Most Governments Die Rich

In December 2004, the body of the man who rebuilt India's economy was carried to the headquarters of his own party, and did not go in. The cortege waited at the kerb. Within a few hours it was on its way to Hyderabad.

P V Narasimha Rao, fondly known as PVNR, had spent his political capital on the most consequential decision any Indian government had taken in a generation. He never told the story, so others told it, and for a long time they told it against him. His party lost in 1996, blamed him, and stopped visiting. Credit came decades later, and even then, from the opposition party's government.

That is the first lesson of political capital, and almost nobody in power learns it in time.

What political capital actually is

Political capital is not the same as your number of seats. A majority is just a figure in the Lok Sabha or Vidhan Sabha. Capital is something you cannot see on counting day: it is the trust of your own people and the patience that comes with it.

That trust is more than just admiration. When a voter picks a party or leader, she is doing more than voting. She is putting her own judgement on the line. After the election, every time she looks in the mirror, his record is partly her own. That is why she is patient: defending him means defending herself. This is why voters forgive a lot for a long time, and why calling a leader a fool rarely works. It calls his voters fools too.

People often mix the two up, and that mistake can be costly. A government with a huge majority might still lack real capital: it can pass a law but find its own supporters will not back it. A minority government can have plenty of capital: it can risk everything on a decision and come back even stronger. The real question is not how many seats you have, but how much your own side is willing to forgive.

Only the trusted can betray

The leader who can get away with doing what his side dislikes is usually the one his side trusts the most.

In May 1998, Atal Bihari Vajpayee tested nuclear weapons at Pokhran, and no one in his camp would ever again question his nerve. Nine months later, on 19 February 1999, he took a bus to Lahore, stood at the Minar-e-Pakistan, the monument to Pakistan's founding, and wrote that a stable, prosperous Pakistan was in India's interest. No leader with softer credentials could have made that journey, wishing for a prosperous Pakistan, and survived it at home. Vajpayee could, because he had banked the trust first. Kargil came three months later, but that gesture still stands as the high-water mark of the Indo-Pak relationship.

The same logic opened the economy. The party that had built the licence raj was the one that could dismantle it. The 24 July 1991 budget, presented by Manmohan Singh as finance minister in PVNR’s cabinet and now hailed as historic, came from inside the house that built the old order, which is why the house could not stop it.

Your own will forgive you

Your own people hold your capital, and that shows you exactly where you can use it.

When high-value currency notes, which accounted for 86% of the currency in circulation, were withdrawn overnight in November 2016, the pain was felt everywhere, and the big state elections months later were won anyway. It looked as if the country had forgiven the cost. A careful study of survey and election data later showed what the headline concealed. Where the pain was worst, the governing alliance lost votes and seats. In its strongholds, it had almost no effect. The committed weighed the policy against everything else they believed about the party and the leadership, and forgave it. The less committed punished it.

Both things can be true at once. Your own supporters will accept the cost you ask them to bear. Everyone else will make you pay for it.

Spend it out loud

Leaders who increased their capital did it openly, with conviction, and in front of their own supporters.

In 1969, Indira Gandhi spent her capital with her party's elders. She nationalised the banks and moved against the princes' privy purses, and the party president expelled her. Most MPs and workers walked out with her. Two years later, on the promise of "Garibi hatao", her faction won 352 seats. She had spent the old guard's patience and converted it into the voters' patience.

In 2008, India's quietest Prime Minister risked his government on a nuclear deal that his own allies disliked. The Left withdrew support, and the government faced a confidence vote on 22 July. It survived, 275 to 256. A year later, his party returned with 206 seats, up from 145. When a leader spends capital openly on something they can explain and defend, it often comes back with interest.

The ways to go bankrupt

There are four ways to lose capital, and Indian politics has shown all of them.

If you spend capital without a story, someone else gets the credit. That happened to PVNR. He quietly pushed through reforms, making them seem like business as usual even though they changed everything. This helped avoid opposition, but it also meant no one took ownership. So when problems came up later, the reformer took the blame alone.

If you spend capital on both sides at the same time, both sides stop trusting you. In 1986, Rajiv Gandhi's government passed a law overturning the Supreme Court's Shah Bano judgement, and within months, the locks at the Babri Masjid were opened, which many saw as a gesture to the other side. A government that tries to please everyone often ends up trusted by no one.

Spend it on people who were never asked, and you will have to take it back. The government passed the farm laws in 2020 without including the farmers they affected most. After a year of protests at the capital's gates, the government repealed the laws. On 19 November 2021, the Prime Minister said that perhaps something was missing in the government's tapasya, which is why it could not convince some farmers. A government with an enormous majority had discovered that seats are not the same thing as patience.

The most costly mistake is turning capital into control. In 1971, Indira Gandhi won one of the biggest mandates in Indian history. Four years later, she declared an Emergency, suspended civil liberties, and silenced the press. This was capital turned into coercion. In the 1977 elections, after the Emergency was lifted, voters ended her rule, and she lost her own seat. Capital turned into control is spent at the worst exchange rate politics offers.

How long will your own carry the cost?

So the real question for any government isn't whether people will accept a cost, but how long they will keep accepting it.

People will keep supporting you as long as defending you is easier than admitting they were wrong. This balance changes in three ways: when the cost hits their own lives, like their child's exam, their fuel bill, or their own wait in line; when someone they respect on their side speaks up first, making doubt feel less like betrayal; and when you embarrass them for defending you in front of family, colleagues, or neighbours.

When that happens, patience does not fade slowly. It snaps. The voter stops defending you and starts protecting her own judgement. The fastest way to do that is to leave behind the choice that now embarrasses her.

Capital spoils

One more thing about political capital that most governments overlook: it does not last.

Leaders often treat political capital like savings, thinking they can save it for the right time, a safer year, or the next term. But capital is not money in a vault. It is patience, and patience gets used up by everyday disappointments, whether you spend it or not: the price that did not drop, the job that never came, the local party worker in your village who overnight sold his old scooter and bought a shiny new Toyota Fortuner, or the local leader who went from bhaiya to sahab. Governments that wait for a safer day to use their capital often find that day never comes, and their capital quietly disappears.

In my opinion, most governments die rich, with their capital unspent, saved for a moment that never comes.

The richest government in a generation

No government in almost forty years has come to power with more capital than the one elected in 2014. It won 282 seats on its own, the first single-party majority since 1984, and in 2019 it won 303. Its supporters trusted it more than most governments. I am listing facts below. Readers can decide what they mean.

In 2024, the party dropped to 240 seats and now governs with allies, as an NDA government rather than the "Modi sarkar" its campaigns once promised. Within a week of the results, a column in the RSS's magazine complained that the party gave defectors more importance than loyal workers and imposed candidates over local leaders.

In three rounds of the country's most-quoted national survey up to August this year, the Prime Minister's performance rating dropped from 58 to 51, and satisfaction with the government hit its lowest point since 2016.

The government introduced petrol mixed with a fifth ethanol without asking motorists who would pay, and prices did not go down. When drivers said their mileage was falling and their engines were giving up, officials dismissed the complaints as misinformation, and the minister responsible said a paid campaign was being run against him on social media.

In July, a movement with no party, no office, and no clear funding helped force a Union minister to resign.

The government changed its long-standing opposition to a caste census, a demand its leaders had rejected for years.

The time allowed for online platforms to remove content the government objects to has been reduced to three hours.

This pattern is not limited to one party. In May this year, two governments from the other side, in Bengal and Kerala, lost power after long periods in office. Both had once enjoyed strong loyalty. Both ended with their own workers leaving, their capital used up long before the votes were counted.

The question that matters

Every leader with a majority is asked how much capital they have. That is the wrong question. The real question is harder: what are you spending it on, and whose patience are you using? Do you spend it on your own supporters, who will forgive you, or on people you never consulted? Do you spend it openly, with a story your side can repeat, or quietly, so someone else tells it later? Do you spend it on something your people will be proud of, or does it slowly turn into control?

Some governments die rich, their capital unspent. Others die broke, having spent it on the wrong things. Anyone who pays attention can see the difference years before the election.