How paying women Rs 1,500 won an election in one of India's richest states

There’s a new cost that political parties have to pay to win elections in India these days: cash handouts to underprivileged women. Across 10 Indian states, these transfers to female voters are now a $20 billion-plus annual commitment — and the results in Maharashtra, home to the financial capital Mumbai and one of the nation’s richest states, show that they deliver.

In the April-May federal polls, the Bharatiya Janata Party-led coalition won just 17 of Maharashtra’s 48 seats, compared with 41 in 2019. Opposition leader Rahul Gandhi’s alliance bagged 30. Which is when Prime Minister Narendra Modi’s party doubled down to prevent a repeat of the debacle in the local assembly elections that just wrapped up. The state’s June budget made an allocation for 25 million women to receive 1,500 rupees ($18) a month in cash. The gambit seems to have paid off.

The BJP, which fielded 149 candidates for the state’s lawmaking body, secured victories for 132 of them in results announced over the weekend. With allies, the tally is 235. The opposition is left in the dust, with its leaders complaining about electoral malpractices.


The stunning reversal in less than six months had very little to do with prime minister’s appeal among the masses. Instead, it shines a light on India’s enormous inequalities — and how a small cash handout to underprivileged women can make a huge difference to electoral fortunes. The message is not lost on politicians in other states. Bond markets, too, must make a note of its implications.

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Expect the payout to female voters to keep rising, especially in states like Maharashtra that have billions of dollars of real estate projects to award. There, the economics of holding on to power at any cost are a no-brainer.

An $18 handout may not sound like much for a state whose people earn 50% more than India’s per capita income. But averages conceal more than they reveal. A typical worker in a rich, urban center such as Mumbai makes $5,000 annually, three times more than her counterpart in the drought-prone farmlands of Maharashtra’s Vidarbha region. In the national elections, the opposition alliance had won 44%-45% of votes in poor and very poor districts, 3 to 7 percentage points higher than the rival grouping, according to an analysis by The Hindu newspaper.

It is this gap that Modi’s coalition closed beyond expectations.

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Maharashtra’s centrality to India’s politics goes beyond heft in national parliament, where its representation is second only to Uttar Pradesh in the north. But being home to the commercial capital of Mumbai gives the state on India’s western coast something that impoverished, landlocked UP can never match: money power. Historically, this influence has asserted itself via agrarian interest groups — many of the state’s politicians are sugar barons. But in last week’s election for Maharashtra’s local assembly, one of the most contentious issues was real estate.

Gandhi kept hammering the state’s BJP-controlled government for giving a sweetheart shantytown redevelopment deal to Modi’s longtime friend, Gautam Adani, India’s second-richest tycoon. The opposition leader also alleged that the controversial businessman, who was charged by the US in a $250 million bribery case hours after voting ended, had played a role in keeping the BJP in power in the state. Neither Modi nor Adani responded to the allegations.

The right to redevelop 600 acres of pricey land in Mumbai, one of the most densely populated urban agglomerations in the world, is a ticket to the land-starved city’s real-estate crown. So it’s only natural that Adani’s 80% stake in a joint venture with the state government to execute a $3 billion makeover of Dharavi, the city’s biggest slum, would be a hot-button political issue.

Especially since the tender award was subsequently sweetened — just months before the state elections — by throwing in 255 acres of publicly owned saltpans to provide housing for those displaced from the slum. There’s also a requirement that any new construction in Mumbai looking to go tall will have to buy a part of its development rights from the Dharavi project. But to be able to see the redevelopment through, the current administration must stay in power. Which is where the welfare payments to women come in.

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Had the coalition led by Gandhi succeeded in dislodging the current Maharashtra government, the award to Adani might well have been cancelled. But do voters really care about cronyism? The state’s politics have always been dominated by powerful economic interests. India is the world’s second-largest producer of sugar, thanks to the 10 million tons churned out by Maharashtra’s factories. The 2.7 million members of the state’s sugar cooperatives make them a potent electoral force.

“Don’t ask about ideology in Maharashtra,” said Ajit Pawar, who became a deputy chief minister after crossing over to Modi’s camp last year. “Everybody wants power here,” the politician said in the same video interview where he gave an account of a 2019 meeting at Adani’s residence in which defection was allegedly pitched as a way to avoid investigations for economic offences.

For now, it seems political power in the state comes from square feet of Mumbai real estate — and an $18 payment to impoverished women.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)