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Polls Apart

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Here’s a conundrum that both the mainstream political parties in India face in the Karnataka elections this May: since 1980, the party that won the elections in Karnataka ended up on the Opposition benches in the Lok Sabha in New Delhi (Karnataka is the first of five major states that go to the polls ahead of the national elections in 2014).

The incumbent Bharatiya Janata Party (BJP) in the state is riven with dissent and factionalism, and faces public anger at the corruption scandals surrounding former chief minister B.S. Yeddyurappa. The Congress party isn’t without its own problems.

But from an economy standpoint, the state’s GDP growth in 2012-13 (FY13) will be about 5.9 per cent, better than the national growth rate. According to the FY13 Economic Survey of Karnataka, despite a drought in large parts of the state, agricultural output grew by 1.8 per cent compared to a contraction of 2.2 per cent in FY12.

Agriculture contributes 15 per cent to the state GDP (SGDP), industry 26 per cent and services 59 per cent. While growth in agriculture is declining, there is no commensurate decline in the growth of the labour force employed in agriculture, and that, according to the budget presented by chief minister Jagadish Shettar in February, is cause for concern.

Manufacturing is expected to grow, too, but slower. Services will grow at nearly 9 per cent. That helps the government run a small surplus on its revenue account, and keep its fiscal deficit (just) below 3 per cent; it’s not a big borrower, staying within the 25 per cent limit on public debt as a percentage of SGDP, and limiting interest payments to 10 per cent of revenues.

But the challenges are not just about macroeconomics; there is uneven development, poor basic services like water and power, and the atrocious state of public infrastructure, besides public safety. And that’s been the case no matter which political party ran things.

On the face of it, governments have managed the state’s finances reasonably well. Its fiscal indicators are good. It is rated the highest among all states by rating agencies — AA- or its equivalent.

The BJP government takes credit for that. “Look at what we’ve achieved in the Global Investors Meets (Karnataka’s version of Vibrant Gujarat),” says Ganesh Karnik, retired army captain and BJP member of the Legislative Council. “It’s not just Gujarat; we have done even better.”

Here, he may be right. Reserve Bank of India (RBI) statistics suggest that during the 2000-12 period, Karnataka was the third largest destination for FDI, with a cumulative investment of $10.14 billion, after the Mumbai region’s $57.25 billion and the National Capital Region’s $34.41 billion. Gujarat comes in fourth at $8.32 billion. Per capita GDP in the state is above Rs 78,000 a year; again, better than Gujarat’s Rs 65,000.

But all the economic growth has been accomplished at the expense of uneven development. Over the past decade, the demographic of the state has been changing. The 2011 census showed that over the previous decade, the population had grown by nearly 16 per cent, but rather unevenly. “Bangalore’s population has grown by 46 per cent (2001-11),” says V. Ravichandar, chairman of Feedback Business Consulting and a member of the erstwhile Bangalore Agenda Task force (BATF), a private and corporate sector-led initiative launched by former chief minister S.M. Krishna. “That’s a test for any governance system.”

Bangalore alone accounts for one-sixth of the state’s population. In fact, just six districts (out of 30) account for 42 per cent of the state’s population. The rapid urbanisation is straining both governance and resources.

Bangalore also accounts for over 40 per cent of the state’s revenues, and other urban centres add up to another big chunk. Predictably, that means the focus of development has been on the demands of the politically vocal urban population and, consequently, the northern districts are lagging. More recent data was not accessible, but going back five years, the southern part of the state has 1.5 times the per capita income of the northern part. How can these disparities be addressed?

North Versus South
In April 2012, the Commerce and Industries Department of the state government prepared a project for a special investment region at Dharwad, along the lines of a project by the Gujarat government at Dholera. A good idea, but for two things: one, the infrastructure needs to make such a project work are considerable, and two, Bangalore’s needs overwhelm everybody else’s.

Karnataka is perpetually short of power, despite the addition of nearly 5,000 MW in the past five years, and an additional 7,000 MW that will come online in the next three years. The water problems are perhaps worse.

The October 2012 decision of the Cauvery Water Disputes Tribunal (CWDT) has dismayed most people in Karnataka, and farmer agitations have sprung up over what the state’s residents believe is an unfair deal. Many cities in Karnataka depend upon the Cauvery for drinking water, and real estate development. Let’s not forget irrigation requirements. Any government that comes to power after May will have an immediate problem to address.

On connectivity, Karnataka does better than the national average of about 4 km of roads added per day. There’s even a mini quadrilateral proposed in the state, but here again, there are criticisms of north Karnataka being neglected.

Bangalore’s position as the so-called Silicon Valley of India seems to give it an unfair advantage over the rest of Karnataka. There has been an extraordinarily large migration to the city, both of companies and people. As you travel from the airport into the city, the phenomenal number of housing project billboards bears this out.

The city is bursting at the seams. “The bore wells are drying up as the water table is getting depleted after all this new construction,” a leading builder acknowledges. “First, there was a ring road; now there’s an outer ring road. But we have grown past that.” Estimates from various quarters suggest that soon ‘Greater’ Bangalore will cover an area of 5,000 sq. km.

And the strain is showing, both on civic amenities and in traffic snarls. The Bangalore Metro project is growing slowly. Other forms of public transport struggle to keep up. Add the political scandals, and there’s a sense of drowning under it all. V. Balakrishnan, former CFO at Infosys Technologies and now a member on the company’s board, says, “There has to be visible action; the government has to be seen to be governing.”

Vinita Bali, managing director and CEO at Bangalore-based Britannia Industries, says that good governance attracts industry, as does the availability of basic infrastructure. “Cities in the state have to be safe and secure, and we need quality public services. Bangalore hasn’t done well enough on that score.”

Bangalore has more than 10 per cent (28) of the seats in the 225-member Legislative Assembly. This exemplifies why the urban vote has now become crucial to any political party’s victory. This much is clear: it cannot be politics as usual anymore, but a new kind of politics, perhaps even a new kind of politician.

Bangalore’s population has grown 46 per cent (2001-11), while Karnataka’s has grown 16 per cent

The city alone accounts for 28 seats in the state’s 225-member Legislative Assembly, and over 40 per cent of the revenues

By one estimate, ‘Greater’ Bangalore will cover an area of 5,000 sq. km

There has been a very high level of migration to the city, both by companies and people
Corporate Citizens
Mohandas Pai, former CFO at Infosys, and Kiran Mazumdar Shaw, managing director of Biocon, are founders of the Bangalore Political Action Committee. They have raised funds — rumours suggest Rs 50 crore (we were unable to verify this) — to finance good, clean candidates to run for and fight the upcoming elections.

Apart from putting in their own money, they reportedly hosted a Rs 50,000-a-plate dinner to raise funds. They also focus on getting people to vote.

Ashwin Mahesh, a Lok Satta party candidate contesting the Bommanahalli constituency in Bangalore, is a professor of public policy at the Indian Institute of Management in Bangalore, where he has a research appointment. He’s an astrophysicist and climate change expert who’s also worked at the US National Aeronautics and Space Administration.

Mahesh has been active in civic circles in Bangalore for some time, working with civic authorities to improve the frequency of buses, garbage clearance — a big problem in Bangalore — and other issues. He even contested the last upper house elections in the state and got 16 per cent of the votes. “The winning candidate got 21 per cent,” he says. “People are listening.”

On a warm morning in April, I walk with him as he goes through Vinayak Nagar, a part of Bangalore where the population is overwhelmingly Muslim. He knocks on doors, introduces himself and tells people why he is contesting: to bring about a clean polity and clean politics.

He and his team of volunteers — they include two entrepreneurs, a doctor and a PhD student from the University of Zurich — wear blue vests/overalls that are easily identifiable, carry leaflets and blue whistles. A gaggle of children follow them around, asking for the whistles, which are a symbol for blowing the whistle on graft.

“Retail politics requires a message,” says Mahesh. “That’s what the two mainstream parties don’t have. What they do is point out what the other guy hasn’t done.” People seem to be listening; many admire what he’s doing, though not all promise him their vote.

His constituency is a large one with about 400,000 voters, half of whom have moved to the city in the past five years. I ask him if this style of campaigning will work. “What is the USP of marketing?” he asks. “To do what the competition cannot or will not do. That’s what I am doing.” The pay-off? The share of the vote is an important metric; the greater the vote-share, the better his chances.

Among his competition is another US-returnee, a software engineer who worked in San Jose, California, with Cisco Systems and Oracle for 12 years. I accompanied Yogesh Devaraj on his door-to-door campaign in another part of the same constituency — this one an upper middle-class locality.

Like Mahesh, Devaraj has a number of young volunteers, mostly from the IT services community. Devaraj uses his network of residents associations, whose concerns and issues about overcrowding and flouting of civic rules by builders he championed with the city’s government.

He is talking to a young software engineer who hasn’t registered to be a voter. Devaraj whips out his BlackBerry, forwards the necessary forms and takes down his contact information to follow up. We drop into the house of the residents’ association head, and he makes arrangements to speak to members later.

“Everybody wants clean politics,” he says. “We are even willing to pay for it by paying higher taxes and the market price for amenities. But there is considerable voter apathy; less than 40 per cent of the eligible voters come to the polls.” But, like Mahesh, he hopes to cash in on the newcomers in his constituency and get out the vote.

The mainstream parties may also have good, clean and worthy candidates, but they run up against other barriers: members who have paid their dues and waited their turn, proved their loyalty and moved up the party’s command structure. Being good, it seems, doesn’t cut it.

M.V. Rajeev Gowda, like Mahesh and Devaraj, is another US returnee; a PhD from the Wharton School of the University of Pennsylvania, he taught at the University of California at Berkeley. His father M.V. Venkatappa was a Congressman and speaker of the Karnataka Assembly. Gowda is chairman of the Centre for Public Policy at IIM Bangalore, and has authored a paper on campaign finance reform (an important issue, given the amount of black money that goes into elections). In many ways, he seems an ideal candidate, but did not get a ticket from the Congress. As one of his supporters told me cynically, “There was someone ahead of him in the queue.”

For Gowda, transforming politics is all about ideas, and many of them come from outside politics. “Take the Jawaharlal Nehru National Urban Renewal Mission; the original idea germinated in the BATF,” he says. “Even NREGA was an idea that came from an NGO, not government, as did the Right to Information Act.”

Gowda may not run in this election, but he may be thinking about the next one. Outside his office, five young people wait. They are entrepreneurs, professionals, and perhaps a student or two. Gowda is offering a political internship, but those waiting are part of a team that is working on a strategy about how to use Facebook for political campaigns. Perhaps solutions to Karnataka’s problems and challenges will have to come from people like him: committed professionals who bring success from their endeavours outside politics to it. The trouble is, it will take more than just a few good men.


(This story was published in BW | Businessworld Issue Dated 20-05-2013)