Mapping Clayton Christensen's Disruption Strategy to the AAP win in Delhi

Hypothesis:

AAP is like a disruptive startup, which pivoted between AAP 2 and AAP 3. They are targeting the section of voters for whom pricing of every day services & goods is key. Eg. users of Metro, bus, Mohalla Clinics, School etc and for whom free electricity, free travel , free water, brings in immediate value from wallet savings.

In India, these users form a significant % of the population, especially those who are working as salaried employees. Service Sector is the highest employer in Delhi and contributes 83.6% of the GDP. While per capita income is 3 times the National average, any employee would benefit from additional savings from freebies.

Having retained his core base, now AAP is moving up the customer pyramid by appealing to middle class and upper middle class voters with promise of harmony in addition to more money in the wallet. 

The opposition parties continued with themes, which the middle and top of the pyramid identify as voting priority - viz National Security, CAA, Ram Mandir, but possibly viewed as lower in the priority by the lower middle class, as against money in the wallet.

This meant AAP, meanwhile added the upper middle class voter to its traditional lower middle class and crossed 50% of the total vote. Someone in AAP has been reading Clayton Christensen.

More Income to Spend as migrant population increases: Voter base grows slower than rest of India:

Interestingly, Delhi earn its tax revenues from GST - 38% and 31 % from VAT (liquor and fuel sales) . As more people migrate to Delhi, its tax revenue continue to increase. By avoiding corruption in Govt tenders, GST continues to rise. Therefore, AAP has money to spend on Free Electricity, Free Metro, Free Water and Mohalla clinics. The logic is: Make it easy for people to transact their time and consumption. The GST income will cover for easing transaction costs. Eg. I would eat at restaurants if I saved on travel.  

Unlike other states, which spend 3 % ~ 6.5 % of Revenue on Police, in Delhi, the Central Govt takes care of security expenditure. Delhi is 13th on the list of GDP for states in India and has about 1.8 Crore population and income of 61,000 Crores. In comparison, Chhattisgarh has 2.8 Crore population and Income of 31,000 Crores / Haryana 2.7 Crore population & 70,000 Crore income and Punjab 2.98 Crore / 52,000 Crore Income.

In addition, the other benefits that Delhi gets yearly are around 750 Crore as central assistance and central funding of JNU, IIT etc. central institutes. So for AAP to spend on Mohalla Clinics / Free transport is not difficult, but a very smart decision to consolidate their voter base.

Given the count of Central Govt employees & transferable non-voting Security & Armed Forces personnel in Delhi – serving & retired - who contribute to GST, but no burden on Salary or Pension, Delhi's income will continue to rise and so will freebies. AAP should win the next 2 terms at least until Arvind Kejriwal is 65 years, since once a voter is used to freebies, they will not give them up. Hence, the emerging bromance & photo-op by AAP with BJP as AAP has no need to disturb a symbiotic relationship by picking up issues, which do not contribute to Delhi’s income. Eg. CAA, Article 370 etc.

Finally, while the population of Delhi will expand, the voter count at election time will not increase significantly – voter apathy and transaction costs of getting an updated EPIC/ voter id card for a migrant are quite high. You need to delete and update by diving into the depths of Indian Govt offices across regions. Never happens.

Conclusion: Migration to Delhi is an option to cut down on Transportation, Health and Education costs, if the tradeoff impact of air pollution is manageable. Compounded savings in income, over 10 years can be significant, with in-tangible upside of living in the Capital city of the world’s largest democracy.