In my last column, I wrote about learning from China. The experience of
other countries, especially those that share key characteristics with
India, is obviously important as a guide for policymakers. But there are
important lessons from India’s own experience. Democratic voting allows
the individual experiences of citizens to be articulated, albeit in an
aggregate and imprecise manner. Drawing the right lessons from India’s
latest elections is vital.
The stock market seemed to conclude that the outcome in Uttar
Pradesh was a bad one for India’s economic future. Since the UP state
assembly election did nothing to consolidate the political position of
the ruling party’s heir apparent, it may be that uncertainty and
jockeying for position at the Centre will continue, both within the
ruling party, and in the wider coalition. Capricious coalition partners
and powerful ministers may continue to block or divert needed and
potentially beneficial economic reforms.
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