Shifting sands: How power plays and party defections are costing Maharashtra its economic edge

India’s wealthiest State faces multiple crises, each of which needs to be addressed to return it to its lost glory.

A farmer pumping water from the Bendsura reservoir in drought-affected Beed district, an April 2019 picture. Maharashtra leads the country in farmer suicides, but political developments, rather than farmer suicides, have hogged media and social media attention. | Photo Credit: DHIRAJ SINGH/Bloomberg

The political manoeuvring of the past five years in Maharashtra has come at a cost: political uncertainty, economic decline, and rising communal and caste tensions. The serial poaching of MLAs and engineered defections have undermined the State’s political culture, which was once built on mutual respect and cooperation among opposition parties.

It began with the 2019 Assembly election that disrupted the status quo in Maharashtra politics when the Uddhav Thackeray-led Shiv Sena broke away from the National Democratic Alliance (NDA) and joined the Congress and the Nationalist Congress Party (NCP), led by Sharad Pawar, to form a government in the State.

Until 1995, when the Shiv Sena and the BJP joined hands and came to power, it was the Congress that had held sway over Maharashtra for many decades. That year marked the beginning of coalition politics in the State, with the Congress and the NCP predominantly on one side and the Shiv Sena-BJP on the other.

The saffron alliance continued in the elections that came thereafter. Significantly, the Shiv Sena was a founding member of the BJP-led NDA, which ruled the country in 1998, and it was the only constituent that shared the BJP’s Hindutva agenda. In 2014, both parties contested the Assembly election separately, but formed a government in a post-election alliance, with Devendra Fadnavis of the BJP as Chief Minister.

The 2019 election, however, upset the apple cart. The Shiv Sena, which was in a pre-election alliance with the BJP, demanded the Chief Minister’s post, stating that the then BJP president Amit Shah had assured them of this. The BJP denied having given any such assurance. The snub prompted Uddhav to join the Congress-NCP alliance, and he became Chief Minister of the Maharashtra Vikas Aghadi (MVA) government on November 26, 2019.

Paradigm shift

This was a paradigm shift in Maharashtra politics. The Sena, founded in 1966 on a sons-of-the-soil plank, had taken a right turn in the early 1990s and was one of the loudest voices of the Hindu Right until the rise of Narendra Modi. As such, Uddhav’s alliance with the Congress and the NCP shook the right-wing ecosystem.

In its aftermath, the BJP tried every trick to discredit the Uddhav government. It attacked the MVA government on all issues, and worse, it unleashed investigation agencies, such as the Enforcement Directorate, the Central Bureau of Investigation, and the Income Tax department against several MVA leaders.

This no-holds-barred attack on the opposition altered the political culture of the State, bringing in an animosity hitherto unknown among its political leaders. The State has always taken pride in its tradition of maintaining cordial personal relationships between its ruling and opposition leaders, from the time of the BJP’s first-generation leaders in Maharashtra such as Pramod Mahajan, Gopinath Munde, and Nitin Gadkari.

During a protest on the Pune-Solapur Highway in connection with Maratha reservation, in Solapur on November 1, 2023. The State government’s inept handling of the sensitive issue made it worse. | Photo Credit: PTI

As Shiv Sena and NCP leaders began to feel the heat, many of them asked their leadership to relinquish power. Finally, in June 2022, a large group of Shiv Sena MLAs broke away from the Uddhav camp. The BJP supported the breakaway faction led by Eknath Shinde and made him Chief Minister. Devendra Fadnavis, reportedly much against his wish, became the Deputy Chief Minister.

The next step was to engineer a split in Sharad Pawar’s NCP. His nephew Ajit Pawar, who was under investigation by many agencies, joined the Shinde-led Cabinet in June 2023. Ajit shared the Deputy Chief Minister’s post with Fadnavis. Later, the Election Commission recognised the Shinde and Ajit Pawar groups of the Shiv Sena and the NCP, respectively, as the “real” parties. Both verdicts have been challenged and are pending in the Supreme Court.

Setback to the NDA

Despite these efforts, however, two years later the BJP’s ambitions took a beating in the Lok Sabha election. Of the 48 Lok Sabha seats in the State, the MVA won 30 and the NDA won 17. One Independent who won affiliated himself with the Congress.

The BJP itself won a mere 9 seats against the 24 and 23 seats it won in 2014 and 2019 respectively in alliance with Uddhav. In 2014 and 2019, the BJP had been the first party since 1990 to win over 100 seats in the Assembly, 123 and 105 seats respectively. However, given the results of the general election, it looks as if the BJP might have a tough task repeating such past performances.

The results also defy a myth about the BJP that it works to a long-term plan. Bringing down the MVA government by splitting parties is not being seen so much as a “Chanakya move” as an abuse of power. This has led to the BJP losing its psychological leverage over the opposition.

Worse, it is the State that has paid a huge price for the political instability. Once the most industrialised State in the country, Maharashtra is now lagging behind on many development parameters. The State’s economic growth, according to the Economic Survey, was 4.5 per cent in 2019-24, falling from 6.1 per cent in 2014-19. The State debt amounts to Rs.7.11 lakh crore. It is estimated that at this pace, by 2026, debt will rise faster than the growth rate.

The Economic Survey says the State is in the sixth place in the country’s per capita income index. However, as pointed out by opposition leaders, a Press Information Bureau press note of July 24, 2023, says that Maharashtra, with a per capita net State domestic product of Rs.1.46 lakh, is actually at number 11 (see “Maharashtra Budget: Ambitious focus on welfare programmes, but where is the money?”, Frontline, July 19, 2024).

The average growth rate in the industrial sector has fallen from 5.5 per cent in 2014-19 to 1.3 per cent in 2019-24. The average manufacturing growth rate from 2019 to 2024 has been negative, at -1 per cent.

Challenges ahead

Social indicators too have declined. According to Hindutva Watch, an independent research project that documents hate crimes and hate speech against religious minorities in India, Maharashtra saw the largest number of hate speeches in the country in 2023. Data from the National Crime Records Bureau reveal that Maharashtra had the highest number of people arrested in cases of riots in the country in 2022. Critics point out that Hindu right-wing groups tried to communalise society ahead of the recent Lok Sabha election as well.

The State has also seen a rift between the Maratha and Other Backward Classes in the past eight months over the issue of reservation. The State government’s inept handling of the sensitive issue made it worse. Adding fuel to the fire were aggressive statements on reservation made by Ministers such as Chhagan Bhujbal.

Communal and caste conflicts have pushed real challenges like the agricultural crisis to the back burner. As many as 55 per cent of the State’s population lives in rural areas. Of this, 87 per cent is dependent on agriculture. Maharashtra has the ignominy of leading the country in farmer suicides. Until July 15 this year, nearly 600 farmers had died by suicide. Political developments, rather than farmer suicides, have hogged media and social media attention.

It is against this background that the upcoming Assembly election gains significance. In the following pages, Frontline does an in-depth review of the status of Maharashtra by examining the State with respect to its sociopolitical transition, its economy, agriculture, industry, and infrastructure, and a stand-alone look at its capital Mumbai.