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Rajasthan Ground Visit INSTITUTIONAL EQUITY RESEARCH Rajasthan Ground Visit Confident about Modi; mixed views on state governance INDIA | STRATEGY 3 December 2018 After our recent MP visit, we went to Rajasthan to gauge the impact of central and state government policies, the health of the state’s economy, and the election mood. Combining Anjali Verma the two visits, we find that: (1) Central government policies have been beneficial and widely (+91 22 6246 4115) [email protected] acknowledged by the public, (2) Modi is the most favoured leader in rural regions and accredited for his good work/policies, (3) implementation of state/centre policies has been Neeraj Chadawar better in MP than in Rajasthan, (4) despite 15 years of incumbency, MP is likely to witness a (+91 22 62464116) close fight between BJP and INC, favouring BJP, (5) in Rajasthan, historical trend of change of [email protected] government every five years and angst with the ruling BJP favours a Congress win, but we received mixed feedback – indicating a close fight between BJP and Congress. (Note – we are Raag Haria not predicting the MP and Rajasthan election outcome – this is feedback that we received from the people of these states).\ Feedback from Rajasthan – Still a long way to go We met with farmers, daily wagers, residents, businesspersons, shopkeepers, and government officials during our 800km Rajasthan road visit. Key takeaways/feedback: (1) Historical trend (government change every five years) is likely to be one of the factors influencing voters’ decision‐making during the upcoming state elections. (2) We received mixed feedback on BJP’s governance in Rajasthan – one of the key reasons that could lead to INC (Congress) gaining assembly seats and for BJP losing them. (3) People complained about lack of jobs (including government), lack of water availability, corruption, lack of proper road infrastructure, and unfulfilled election promises. (4) SC’s ban of sand and bajri (gravel) mining in Rajasthan has had a serious employment and income effect on labourers for the last one year. We saw hordes of daily wagers sitting jobless across Rajasthan and in large numbers. This section blamed the existing government for its condition and said it would vote for Congress en mass. (5) Demonetisation and GST have affected businesses and in general demand is weak. Gradual improvement expected. (6) Central government policies were well applauded. However, execution was not up to the mark and responses were not as positive as from the people of the MP region. a. PMAY: Pukka houses are being constructed. Some complained that their applications have been rejected (reasons unconfirmed). b. Swachh Bharat: People were extremely appreciative of this initiative of the government and all of them claimed to have built toilets with the Rs 12,000 subsidy that it received from the government. c. PM Ujjwala Yojana: Most people have received gas connections, but also widely complained about Rs 1,000 upfront payments to buy cylinders. This is a considerable amount to spend at a time, they said. d. Aadhar card/PM Jan Dhan Bima Yojana: Most people we met have Aadhar Cards and receive Aadhar‐linked benefits. They have wide‐scale access to bank accounts. e. Digital India: We were positively surprised with villagers appreciating “Digital India” resulting in minimum leakages and assured benefits. f. PM Modi is loved by rural Rajathan/MP; rural denizens are confident that they will vote for Modi in 2019. They said that he has brought meaningful benefits to their lives. (7) Businessmen unhappy about weak business activity after demonetisation and GST, government approvals still taking long, widespread corruption. Swing factors in the upcoming Rajasthan elections (BJP won 163/200 seats in 2013): (1) Lack of jobs and employment opportunities – to favour Congress. (2) No change in BJP’s CM candidate – to benefit Congress. (3) Formation of Rashtriya Loktantrik Party (RLP) will eat into Jat votes, which favoured BJP in 2013. (4) Damp business sentiments to favour Congress. (5) Reasonable scope of infrastructure development and improving basic amenities. (6) Promise of farm loan waiver to support Congress. (7) Modi influence to favour BJP. (8) Disciplined BJP election machinery. (9) BJP being favoured after the release of the Congress’ candidates list. Page | 1 | PHILLIPCAPITAL INDIA RESEARCH RAJASTHAN GROUND VISIT ‐ INDIA STRATEGY UPDATE Our travel across Rajasthan • 800km GROUND VIEW visit to Rajasthan. We started with Jaipur (capital of Rajasthan), a part of Dhundhad region where Jat and Rajput communities are dominant. • We than headed towards Tonk, where there is a neck‐in‐neck fight between young INC leader Sachin Pilot and BJP’s minority candidate Yunus Khan. • We also headed to Mewar region where the incumbent BJP holds 43 out of 48 seats. Here, we covered Bhilwara, Chittorgarh, and Udaipur districts. • On the last day, we covered Marwar region where BJP is sitting on 42 out of 46 seats; here too Jats and Rajputs are dominant. Here, we covered Sirohi, Pali, and Jodhpur districts. • We met with farmers, daily wages workers, shopkeepers, politicians, residential people, traders, and female entrepreneurs. • Our aim was to get a perspective on the economic, business, political, and sentiment‐driven impact of the state and central government’s policies that were rolled out in the last five‐years. Travelled 800 kms across Rajasthan over three days Source: Hindusthantimes Page | 2 | PHILLIPCAPITAL INDIA RESEARCH RAJASTHAN GROUND VISIT ‐ INDIA STRATEGY UPDATE Rajasthan and MP visit – Central government policies a hit, wherever they were well executed A little while ago, we travelled 1,000km within Madhya Pradesh (Click here for our report: Madhya Pradesh Election Visit: Freebies working, but not for long). More recently, we traversed Rajasthan, covering 800km. We received an upbeat response on all the central government policies: 1. PMAY was most appreciated due to the scheme’s large quantum; constructing pukka house is a dream come true for this section of the population 2. Most people we met had Aadhaar cards and all the benefits were now through DBT (directly transferred to beneficiary’s bank accounts). We met people who appreciated ‘Digital India’. We consider this a meaningful Across Rajasthan, we saw numerable daily wagers awaiting for jobs, sitting / standing achievement by the BJP government that is resulting in leakage minimization on the streets and adding to fiscal savings and wider coverage of beneficiaries. 3. Financial inclusion has been fairly successful – while some complained of being illiterate and the distance they had to travel, we were told that the rural public is now well serviced/catered to by banks vs. before. 4. Under Swachh Bharat scheme, rural areas of MP and Rajasthan have received Rs 12,000/house subsidy to construct toilets. We were told that all the houses have made use of this money and women have benefitted significantly as a result. 5. Under Ujjwala Yojana, most people we met have received gas connections, as an outcome of this, women are now unwilling to work on primitive chullahs. We received a very positive response about central and state government policies from MP vs. Rajasthan – reflecting the condition of state governance. Despite 15 years of anti‐incumbency in MP, we received a good feedback about Shivraj Singh Chauhan (BJP’s ruling CM) while it was mixed for Rajasthan’s state politics. Based on our conversations with the regional population, a close contest is likely between Congress and BJP in MP as well as Rajasthan. Rajasthan elections – On 7th December, 200 assembly seats will be contested in Rajasthan; the verdict will be out on 11th December 2018. For the last 20 years, Rajasthan has a tradition of changing the government in every assembly election. This, along with certain governance issues and unfulfilled promises, has caused anti‐ incumbency. The ruling BJP government was on the back foot a few months ago, as anti‐incumbency was very strong. However, in the last 15 days, the BJP has gained Rajasthan seed corporation offices seen prominence. Rallies headed by Prime Minister Narendra Modi and Chief Minister across state Vasundhara Raje are receiving a huge response among masses – which shows that the BJP, especially Modi, continues to be popular in the desert state of Rajasthan. Unemployment, drinking water, private and public sector jobs, corruption, and lack of good roads are the biggest issues where the anger among people is substantial. Congress is leading a campaign under the leadership of former chief minister Ashok Gehlot and young leader Sachin Pilot. INC’s manifesto has promised loan waivers within 10 days of government formation (similar to MP) – this will be a strong positive factor favouring Congress along with anti‐incumbency. Farmers and youth are the top agenda for the Rajasthan Congress Campaign. While it is difficult to predict the outcome of these elections, it is likely to be a close one. There is clarity that Congress is likely to gain seats in both MP and Rajasthan while BJP will lose the thumping majority it received in 2013. Page | 3 | PHILLIPCAPITAL INDIA RESEARCH RAJASTHAN GROUND VISIT ‐ INDIA STRATEGY UPDATE PM Narendra Modi – The Tall Leader Irrespective of the place we visited and the people we met in rural Rajasthan and MP, we received a consensus feedback that in Lok Sabha elections, they would vote for Modi for all the good work he has done. Modiji ko hi vote dengey, 2019 main tho modiji hi aayengey – we were told by all. PM has a very clean image, the image of a doer, and was well respected by rural India. Policies introduced by the central BJP have been very effective in uplifting the social structure of these states. Rural India feels empowered and better off under this regime. We have been of the view that the central BJP government along with states has adopted a holistic approach to bring development across rural India through the sectoral focus in sovereign spend (Click here for our April 2018 report titled Sovereign Expenditure Analysis: Centre + States = Together, We Triumph) .
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