DSIJ Mindshare

Delhi Debacle Should Make BJP Get Its Focus Back

In fact the way the BJP government at the centre behaved and the manner in which it worked in matters of governance has clearly beamed out signals of arrogance and lack of transparency. When we go deep into the root cause of the complete mauling of the BJP in Delhi, it points toward the various decisions taken by the Narendra Modi-led government during the last eight months and how they have had a serious bearing on Delhi’s elections. The abrupt ‘shunting’ of Dr. Harsh Vardhan from the health to the science and technology ministry in November 2014 laid the foundation for such a crushing defeat of the BJP in Delhi. Though the shifting of Dr. Vardhan looked quite a normal governance exercise, it raised serious doubts about the pre-election plank of the BJP to provide corruption-free administration.

Actually Dr. Vardhan’s removal as Health Minister was linked to the axing of the chief vigilance officer of AIIMS, Sanjiv Chaturvedi, who initiated a CBI probe against many top officials of the AIIMS over various scams. Though political parties like the AAP were dead against the removal of Chaturvedi, he was shown the exit at the behest of ‘heavyweight’ BJP leader J P Nadda, who had written a letter to Dr. Vardhan for his removal. Media reports said that Chaturvedi had initiated a probe against a top official who was close to Nadda. Interestingly this was the first ‘corruption’ case involving the new Modi regime. Shockingly, instead of dousing the fire regarding this controversy, Nadda was elevated as Union Health Minister during the November Union Cabinet reshuffle. This of course didn’t go down well with the public in Delhi, who had admired Dr. Vardhan as non-political and clean leader, always working for social causes.

Meanwhile, the public and Delhi’s BJP workers kept their calm, assuming that Dr. Vardhan’s transfer may be an election strategy to pitch him as a chief minister candidate. Instead, he was ignored and ‘paratrooper’ Kiran Bedi landed just a week before the filing of nominations, and was immediately portrayed as a CM candidate by the party high command, thereby serving her Dr. Vardhan’s seat on a platter. No wonder this blew the lid off the BJP workers’ patience in Delhi and for all the campaigning that Bedi engaged in, she lost the seat from the ‘safest’ zone of Krishna Nagar. This was not the only instance when seasoned senior party leaders and workers were treated pathetically by the grand saffron party.

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During the last 8-9 months the perception about the party has changed dramatically. It now looks as too arrogant and overconfident, not only to its workers but to the people at large. Worse, this arrogance kept on increasing with each win in the assembly elections and the citizens of this robust democracy, particularly in the ‘media active’ city of Delhi, were forced to think that absolute power with few is not good for the country, even if it is with a popular leader like Narendra Modi. If we have to give one main reason to the BJP’s political turmoil in Delhi’s election, it is the overconfidence of the party that drubbed it completely. In fact the reason why Delhi elections had been suspiciously postponed by six months is beyond anybody’s understanding. This overconfidence cost the BJP a prestigious win as it gave Arvind Kejriwal vital time to re-strategize and re-energize his campaign and re-connect with Delhi voters after a disastrous show during the parliament elections.

He artistically drove a campaign in which he successfully portrayed that there can be a system where he and Modi can co-exist: Modi as PM and Kejriwal as CM. He used the last 8-9 months with full perfection to clean the slate of the voters’ mind regarding their perception about him as a fleeing “bhagora” character with the highly successful “sorry sabhas”. On the other hand, the BJP treated Kejriwal in the same manner the Congress had during the November 2013 elections. First, they completely ignored his untainted image and launched an attack based on the Rs 2 crore ‘suspicious’ donation issue at a time when money was flowing into the election and the media was bombarded with the BJP’s own advertising campaign running into crores of rupees.

Also, the move of personally attacking Kejriwal backfired miserably as it gave him the status of a victim in the eye of the common man. In fact, at the end of the campaign it boiled down to positive issue-based politics of the AAP where both Modi and Kejriwal can co-exist versus the negative and arrogant politics of the BJP. The choice for Delhi’s voters became quite simple. Add to this the misery of the BJP with issues like the Rs 10 lakh suit with the name of Narendra Modi interwoven in between; Amit Shah’s salvo regarding Modi’s promise to give Rs 15 lakh to every voter by reining in black money; the ‘naseebwala’ and ‘badnaseeb’ remark of the PM; putting the Union Cabinet’s ‘Naraini Sena’ against one man; and above all the controversial speeches of BJP leaders provoking Hindu sentiments – all of which made the middle-class distance itself from the saffron party.

However, just as every destructive phase has its positive impact, a mammoth party like the BJP should immediately take a positive learning out of this debacle. It is high time for the party to put the focus back on development and execution of policies and keep itself away from the political blame game. Contemporary voters, especially the middle-class, want concrete work on the ground rather than mere speeches and superficial cosmetic makeovers. That was the core reason Narendra Modi was unanimously chosen as the PM by the great Indian democratic society to give real wings of growth and prosperity to their aspirations. His proven track record of development and hard-core executioner in Gujarat is what swept the carpet from under the Congress in the general election of 2014.

As such, the BJP has to once again get back to the development plank with more impetus on fast and innovative execution of projects. Modi and the BJP must remember that he has been chosen by the Indian Diaspora to provide real solutions to their problems and undoubtedly he is the most admired and prolific leader of modern times. The Delhi election result is a good eye-opener for the BJP to shed arrogance and lethargy.

In this respect, there is lot at stake for the equity market market too what with great hopes having been built around the new government’s proactive stand on progress. Frontline as well various sectoral indices are trading at their lifetime high only due to this wave of hope. As our cover story this time on the quarterly results for three months ending December 2015 reveals, earnings are yet to pick up and there is a wide gap between valuations at which the markets are trading and earnings reported by India Inc. Our research team has sliced and diced nine sectors’ quarterly performance to help you understand how these different sectors are faring. One of the reasons for the subdued performance of India Inc. is the rise in interest rate. For BSE 500 companies, excluding financial companies, interest cost as percentage of revenue has increased from 4.1 per cent in the quarter ended December 2013 to 4.65 per cent for the quarter ended December 2014.

Nonetheless, the rate cut by the RBI in the month of January is a signal for further rate cuts in the current year. Our special report on the reversal of the interest rate cycle will give our readers a glimpse of how the interest rate-sensitive sectors will benefit with further cut in interest rates. In another special report we have tried to cover some of the key points you should look at to find out whether the markets are nearing their top. These are simple observations that will help you to take timely decisions on the stocks in your portfolio and exit them before they become bad investments.

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