INDIA – Third front and the economy

Bihar Chief Minister, Nitesh Kumar’s Janata Dal United (JDU) having pulled out of its alliance with the NDA there is going to be a realignment of political parties in India. There is a distinct possibility of a THIRD FRONT emerging which will be composed of regional parties and this will have an impact on the Indian economy as well. This grouping of regional parties could include JDU, AIADMK, SP, TMC, SAD, TDP, JDS, BJD, JDS, AGP, NC, INLD, and several others. If such a grouping emerges at the national level it is going to be a very powerful one. The present groupings will continue as long as the regional parties want to postpone the elections. Once they find themselves prepared for elections they will withdraw support to UPA and there will be no other alternative but elections.

Under such a scenario let us try to visualize what will be the outcome of the elections. The third front will have emerged as a powerful force and, if all goes well for the grouping, it will be in a position to secure a slender majority in the Lok Sabha. There are several states  such as Bihar, Tamil Nadu, Uttar Pradesh, West Bengal, Orissa where the prospects for the third front can be considered to be excellent. We have estimated that the third front will win about 175 seats in these states.

In states such as Maharashtra, Karnataka, Assam, Andhra Pradesh the prospects for the third front is estimated to be moderate and they are expected to win 60 seats here. In states such as Madhya Pradesh, Rajasthan, Kerala, Gujarat the prospects for the third front is considered to be poor. The third front is expected to win only 40 seats here.

This gives a total number of 275 seats for the third front which will provide it with an absolute majority in the Lok Sabha. The BJP without its allies would have become very frail and may be able to garner only about 80 seats. The Congress and its allies may do only a shade better by winning 120 seats. The left front, in this scenario may manage to win 20 seats and the newly formed Aam Admi Party may have to remain contended with only 3 seats.

All talk of Modi versus Rahul in the PM race will disappear into thin air. At the same time the third front will also have difficulty finding a PM candidate. Two prominent contenders will be Jayalalitha and Nitesh Kumar. May be, the front will have to finally decide that the regional party which emerges most successful in the elections will nominate its leader as PM. After the defeat of BJP in the 2014 elections Narendra Modi will go into oblivion. Even the BJP will not want him after that. He will only be a temporary phenomenon for about a year on the national scene.

The Food Security Bill is not likely to be passed during the term of the present Lok Sabha as it will give considerable advantage to the Congress Party in the general election and the opposition parties will try their level best to prevent this bill from going through. Even if an ordinance is promulgated it may fail to win the necessary support in Parliament. However, a few financial bills, close to the FM’s heart, like the insurance and pension bills, may be passed with the support of the BJP, but after making necessary amendments desired by the BJP. The Companies Bill and the Direct Tax Code may also sail through during the term of the present Lok Sabha.

How will such a third front government elected with an absolute majority fare in the matter of governance. Here the results will be mixed. On the non-economic side the front may be able to achieve commendable results. But on the economic side the driving force of the front is likely to be populism and as the days go by, the nation will slowly get into economic difficulties. Finally, when the front completes its full term a fully blown out economic crisis could emerge. Perhaps at this stage the Indian public may once again demand the services of the Congress Party to tide over the mess the Indian economy would have got into.