Yogi's Big Challenge

India can't succeed unless UP does. Re-elected CM's key job is to get industrial investment

- Arvind Panagariya

Now that the dust has settled, it is time to take a cool look at why so many analysts keep getting election predictions wrong. The key reason in my view is that they remain stuck in the past and continue to rely on the politics of caste, community, and religion to reach their conclusions. But these factors lost their predictive power long back.

In the days when per-capita incomes grew 2% or less annually with no perceptible improvement in the lives of people taking place, the centuries-old Indian fatalism ruled, leading them to vote with their caste. But as Jagdish Bhagwati and I wrote in a 2004 article, reforms demonstrated to the electorate that better governance and faster growth could bring about rapid change in their economic fortunes. That demonstration led to a "revolution of rising aspirations" among voters. Henceforth, they would reward governments that delivered superior governance and growth outcomes with re-election while bundling out those that didn't.

Later, my work with economist Poonam Gupta found considerable empirical support for this hypothesis. As example, voters returned UPA back to the office in 2009 but gave it the boot in 2014. They handed victory to BJP that year and went on to return it to office in 2019. At the state level, an aspirational India returned to performing governments multiple times in states such as Odisha, Bihar, and Gujarat while trouncing out non-performing ones after one term in Rajasthan, Punjab, Tamil Nadu, and, until recently, Uttar Pradesh.