Mandate 2014 decisively transformative

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2014 elections are going to be definitely transformative insofar as the socio-political landscape of the country is concerned. We see a decisive mandate and a stable government.

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Mandate 2014 decisively transformative

  1. 1. Mandate 2014 Decisively transformative Friday, 14 February 2014 Opinion by Vijay K. Gaba Evolutionary not revolutionary In our view, 2014 general elections are no ordinary elections. It is decidedly a referendum on the desire and commitment of people for change in the popular political and socio-economic discourse of the country. These elections will definitely mark the evolution of Indian democracy to the next level. It is however important to note that we do not expect any revolutionary changes; only some evolutionary ones. Political landscape of country has changed +91-22-24036039 http://investrekk.com Party/Group Projected Seats NDA 275 of which BJP 247 UPA of which Congress Others The political landscape of the country has changed materially in past decade. These changes mark the 2nd wave of political evolution in the history of independent India. 81 171 of whi ch Degeneration of socialists 97 AIDMK 29 TMC 27 Left Front 25 The socialist forces which successfully carried the anti-feudalism (read antiCongressism) crusade and fought for the cause of social justice and protection of religious minorities & economically backwards since early 1970’s have all degenerated into lower grade clones of feudal Congress. BSP 15 BJD 14 SP 10 RJD 8 Challenge to nationalist agenda of BJP JDU 7 The BJP has lost the exclusive claim over middle class morality and nationalism. The anti corruption movement in past 5years has swayed the urban and semi-urban youth and small entrepreneurs out of the BJP enclosure into a neutral territory. AAP 7 Congress decimated The base of the once only true national party has shrunk considerably. It has dissipated to become a marginal force in large states like UP, Bihar, Jharkhand, West Bengal, Tamil Nadu representing 40% of the Indian population. In 2004 & 2009 it could manage just ~16% of eligible votes. Total 543 You can send your comments on this report to the author at vijaygaba.investrekk@gmail.com AAP has opened up many possibilities The success of low cost, technology driven, decriminalized election model used by the Aam Aadmi Party (AAP) in recent Delhi assembly election has opened up many possibilities for civil society members, social workers and other middle class people with political ambitions. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Readers should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. InvesTrekk Global Research (P) Limited does not provide portfolio management, stock broking or any other fund based service. The investment ideas mentioned in this report are merely to illustrate the personal investment style and strategy of respective authors. The views expressed herein are personal views of respective authors and the company need not necessarily agree with all such views. Please refer to the important disclosures at the end of this report. © Copyright 2012 InvesTrekk Global Research (P) Limited. All rights reserved. InvesTrekk – Trekking the path less travelled and InvesTrekk are trademarks of InvesTrekk Global Research (P) Limited.
  2. 2. 14 February 2014 Politics a low ROI business now With crusade against corruption in public offices, misappropriation of national resources and discretionary powers of politicians gaining further strength the potential return on investment in contesting an election (ROI) is set to decline dramatically. This may eventually take out a large number of “technical politicians” out of the arena. People wanting stability, giving decisive mandate In past decade a trend has emerged whereby the people have mostly voted for continuity if the image of the leader is good. 13 chief ministers from 8 different parties are currently serving 2nd to 5th term. Incumbent PM is also serving second term (though he has made himself unavailable for 3rdterm). Expect 2014 election to throw a decisive mandate, unlike past seven general elections post 1984. Couple of things however would not change Regional identities and strong allegiance to caste, religion and region Even after 65years of becoming a political union, India is perhaps still merely the one. Little progress has been made in becoming a social and/or economic union. Consequently, a national approach to anything was conspicuous by its complete absence in general public discourse. People have strong allegiance to their caste, religion, locality, region and state, generally in that order. Little effort is being invested by local politicians, teachers, social workers, police or administrators in developing an “Indian” identity of people. A senior professional in Chennai very proudly illustrated that how in US and UK awareness about India is rising. People there now can tell a Tamilian from Gujarati or Punjabi. Corruption as a way of life The unfortunate fact is that common man in India is quintessentially noncompliant. This is not likely to change in next decade or may be two. If someone tells us that corruption as an idea is a “real” issue in this election – we beg to differ. Outlook for 2014 elections It is a two layered contest (a) between continuity of feudalistic politics dominated by vested interests & parochial considerations on one side and aspirations of common people on the other side; and (b) within various political organizations, between status quoits and progressive elements. No one remains neutral This election is akin to the epic war of Mahabharata. In Mahabharata nobody could remain neutral. All need to take a side – right or wrong only time will tell. We therefore expect record participation, intense battle and decisive outcome. 2
  3. 3. 14 February 2014 A definitive wave in favor of Modi We see a definitive wave in favor of Narendra Modi. This however could not be convincingly said for BJP. Deriving from our Discover India tour last summer, recent tour of North and East India, intensive discussions with workers from all parties, serious political observers (not the TV studio types), and trends in social media – We believe that NDA is positively poised to get 272+ seats. It is important to highlight here that unlike 1977 and 1989, the wave this time is not manifesting in terms of street shows. Nevertheless it is much more intense and pervasive. Deriding the strong public opinion as manufactured social media gimmicks would be a mistake; a serious one. Acid test for Indian National Congress; will pass Most opinion polls conducted so far have indicated decimation of Congress Party in the forthcoming polls. Our assessment is that Congress may fare worse than the most opinion polls have projected so far. It may win the lowest number of seats ever. But the number of seats it wins in Lok Sabha is not the most important things. It has many more serious challenges to face. The story may however not end with weakening of Congress Party in these elections. Rather a new chapter, indeed a very interesting one, may begin. As a weakened Congress Party losses its feudal and dynastic image, the genuine socialists who have completely abandoned the Party in past four decades may embrace it again provided the young leadership walks the talk and co-opts the idea of AAP into present organization and advance it forward. We see more chances of Gandhians like Anna Hazare supporting a reoriented Congress rather than degenerated AAP. Other parties to be marginalized In pre-independence era the socialist movement had largely been a sub-plot of larger Indian National Congress movement. The independent socialist movement in the country gained nationwide prominence after Mrs. Indira Gandhi managed to defeat the Gandhian voices within Congress. Over past decade or so, however this movement has completely degenerated. Most of these parties now distinctly appear lowly clones of Congress Party. In our view, post 2014 election these parties will be surprisingly marginalized and begin their journey to extinction. The journey may be long (couple of decades) but path is straight and clear. AAP as an idea to grow faster and further AAP as a neo socialist Idea has emanated from the multiple Gandhian socialist movements carried out by civil society members in past two decades. Given that the classical socialist movement in the country has lost appeal there is tremendous potential for this idea to succeed. The idea of AAP seeks to establish the dominance of educated middle classes over political domain for the welfare of poor and deprived. Though the actions of AAP Party so far looks distinctly Maoist, the idea has indelible mark of US political system, especially Democrats. 3
  4. 4. 14 February 2014 The goal post for 2014 elections has shifted much further and higher both in terms of quality (agenda) and quantity (vote share & seats). Mandate 2014: Decisively transformative In summer of 2013 Rs100cr (one billion) in box office collection was indisputable benchmark for a Bollywood blockbuster. A few months later, Salman Khan starrer “Jai Ho!” earning little over Rs100cr is a major disappointment. What has changed? Amir Khan starrer “Dhoom-3” has shifted the goal post dramatically higher to Rs500cr. Remember, this is same Amir Khan who had earlier set the Rs100cr benchmark with 3-Idiots and Ghajini. A somewhat similar script is being played out on Indian political stage. The goal post for 2014 elections has shifted much further and higher both in terms of quality (agenda) and quantity (vote share & seats). This election in our view is going to be definitely transformative. What has changed? Political landscape 2014 elections are most important since 1977. The political landscape of the country has changed materially in past one decade, more so since 2009 elections. These changes mark the second wave of political evolution in the history of independent India; the first wave that came in early 1970’s with JP leading a massive socialist movement against authoritarian rule of the then prime minister Mrs. Indira Gandhi, has since waned. Some of the drivers of changes in political landscape are: • eruption of massive public angst against corruption in public offices consequent to some highly publicized corruption cases; • persistent inaction & poor-governance and consequent deterioration of economic conditions and rise in economic disparities; • removal of entry barriers to active politics with emergence of AAP in Delhi state elections; • active participation of both elite and middle class people in politics, something not seen since pre-independence Swadeshi Movement; • blurring of ideological boundaries between parties leading to wider acceptance for personality based electoral contest; • massive electoral success of Mamta Banerjee and popularity of Jagan Reddy weakening the feudal elements within Congress party, prompting youth leader Rahul Gandhi to rebel and take charge to transform the GoP into a progressive democratic organization; • diminution of the relative importance of traditional religion and caste issues in political discourse with economic issues taking the center stage; • degeneration of communist movement into mostly violent Maoist movement; • unprecedented change in demographic profile of voters that has led to larger participation of public in democratic process; and • disproportionate rise in the role of (social) media as opinion influencer. 4
  5. 5. 14 February 2014 Key emerging trends It is imperative to highlight here some key trends that have emerged from the changes taking place in the Indian political landscape: the socialist forces which successfully carried the anti-feudalism crusade and fought for the cause of social justice, and protection of religious minorities & economically backwards since early 1970’s have all degenerated into second grade clones of feudal Congress. Degeneration of socialists Firstly, the socialist forces which successfully carried the anti-feudalism (read anti-Congressism) crusade and fought for the cause of social justice and protection of religious minorities & economically backwards since early 1970’s when Mrs. Indira Gandhi sought to transform the Indian National Congress into Congress (Indira), have all degenerated into lower grade clones of feudal Congress. Many of them are now seen close to Congress (except during the election season); pursue the traditional vote bank politics seeking to create a divide in society on the basis of caste, religion or region; and are driven by the personality of the leader rather than idea or ideology. Though, their purpose is still far from achieved, the process of extinction of traditional socialists (read splinters of JP movement) may likely begin with 2014 general election and shall be completed in next couple of decades. The space vacated by these so-called left of center forces could be occupied gradually by neo-socialists like AAP and a re-organized Congress (We shall deal with this subject a little later.) Challenge to nationalist agenda of BJP 2014 elections will be remembered as “elections won or lost by Narendra Modi.” The BJP has lost the exclusive claim over middle class morality and nationalism. The anti corruption movement in past 5years has swayed the urban and semi-urban youth and small entrepreneurs out of the BJP enclosure into a neutral territory. AAP has definitely shown them an alternative path, though not many may want to take this less traveled path immediately. Narendra Modi, in a very high risk wager, is trying hard to retain BJP’s traditional core support base, acquire a part of the socialist territory, and at the same time marginalizing the parochial and dogmatic elements within BJP to create a new look centralist organization. In his endeavor he appears to have whole hearted support of business community, especially industrialists. The support from the large working class (laborers and farmers) and religious minorities is still underwhelming. A successful campaign would provide the country a sustainable alternative to Indian National Congress, whereas a failure could seriously jeopardize Modi’s national ambitions and put question mark on BJP’s ability to provide a viable national alternative. Nonetheless, 2014 elections will be remembered as “elections won or lost by Narendra Modi.” Congress faces a bigger challenge from within than from outside. Reorientation of Congress Post independence the Congress Party has mostly been dominated by erstwhile feudal lords, landlords and industrialists. Despite conspicuous changes in the socio-economic landscape of the country since 1989, it has failed to re-orient itself. 5
  6. 6. 14 February 2014 Consequently, the base of the once only true national party has shrunk considerably. It has dissipated to become a marginal force in large states like UP, Bihar, Jharkhand, West Bengal, Tamil Nadu representing 40% of the Indian population. In 2004 & 2009 it could manage just ~16% of eligible votes. Consistently declining support base has led to widening of chasm between old feudal lordship within Congress Party and the ambitious youth in past few years. Disastrous performance in 2013 assembly elections has embolden both the camps and brought the divide in full public view. The youth brigade led by Rahul Gandhi has been seen attempting to take control of the Party and reorient it to the ground realties. Rahul Gandhi in “acknowledgement of defeat” press interaction post December 2013 assembly elections, highlighted that the feudal elements in Congress Party have not heeded to his suggestion of changing the way party has traditionally worked. He said that he would pursue his agenda more aggressively going forward. The myth that Gandhi family is the most powerful force in the Congress Party is about to explode, detonated by none other than Rahul Gandhi himself. The fear is that absence of any recognized national level leader outside Gandhi family may encourage more secession on lines of Sharad Pawar, Mamata Banerjee, Jagan Reddy, et al. This could be especially true in the case of states where Congress enjoys reasonably higher vote share but is doing consistently poorly in terms of electoral wins, e.g., UP, Madhya Pradesh and Gujarat. This election will perhaps also explode the most popular myth that Gandhi family is indisputably the most powerful force in the Congress Party and perhaps in the country also. In our view, the Gandhi family, in post Indira era, derives its power from the insidious design of the feudal elements within Congress and not necessarily from its governing ability, political acumen or inheritance. These elements fully aware that (a) they are no longer in position to gain power in their respective states on their own; (b) there is little that can keep them together and (c) without power their existence will be endangered – use Gandhi family as an adhesive to keep them together and an emotional bait for the electorate. The practice has seen many rebellions even after failure of Sitaram Kesari experiment in mid 1990’s – Sharad Pawar and Mamta Banerjee being the most successful. Jagan Reddy, Kuldeep Bishnoi etc. will need to prove their mettle in 2014. 2014 elections will determine how fast and how far Rahul Gandhi’s endeavor to transform Congress Party into a genuine socialist movement will succeed. The indications so far are that he sincerely wants to break away from the clutches of feudal lords dominating the decision making within Congress Party (and UPA government) and encourage a larger participation. The show of anger at Press Club to protest against law to prohibit convicted persons from contesting elections and fiery speech at AICC January session in New Delhi that invoked all Congress legislatures to assert their powers are some pointers to Rahul Gandhi’s rebellion against feudal forces within Congress. 6
  7. 7. 14 February 2014 AAP has opened up many possibilities Now many would not mind our children opting politics as a career. The success of low cost, technology driven, decriminalized election model used by the Aam Aadmi Party (AAP) in recent Delhi assembly election has opened up many possibilities for civil society members, social workers and other middle class people with political ambitions. This section of the society always wanted to make positive contribution to the country and society. However, they stayed away from electoral politics as it was deemed to be an expensive affair and meant only for the powerful (rich or criminal). With entry barriers substantially lowered, there is tremendous rush to join AAP and contest elections. Not many of them may win elections this time. But the trend is certainly encouraging. Unlike AGP in Assam and TDP in Andhra Pradesh which were exclusively local movements, the idea of AAP indubitably has a national character and therefore more likely to sustain. However, the key would be to give it an open architecture to make it scalable like the Indian National Congress in pre independence era. An attempt to patent it by few individuals would make it worse than BSP. Remember, BSP began as forceful common man movement but soon degenerated into a fiefdom of select individual(s). Politics becoming a buyers’ market, with low ROI It is no longer about a few powerful people deciding what people need and what they should be given. Another key highlight of 2014 election is that the agenda for the election is being totally directed by voters, certainly a first in Indian political history. It is no longer about a few powerful (mostly unconnected) people deciding what people need and what they should be given. Most parties are forced to go to people and ask what they want and draft their manifestos accordingly. Some parties are even talking about multiple local manifestos to address specific problems of a region or state. Not unreasonable to assume a decisive mandate after 25years of fractured verdicts. Moreover, with crusade against corruption in public offices, misappropriation of national resources and discretionary powers of politicians gaining further strength the potential return on investment in contesting an election (ROI) is set to decline dramatically. This may eventually take out a large number of “technical politicians” out of the arena. People wanting stability, giving decisive mandate In past decade a trend has emerged whereby the people have mostly voted for continuity if the image of the leader is good. 13 chief ministers from 8 different parties are currently serving 2nd to 5th term. Incumbent PM is also serving second term (though he has made himself unavailable for 3rdterm). In most elections in past three years, voter turnout had been high and mandate decisive, except a couple of cases like Delhi and Uttrakhand. It would not be completely unreasonable to assume that 2014 election will throw a decisive mandate, unlike past seven general elections post 1984. 7
  8. 8. 14 February 2014 What would likely not change? Regional identities and strong allegiance to caste, religion and region While the diversity of India is celebrated world over as a cultural phenomenon, it has not found its due place in the economic policies and programs. During our India Discover trip last summer, traversing through the incredibly wonderful landscapes and meeting over 10000 people across 17 states we shockingly discovered that even after 65years of becoming a political union, India is perhaps still merely the one. We have made little progress in becoming a social and/or economic union. Consequently, a national approach to anything was conspicuous by its complete absence in general public discourse. This state of affair is clearly reflected in diverse socio-economic conditions of different states, and in many cases of various regions within a state. We discovered that people have strong allegiance to their caste, religion, locality, region and state, generally in that order. The concept of “Indianness” was totally absence from daily routine. Nationalism is mostly invoked on select occasions like Independence Day or Republic Day. We found little effort being invested by local politicians, teachers, social workers, police or administrators in developing an “Indian” identity of people. A senior professional in Chennai very proudly illustrated that how in US and UK awareness about India is rising. People there now can tell a Tamilian from Gujarati or Punjabi. In our view, therefore, any program, policy, idea or strategy that is formulated purely from a national viewpoint has little chance of successful implementation in India. To be successful, the programs, policies and strategies have to be formulated and implemented at the smallest administrative unit level, e.g., village panchayat or town municipality. The debate over decentralization of power to local units is relevant and needs to be pursued in right earnest. Corruption as a way of life We rarely mind corruption if our children get admission in a good school/college through backdoor; if we get our passport without waiting in queue; if we could construct an additional room in our house without permission; or if we could encroach upon the pavement in front of our house/shop; In a recent interview the famous British journalist Mark Tully said that the only thing that works for politicians in India is the feeling of electorate “Mera Aadmi hai, mera kaam karega” (he is my man, will do my work). The unfortunate fact is that common man in India is quintessentially noncompliant. Non-payment of taxes and utility dues, encroachment of public land (parks, streets, pavements), illegal construction in legal colonies, traffic violations, illegal phone connections (parent giving their phones to underage children), under-age driving, incompetence and antiquated skills of public servants, littering in public places, child labor, illegal commercial activities in residential areas are some common examples of non-compliance. No one minds corruption if his child gets admission in a good school/college through backdoor; if he gets his passport without waiting in queue; if he can construct an additional room in his house without permission; if he could encroach upon the pavement in front of his house/shop; if he can dig a deeper borewell in his house or put a powerful motor in his water supply line when his neighbors’ taps go dry. This is not likely to change in next decade or may be two. If someone tells us that corruption as an idea is a “real” issue in this election – we beg to differ. 8
  9. 9. 14 February 2014 Outlook for 2014 elections This election is like the epic war of Mahabharata. In Mahabharata nobody could remain neutral. All need to take a side – right or wrong only time will tell. We expect record participation, intense battle and decisive outcome. No one can remain neutral 2014 general elections are no ordinary elections. It is decidedly a referendum on the desire and commitment of people for change in the popular political discourse of the country. It is a two layered contest (a) between continuity of feudalistic politics dominated by vested interests & parochial considerations on one side and aspirations of common people on the other side; and (b) within various political organizations, between status quoits and progressive elements. The outcome of these elections is widely seen as determinant for the course of India’s journey into 21st century. Given that apparently there is no consensus within parties on the direction of the change – it is inevitably going to be contest about personalities rather than parties and ideologies. Most people we spoke to compare this election to the epic war of Mahabharata. In Mahabharata nobody could remain neutral. All need to take a side – right or wrong only time will tell. We therefore expect record participation, intense battle and decisive outcome. A definitive wave in favor of Modi The risk here is that many of the electorate may cast their vote just to assert their newly found political expression, without actually intending to usher a change or bothering about the consequences. During InvesTrekk team’s latest intensive tour of 73 constituencies in UP, Bihar, Uttrakhand, MP and Delhi, we felt a definitive wave in favor of Narendra Modi. This however could not be convincingly said for BJP. Under these circumstances candidate selection and addressal of local issues in election manifesto of BJP will be critical. Deriving from our Discover India tour last summer, recent tour of North and East India, intensive discussions with workers from all parties, serious political observers (not the TV studio types), and trends in social media – We believe that NDA, is positively poised to get 272+ seats. With some extra effort and prudent candidate selection, BJP crossing 250 mark on its own is very much probable. It is important to highlight here that unlike 1977 and 1989, the wave this time is not manifesting in terms of street shows. Nevertheless it is much more intense and pervasive. Deriding the strong public opinion as manufactured social media gimmicks would be a mistake; a serious one. Moreover, it is not just social media, we witnessed it everywhere – schools, collages, offices, market place, drawing rooms, social gatherings and kitty parties. In previous elections (except perhaps 1977), many people would just want to listen to various opinions about the likely political scenario post election without being actually concerned. This time however it’s definitely different. Most people have strong opinions and are concerned about the outcome of impending election. This, in our view, is an encouraging sign for the strength and vibrancy of our democracy. 9
  10. 10. 14 February 2014 Acid test for Indian National Congress; will pass The Congress Party may weaken considerably in these elections. But the story may not end here. Rather a new chapter, indeed a very interesting one, shall begin. The idea of Indian National Congress will survive and gain further traction, as the degenerated socialists vacate the space. Most opinion polls conducted so far have indicated decimation of Congress Party in the forthcoming polls. Our assessment is that Congress may fare worse than the most opinion polls have projected so far. It may win the lowest number of seats ever. But the number of seats it wins in Lok Sabha is not the most important things. It has many more serious challenges to face. For example consider the following: • Unlike 1977 and 1989, when Congress lost power to somewhat united opposition, it could still manage to retain strong regional footprints. Now, it is a marginal force in large states like UP, Bihar, Jharkhand, West Bengal, Tamil Nadu representing 40% of the Indian population. In 2004 & 2009 it could manage just ~16% of eligible votes, this time the tally might be even lower. • With its support base weakening, it may be forced to make alliances with stronger regional parties like NCP, DMK or BSP on unfavorable terms or ally with unpopular parties like RJD, JMM or RLD which further damages its image. The success will depend on how it co-opts the idea of AAP into present organization and advance it forward. This (a) leaves it with even fewer seats to contest and hence diminished chances of winning; and (b) discourages the party workers who with the shrinking pie see little chances of fulfillment of their political ambitions. Hence with Congress likely out of power for 5years, much reduced strength in Rajya Sabha and only a few states under its rule (forecasts suggest it losing Andhra Pradesh and Maharashtra too, leaving it with just two big state under its rule, i.e., Assam & Kerala) the already meager cadre may further splinter away, making a comeback even more unlikely. • With Narendra Modi at the helm for 5years, the secularism vs. communalism debate might become redundant, breaking the very fulcrum of opportunist alliances that have kept Congress and some regional parties like RJD in contention since mid 1990’s. In our view, however, the story may not end with weakening of Congress Party in these elections. Rather a new chapter, indeed a very interesting one, may begin. We believe that the idea of Indian National Congress is still relevant and will survive loss of Congress Party, more so, as the degenerated socialists vacate the space. Rahul Gandhi or no Rahul Gandhi. As a weakened Congress Party losses its feudal and dynastic image, the genuine socialists who have completely abandoned the Party in past four decades may embrace it again provided the young leadership walks the talk and co-opts the idea of AAP into present organization and advance it forward. We see more chances of Gandhians like Anna Hazare supporting a reoriented Congress rather than degenerated AAP. In the meanwhile, we might see some Kamraj, Morarji Desai, Jagjiwan Ram, Biju Patnaik, Sharad Pawar, Mamata Banerjee, Jagan Reddy, Mohammed Alimuddin and Bhajan Lal sort of rebellion against the family. 10
  11. 11. 14 February 2014 Other parties to be marginalized Indian National Congress is the most suitable candidate for carrying forward the socialist agenda. In pre-independence era the socialist movement had largely been a sub-plot of larger Indian National Congress movement. Post independence, disagreeing with Nehruvian elite socialism, Gandhian socialist like Kriplani and Lohia parted ways with Congress Party and created an independent socialist movement under miscellaneous banners like Praja Socialist Party. The influence area of these parties was however limited to few regions. The independent socialist movement in the country gained nationwide prominence after Mrs. Indira Gandhi managed to defeat the Gandhian voices within Congress by successfully suppressing the inner party democracy. The movement started by prominent socialist leaders like Madhu Limaye, Madhu Dandavate, Karpuri Thakur, George Fernandez, duly complimented by the communists movement, was carried forward by Mulayam Singh Yadav, Kanshi Ram, Lalu Prasad Yadav etc. Over past decade or so, however this movement has completely degenerated into opportunism afflicted with all the traits of feudalism which once led to the degeneration of Indian National Congress. Most of these parties now distinctly appear lowly clones of Congress Party. In our view, post 2014 election these parties will be surprisingly marginalized and begin their journey to extinction. The journey may be long (couple of decades) but path is straight and clear. AAP as an idea to grow faster and further The idea of AAP seeks to establish the dominance of educated middle classes over political domain for the welfare of poor and deprived. Though the actions of AAP Party so far looks distinctly Maoist, the idea has indelible mark of US political system. The problem lays with people not the Idea. AAP as a neo socialist Idea has emanated from the multiple Gandhian socialist movements carried out by civil society members in past two decades. Given that the classical socialist movement in the country has lost appeal due to variety of factors (like lack of effective leadership, low appeal to ambitious youth, lack of national appeal for any party, reduction in social inequalities and poverty level, etc.) there is tremendous potential for this idea to succeed. The idea of AAP seeks to establish the dominance of educated middle classes over political domain for the welfare of poor and deprived. Though the actions of AAP Party so far looks distinctly Maoist, the idea has indelible mark of US political system. In our view, AAP as an idea will grow much faster and further than splinters of Janta Party (ex BJP) and BSP; as unlike conventional socialist parties, it has acquired a definite national character. We are not sure, how long AAP as a political party will last, given the poor organization and egotist leadership. As of now, both BJP and Congress Party are in a position to co-opt the AAP idea into their strategy. But in our view a weakened Congress post election would be more receptive towards it. History also supports Congress as natural suitor for the Idea. 11
  12. 12. 14 February 2014 Seat projection Based on our Discover India tour last summer, recent tour of North and East India, intensive discussions with workers from all parties, serious political observers (not the TV studio types), trends in social media and analysis of trends in previous elections, we project the following seats for various parties and groups. Party/Group NDA of which BJP UPA of which Congress Others of which AIDMK TMC Left Front BSP BJD SP RJD JDU AAP Total Projected Seats 275 247 97 81 171 29 27 25 15 14 10 8 7 7 543 Important notes 1. It is critical to note here that these projections are not based on any scientific sample survey. These are purely on the basis of the subjective assessment of our team members who have traversed through the country for past one year, spoken to people, both common and elite. 2. We have built a wave in favor of Modi in the projection. Though, at present the wave does not exist in favor BJP as such. 3. The results may vary materially (upto 60 seats less for BJP) if BJP falters in candidate selection or some major negative condition erupts for Modi and/or BJP in next couple of months. 4. If NDA fails to cross 250 mark on its own, it will extremely difficult for Modi to occupy 7RCR. (a) Most regional politicians facing the prospects of extinction should a stable government be formed at center, would make all possible efforts to prevent BJP from forming a government. Congress would only be too glad to repeat what it did in Delhi recently. (b) Even if the so called “others” fail to unite together, some of them will negotiate with BJP a face saving formula which would include a PM other than Modi. 12
  13. 13. 14 February 2014 Our coverage of 2014 election so far India Discover series (Click on the following links to read) Anxiously Indifferent Karnataka& Delhi Goa, Punjab and Haryana Gujarat Rajasthan Uttar Pradesh –I Uttar Pradesh - II Madhya Pradesh Chhattisgarh Bihar West Bengal Andhra Pradesh 20 Program: Agenda for 2014 election Modi Vs. Rahul Corruption Matters, Alas! Not the way it should Reforms ain’t mean the same for Delhi and Sangli Mandate 2014 – Tamil Nadu: zillion deities keep them happy Other election related posts Modi in a Chakravyuh In this Mahabharata no one shall remain neutral An election about personalities and egos India needs a true coalition, even if it means a third front Are we headed towards “mob-rule”? – Part III Are we headed towards “mob-rule”? – Part II Are we headed towards “mob-rule”? Twist in stomach Would AAP too pass? Positioning for May 2014 What to expect from the new government post 2014 elections Congress losses semi final; captain retired hurt How to play Modi rally? Great hopes - III Great Hopes - II 13
  14. 14. 14 February 2014 Great hopes! Follow the leader Ganpati is son of Shiva Whatever goes around comes around Letter to Mr. Narendra Modi Congress has much more to worry than mere losing Mandate 2014 - PM Modi Modi PM – Concluding part Modi PM – Part V Modi PM – Part IV Modi PM – Part III Mandate 2014: Modi PM – Part II Mandate 2014: Modi PM – Part I 14
  15. 15. 14 February 2014 Important disclosures InvesTrekk Global Reseach (P) Ltd, does and seeks to do business with companies and people mentioned in this report. Though, the author(s) has/have categorically certified that the views expressed in this report accurately reflect his/their personal views about the subject securities, issuers and persons mentioned herein, the readers should notwithstanding be aware that the company may have a conflict of interest that could affect the objectivity of this report. Readers should consider this report as only a single factor in making their investment decision. This research report provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other financial instrument or any derivative related to such securities or instruments (e.g., options, futures, warrants, and contracts for differences). This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Any decision to purchase or subscribe for securities in any offering must be based solely on existing public information on such security or the information in the prospectus or other offering document issued in connection with such offering, and not on this report. Investments in general and, derivatives, in particular, involve numerous risks, including, among others, market risk, counterparty default risk and liquidity risk. No security, financial instrument or derivative is suitable for all investors. 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