This is why education is not an election issue in India

A couple of years ago I ran a simple correlation between % of graduates in a State and per capita GDP. The correlation was an astounding 93%. Now, income and wealth cannot be all driven by education but let me show you an interesting case study to illustrate the importance of education as an economic driver but not so as an election issue

Let us take Surat and Vizag

Surat is the poster boy of the Gujarat Model in many ways. Despite GST and Demonetisation, Surat voted fully for the BJP. It had a population of about 6.1m voters in 2011. In 2017, 4.3 million voters registered for the Gujarat election.

Vizag is a warm seaside city in Andhra Pradesh. Apart from the large Naval facility, it also houses the Vizag steel plant and a whole host of Tech firms (smaller units). It is also a port gateway for mines in Chhattisgarh and Southern Odisha. It has a population of about 4.3 million. About 3.3 million registered for the 2014 election. In the 2014 Assembly election TDP won 11 of the 15 seats while BJP won 1 seat, YRSCP won just 3 seats. YSRCP in a way had taken over the entire Congress base.

Both cities have excellent infrastructure. Vizag is ranked 3rd on Swacch Bharat rankings while Surat is ranked 4th. Both cities are a part of the smart cities mission.

Let us compare a few metrics between Vizag and Surat

1. Bank Deposits and Credit

Surat is ahead on per capita deposits by 3% but I suspect the real gap would be in favor of Vizag owing to the slower population growth in Vizag versus Surat. That said, the gap in current account deposits is quite stark between Surat and Vizag. This is in line with the anecdotal evidence that Surat is quite business oriented. Another way to look at this is in terms of absolute amounts

While Surat has only 1.42 times the population of Vizag, it has 2.6 times money in current accounts

However, when it comes to Savings and term deposits, Vizag takes a marginal lead, reducing the overall gap significantly.

While Surat has only 1.42 times the population of Vizag, it has 1.37 times money in savings/term deposit accounts

On the other hand, when it comes to credit, Vizag is atleast 10% higher than Surat. One thing we know is that Vizag is probably not putting a lot of money in business when compared with Surat (as we saw in terms of the Gap), so where is Vizag investing?

2. Property Prices

Surat district has a population density of 1376, while Vizag has 384 people per square kilometer. However, NHB reports that the average price per square feet of carpet area is almost the same (Surat is higher by Rs 120) in both cities and that Vizag has grown at almost double the pace of Surat. One can hypothesize that Vizag is aggressively investing in property driving up the property prices in spite of having far fewer people per square kilometer in the district.

In 2016, real estate made up for 8.3% of AP's GVA while it made up for 5.8% of Gujarat's GVA. In 2013, the absolute GVA of real estate of AP was much lower than Gujarat, today it is higher

So one thing is clear from the above data, wealth does not come from business alone. It can be generated in numerous other ways. Salary, real estate investments and stock market investments being the other. Unfortunately, we donot have data for Mutual Funds and Stocks in case of Surat or Vizag to take that forward. I am not using consumption metrics because there are cultural differences that could be at play.

Coming to the issue of graduates, a much larger proportion of population in Vizag are graduates.

3. Share of Graduates

Further, there are 2.4 times more engineeing graduates in Vizag than in Surat.

In Sum, both Vizag and Surat are doing well though their drivers are quite different. One is driven by business enterprise and the other by education. But why is that voters in Vizag are voting out the ruling party?

If education is a key driver of success but only 24% of graduates (approximately) are going to a Government college (many of which may have been set up long ago), the connection to Governance is quite low. Other factors (like reservations, jobs and cost of living) become much more important in the voter decision making. Given the low levels of entrepreneurship, the dependence on the Government on creating jobs is much higher than say Surat. Over the last 5-6 years, the ability to create jobs or offer more reservations has been quite limited.

Job creation therefore becomes a much bigger factor in States where education is higher and not education itself.

Secondly, those who are less educated think it is upto them to study harder as the number of seats available is quite adequate at this moment. This too makes education less important as a driver in voting decisions

So, while education is an important driver of the economy, it becomes less of a driver in voting decisions or in terms of the electoral strategy of parties. The risk is (and is visible in Gujarat) that States that are placing lesser emphasis on driving education (because of poor linkage of electoral results) are slowly slipping in economic ranks as well.