Five years ago, the right-wing BJP was the first party to try to actually campaign for re-election on the basis of its performance. "We've delivered 8% growth," they said, "put us back into office." But the Indian electorate threw them out anyway -- it turned out that the 8% growth rate was misleading. Cities had boomed, but the rural areas were stuck in a cycle of poverty and rural voters turned out enmasse to vote the city-favoring bums out of office.
What would the left-wing Congress party, now in power, do? Would they go back to a state-planned, "Hindu" rate of 2% growth that yielded plenty of opportunities for corrupt patronage? Congress decided to keep priming the business pump (growth averaged 9% the last 5 years) while targeting development funds and job-creation schemes at rural areas.
The results are now in, and:
Dr. Singh will be the first Prime Minister since Jawaharlal Nehru to be voted back after a five-year term.Amazingly enough, even dysfunctional state goverments like West Bengal have gotten a kick in the rear end. Indian parties now have a blueprint -- balancing growth with social justice -- for how to stay in office.
This might just change the incentives for politicians in India: growth in India has come in business sectors that can thrive inspite of poor governance. Perhaps, now, India will start to get businesses that will thrive because of good governance.