments. The abolition of the APMC would give more economic power to farmers.
The state also needs to revive the fortunes of the Vidarbha region — irrespective of whether it becomes a separate state or not. For decades, coal this region produces has benefitted western Maharashtra. But Vidarbha got little in return as jobs, incentives or development. Water and power for agriculture need to be priced and or monitored. A good way would be to levy a uniform tariff for electricity — irrespective of whether it is used by agriculture, industry or slums. The quantum of subsidy required for different segments could through direct transfers as with LPG (read Ajoy Mehta’s views at www.dnaindia.com/mumbaiconversation-corner_power-tariffs-are-bound-to-change_1712395-all).
That would hurt the NCP party most, as it is the major beneficiary of water at the cost of Vidarbha and the rest of Maharashtra. That is why, there is speculation that the NCP might split and join the BJP to protect its own economic interests in sugarcane, cooperatives, education and real estate. General Sales Tax (GST) needs to be approved by the state government as it will reduce the corruption (and economic cost through delays) at octroi posts and state borders. But most of all, new industries must be encouraged. New jobs have to be created — a key reason why many young people voted for the BJP.
But with a limited political mandate, the BJP will have to work on its post-poll strategies carefully. It needs to ensure that it gets all the above policies right, without risking opposition from its alliance partner.
If that can be done, Maharashtra will emerge as the real winner. The state needs it. Desperately.
The author is a consulting editor with dna