Amma should watch out


Growth rates and state elections


Indian Express, May 10, 2006


Does a drop in the State GDP growth rate spell trouble for the party

in power when state assembly elections come?


We looked at the growth performance in 17 states before the latest

state election comparing growth rate in the state under the incumbent

to historical averages.


In 10 out of 17 cases we found that either poor growth performance by

the state was followed by a change in the party in power, or if the

performance was above the historical average, the party stayed in

power.


Obviously, that is not the only thing that matters and political

alliances are crucial.. However, it indicates that the rising

aspirations of the electorate in a fast growth economy cannot be

ignored by the ruling party.


How have the economies of the 4 states Assam, Kerala, Tamil Nadu and

West Bengal performed under the incumbent governments compared to the

the previous government. For that we compare growth rates in the

periods 1996-2001 and 2001-2004/5.


As the table below shows, West Bengal saw a rise in growth rate from

6.97 percent to 7.22 percent, something which bodes well for the CPM.


In Assam state GDP growth went up from 2.16 percent during 1996-2001

to 4.53 percent during 2001-2005 which is good news for the Gogoi

government.


In Kerela there was a marginal decline from 4.81 to 4.79 percent over

this period.


Tamil Nadu saw an sharp decline in growth from 6.33 percent to 1.97

percent.










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