India: Political and institutional effectiveness

Content Type
Country Data and Maps
Institution
Economist Intelligence Unit
Abstract
No abstract is available.
Topic
Politics, Background, Forecast, Political and institutional effectiveness
Political Geography
India

Political outlook: Political and institutional effectiveness

The outlook for political and institutional effectiveness in 2019-23 is mixed. The BJP dominates the political landscape at national and-increasingly-state level. The party has full control of the lower house, and its re-election in 2019 will help to bolster policy effectiveness. It has also been able to expand gradually its presence in the Rajya Sabha, where it is likely to gain a majority (with its NDA allies) in 2021. It will then be able to pass legislation without approval from the opposition. This will ease the passage of laws in parliament, although we believe that the BJP's growing dominance will also result in greater levels of corruption within the party.

Over the next few years the BJP is likely to suffer from anti-incumbency sentiment, which will be aggravated by increased collaboration between regional parties to oppose it at state level. This is likely to result in a weaker performance in state elections over the next five years, although the party will remain the dominant force within government in many states and its capacity to drive policy at the regional level will remain powerful.

The BJP has been an advocate of so-called competitive federalism, which encourages competition between India's states. We believe that this approach will lead to a notable improvement in political and institutional effectiveness in reform-oriented states, particularly in the south and the west. However, it is also likely to deepen economic disparities between India's more economically successful states and its laggards, increasing social friction, competition for fiscal resources and pressure for migration between regions.

The BJP's dominance of national and state politics will have a corrosive impact on institutional checks and balances within India during 2019-23. There have already been signs that the government has successfully pressured media groups to rein in critical coverage. The independence of the Reserve Bank of India (RBI, the central bank) has also been eroded. There remains a significant risk that the government will engage in a major confrontation with the judiciary at some point in the next five years, particularly if judges overturn a key policy decision, such as the move to revoke the special status of Jammu and Kashmir. Judicial challenges to the government's policies towards minority religions could also be a point of friction.

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