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By:

Abhijit Mulye

21 August 2024 at 11:29:11 am

The Unequal Cousins

Raj Thackeray’s ‘sacrifice’ saved Shiv Sena (UBT) but sank the MNS Mumbai: In the volatile theatre of Maharashtra politics, the long-awaited reunion of the Thackeray cousins on the campaign trail was supposed to be the masterstroke that reclaimed Mumbai. The results of the Brihanmumbai Municipal Corporation (BMC) elections, however, tell a story of tragic asymmetry. While the alliance has successfully helped the Shiv Sena (UBT) stem the saffron tide and regain lost ground, it has left Raj...

The Unequal Cousins

Raj Thackeray’s ‘sacrifice’ saved Shiv Sena (UBT) but sank the MNS Mumbai: In the volatile theatre of Maharashtra politics, the long-awaited reunion of the Thackeray cousins on the campaign trail was supposed to be the masterstroke that reclaimed Mumbai. The results of the Brihanmumbai Municipal Corporation (BMC) elections, however, tell a story of tragic asymmetry. While the alliance has successfully helped the Shiv Sena (UBT) stem the saffron tide and regain lost ground, it has left Raj Thackeray’s Maharashtra Navnirman Sena (MNS) staring at an existential crisis. The final tally reveals a brutal reality for the MNS - Raj Thackeray played the role of the savior for his cousin, but in the process, he may have become the sole loser of the 2026 mandate. The worse part is that the Shiv Sena (UBT) is reluctant to accept this and is blaming Raj for the poor performance of his party leading to the defeat. A granular analysis of the ward-wise voting patterns exposes the fundamental flaw in this tactical alliance. The vote transfer, the holy grail of any coalition, operated strictly on a one-way street. Data suggests that the traditional MNS voter—often young, aggressive, and driven by regional pride—heeded Raj Thackeray’s call and transferred their votes to Shiv Sena (UBT) candidates in wards where the MNS did not contest. This consolidation was critical in helping the UBT hold its fortresses against the BJP's "Infra Man" juggernaut. However, the favor was not returned. In seats allocated to the MNS, the traditional Shiv Sena (UBT) voter appeared hesitant to back the "Engine" (MNS symbol). Whether due to lingering historical bitterness or a lack of instructions from the local UBT leadership, the "Torch" (UBT symbol) voters did not gravitate toward Raj’s candidates. The result? The UBT survived, while the MNS candidates were left stranded. ‘Second Fiddle’ Perhaps the most poignant aspect of this election was the shift in the personal dynamic between the Thackeray brothers. Decades ago, they parted ways over a bitter dispute regarding who would control the party helm. Raj, refusing to work under Uddhav, formed the MNS to chart his own path. Yet, in 2026, the wheel seems to have come full circle. By agreeing to contest a considerably lower number of seats and focusing his energy on the broader alliance narrative, Raj Thackeray tacitly accepted the role of "second fiddle." It was a pragmatic gamble to save the "Thackeray" brand from total erasure by the BJP-Shinde combine. While the brand survived, it is Uddhav who holds the equity, while Raj has been left with the debt. Charisma as a Charity Throughout the campaign, Raj Thackeray’s rallies were, as always, electric. His fiery oratory and charismatic presence drew massive crowds, a sharp contrast to the more somber tone of the UBT leadership. Ironically, this charisma served as a force multiplier not for his own party, but for his cousin’s. Raj acted as the star campaigner who energised the anti-BJP vote bank. He successfully articulated the anger against the "Delhi-centric" politics he accuses the BJP of fostering. But when the dust settled, the seats were won by UBT candidates who rode the wave Raj helped create. The MNS chief provided the wind for the sails, but the ship that docked in the BMC was captained by Uddhav. ‘Marathi Asmita’ Stung by the results and the realisation of the unequal exchange, Raj Thackeray took to social media shortly after the counting concluded. In an emotive post, he avoided blaming the alliance partner but instead pivoted back to his ideological roots. Urging his followers to "stick to the issue of Marathi Manoos and Marathi Asmita (pride)," Raj signaled a retreat to the core identity politics that birthed the MNS. It was a somber appeal, stripped of the bravado of the campaign, hinting at a leader who knows he must now rebuild from the rubble. The 2026 BMC election will be remembered as the moment Raj Thackeray proved he could be a kingmaker, even if it meant crowning the rival he once despised. He provided the timely help that allowed the Shiv Sena (UBT) to live to fight another day. But in the ruthless arithmetic of democracy, where moral victories count for little, the MNS stands isolated—a party that gave everything to the alliance and received nothing in return. Ironically, there are people within the UBT who still don’t want to accept this and on the contrary blame Raj Thackeray for dismal performance of the MNS, which they argue, derailed the UBT arithmetic. They state that had the MNS performed any better, the results would have been much better for the UBT.

Chasing Trillions and the Mirage of 2047

Updated: Jan 30, 2025

Part 2:

India’s economy is growing, but will it grow fast enough to reach its ambitious targets?

India’s economy

Ahead of the Union Budget 2025, India’s economic outlook remains a mixture of promise and caution, with key indicators pointing to both resilience and areas of concern. To fully grasp the state of India’s economy, one must look beyond the headlines and into the numbers. At its core, Gross Domestic Product (GDP) serves as the most common yardstick, measured in two forms: Nominal GDP, which reflects the total value of goods and services at current prices, and Real GDP, which adjusts for inflation to enable meaningful comparisons over time. While the GDP growth rate usually refers to the latter, the size of the economy is expressed in terms of the former.


After an impressive GDP growth of 8.2 percent in FY 2023-24, India’s economy slowed to roughly 6 percent in the first half of the current fiscal year. Opposition parties have been quick to seize on the downturn, but the broader context is less grim. The OECD’s December 2024 outlook pegged global growth at 3.2 percent, with India projected to expand by 6.8 percent in FY 2024-25 - more than double the pace of developed economies, which are expected to grow at a mere 3 percent. By that measure, India’s resilience is undeniable.


Digging deeper into the components, Private Final Consumption Expenditure (PFCE) grew by 6.7 percent in the first half of FY 2024-25, bolstered by robust rural demand even as urban consumption softened. Meanwhile, Gross Fixed Capital Formation (GFCF), which represents investment in fixed assets, expanded by 6.4 percent in the same period. However, GFCF growth faltered in the second quarter due to a slowdown in government capital expenditure and a cautious private sector wary of election-related uncertainty, geopolitical risks, excess industrial capacity, and the threat of cheap imports flooding the market. The tremors were felt in lacklustre corporate earnings, which in turn dragged down stock indices.


Government Final Consumption Expenditure (GFCE), after contracting in the first quarter, rebounded with 4.1 percent growth in the second. The election-induced slowdown in public spending was inevitable, as the Model Code of Conduct put a temporary freeze on policy decisions. By August 2024, with a new government in place and a fresh budget passed, the wheels of expenditure began turning again. Public investment, particularly in infrastructure, is a crucial driver of economic momentum, and its revival could well determine the trajectory of the coming quarters.


Trade figures presented a mixed picture. Merchandise exports grew a modest 1 percent, driven by non-oil shipments, while merchandise imports climbed 6.2 percent, with non-oil, non-gold/silver imports rising by 3.9 percent. A $0.5 billion current account surplus in Q1 turned into a $21.4 billion deficit by Q2, reflecting a widening trade imbalance that weighed on GDP growth.


The third quarter, however, was marked by a buoyant festive season and an uptick in government spending. Large capital-intensive firms saw their order books swell by 23 percent in FY 2024, far outpacing the compound annual growth rate of 5 percent seen in previous years. As these projects move from planning to execution, industrial activity is already showing signs of revival, setting the stage for stronger numbers in the second half of the fiscal year.


By sheer scale, the Indian economy remains formidable. In the first half of FY 2024-25, its nominal GDP stood at Rs. 153.91 lakh crores—approximately $1.8 trillion. Projections from the Ministry of Statistics and Programme Implementation estimate nominal GDP for the full fiscal year at Rs. 324.11 lakh crores, or roughly $3.8 trillion. Yet, for all the talk of economic milestones, the dream of a $5 trillion economy, championed by Prime Minister Narendra Modi, remains just that - a dream, at least for now. Even breaching the $4 trillion mark by 2025 appears increasingly unlikely.


Beyond sheer numbers, the bigger challenge lies in India’s long-term goal: achieving ‘Vikasit Bharat’ - developed nation status by 2047. One benchmark for this transformation is a per capita GDP between $12,000 and $15,000. India’s current figure? $2,939 in FY 2025. To meet the 2047 target, annual growth must sustain a minimum 6.5 percent trajectory. So far, the economy is holding steady but will it be enough? The next wave of high-frequency indicators may provide the answer.


(The author is a Chartered Accountant and works at Authomotive Division of Mahindra and Mahindra Limited. Views personal.)

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