As the Congress wonders whether to exercise the most dubious of ruling-party privileges — the right to time a general election — the party may convene a kitchen cabinet. Members of this select group would be fretting over rice, cooking oil, ghee, etc.Food prices are rising, in India and around the world, and they must now be factored into any calculation on desirable election dates. Rice, edible oil and dairy product prices should already be on every serious politician’s radar. True, wheat prices are flatlining in India, and pulses and sugar are less costly now than a year back. But in the context of the global food price rise that is expected to stay with us in 2008, and a domestic supply chain as rusty as ever, only the very brave will predict that between now and, say, October-November — the early election date, apparently — a more generalised food price inflation may not happen. One must remember in this context that the official story, that most aam aadmi voters can be supplied via controlled PDS prices, is a fiction. Most voters buy from the open market.So it would be Sonia Gandhi’s unenviable job to guess to what extent how India eats would determine how India votes. Here, she may want to consider interesting variations to the inflation-is-vote-loser story. First, will voters blame more the incumbent at the Centre or those at the states in case general elections are held when the price of rice is an issue? Recent national election verdicts seem almost a sum of state-level voter decisions. But no one knows whether this will or won’t hold in the context of a major inflationary episode.Second, there can be local variations in the inflation experience. Look at the price indices that apply to industrial workers and non-manual urban employees. These are computed city-wise, and the differences between urban centres may warrant serious political attention when formulating strategy.Third, that inflation hurts the rural poor is another conventional wisdom that should be reconsidered partly. In areas of states where the rural jobs programme is working, and therefore significant cash transfers have happened, real wages (money wages adjusted for inflation) may increase. But will the Congress get credit for this if it is not the state-level incumbent?Interestingly, this state-Centre signal problem impacts another election decision variable, the budget’s farm loan waiver. The Congress is probably most desperate to do electorally well in the Hindi heartland. But most institutional farm credit is concentrated in the south and west. Even if the loan waiver works well as a vote getter, the fact that farm loans are not preponderant in Uttar Pradesh and Bihar may mean that Rs 60,000 crore will not buy what the Congress needs most.Whether these economic sub-stories will politically matter in an early election decision may depend on the extent of food price inflation. If it is really serious by October-November, the following logic may seem attractive to the Congress. Elections in scheduled time, April-May 2009, would mean the government gets more time to try and manage supplies. Depressed global demand, thanks to an America-led global slowdown, may dampen world food prices and world food production may rise, responding to today’s high prices. So, the Congress will say, let’s wait.Readers will notice that we have kept some obvious election date determinants out of the discussion. One is whether to time a general election with assembly elections in Madhya Pradesh, Rajasthan, Chhattisgarh, Delhi and Karnataka. The BJP faces state-level anti-incumbency in the first three states. But food prices will complicate that calculation. Second, nuclear deal politics. Your correspondent humbly presents the hypothesis that nuclear deal politics is more complicated than the nuclear deal itself. Apparently, a section of the Congress reckons that one-slice-at-a-time strategy may work: having had discussions with the International Atomic Energy Agency on nuclear safeguards, now let’s go to the IAEA board, after that the ball’s with the Nuclear Suppliers Group. If those bridges can be crossed, references can be made to the fact that, with the idea of nuclear disarmament coming back into fashion and with the possibility of a Democrat in the White House in 2009, there is no better time for nuclear nationalism than in the next few months. Will the Left buy this? No idea. But even nuclear deal politics can get subsumed by price politics. Dearer food may give the Left a more electorally palatable excuse to attack the Congress.So far so complicated. Now let us consider the elephant in the room factor: economic growth. The Congress has spent four years ignoring 9 per cent GDP growth, assuming high growth doesn’t buy votes. Growth is faltering now, mostly because 2007’s high interest rate policy has had its predictable impact. That policy was wrong: inflation then, as now, was driven by the commodity supply constraint and a credit squeeze was a blunt instrument.But now that the economy is sputtering, should the Congress notice the elephant in the room? The thing is that a lot of non-rich/non-poor people are riding the elephant. They have home loans that carry extortionate interest rates, they have new jobs created by the boom that may be threatened and they have acquired an optimistic outlook that may get punctured.Can a safe assumption be made that these people won’t bother to vote in numbers? There are signs the Congress has noticed the elephant. But the mahout is in Mumbai. Will the RBI cut rates soon enough, by enough amount and not panic again if food prices keep rising for a while? Again, no one knows. If the Congress gives economic growth its political due, and assuming the RBI obliges, the party’s election date analysis will be influenced by when signs of a recovery consolidate. It typically takes at least two quarters for a monetary stimulus (or a cold shower) to start showing up in better (or worse) economic numbers. Consolidation of better economic news plus the possibility that time will tame the food-price inflation may reinforce the case for an April-May 2009 election.So much economics to factor into election date calculations, good thing for the Congress that its prime minister is an economist. Except that when the PM was the FM, in the mid-nineties, and when the chief of his economic advisory council now, C. Rangarajan, was the RBI governor, a massive credit squeeze was applied to kill inflation. Economic growth tanked after that. The Congress? It lost the elections.saubhik.chakrabarti@expressindia.com
