India: Political and institutional effectiveness

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Country Data and Maps
Economist Intelligence Unit
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Politics, Background, Forecast, Political and institutional effectiveness
Political Geography

Political outlook: Political and institutional effectiveness

The outlook for political and institutional effectiveness in 2020-24 is mixed. The BJP dominates the political landscape at national and-increasingly-state level. Some members of state legislative assemblies have defected to the BJP. The party has full control of the lower house, and its re-election in 2019 will help to bolster policy effectiveness. It will soon attain a simple majority in the Rajya Sabha, after which it will 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.

Support for the BJP and Mr Modi has been relatively high in 2020, as the government acted swiftly to implement a lockdown to limit the spread of the coronavirus. However, that support might weaken as the toll exacted on the economy by the measures becomes more pronounced. However, the administration will actively pursue its Hindu nationalism agenda to woo supporters. Since we do not believe the BJP can go too far in pushing forward labour law and land acquisition reform, we expect it to win a few more state elections within the forecast period, which will help it to consolidate its power.

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 2020-24. 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 (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 J&K in 2019. Judicial challenges to the government's policies towards minority religions could also be a point of friction.

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