Lok Sabha Elections’
Economy’s performance driving Voting behaviour
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BY MANSI JHA/ JANUARY 3, 2024
ndia’s rising GDP growth rate, sufficient forex reserves, inadequate industrial production and manufacturing growth, and mounting inflation are all in the news, and so are the impending elections. During the 1st Lok Sabha election India had 17.32 crore registered voters and now, as we approach the 18th Parliamentary election the voter count has increased to 94.50 crores. This highlights the trajectory of India becoming the largest democracy in the world.
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While parochial considerations have historically held sway over voters' decisions, the evidence from previous elections suggest that macroeconomic realities are largely relevant. India's upcoming 2024 parliamentary election stresses on the importance of efficient economics shaping effective policies.
The 2014 pre-election survey, conducted by the Centre for the Study of Developing Societies (CSDS), suggests that macroeconomic indicators play a significant role when voters choose their next representatives. When asked about the dominating factor influencing their decision in the election, most of the responses were tied to concerns about economic development. This, in turn, shapes the campaign messages of the major parties.
In India, votes are based on retrospective evaluations of the economic condition of the country rather than on the expectations citizens have from the government.
In India, votes are based on retrospective evaluations of the economic condition of the country rather than on the expectations citizens have from the government. Macroeconomic indicators, such as the growth rate, inflation, unemployment rate, fiscal deficit, and welfare programmes significantly influence voting behaviour during elections. Since the voters hold the incumbent party responsible for the existing state of the economy, most political parties compete in elections by promising to provide voters with policies that will deliver greater economic prosperity. If the government fails to deliver on its electoral promises, voters could be expected to drop their support for the existing party and switch their vote to one of the opposition parties.
During former Prime Minister Manmohan Singh's second term in office, there was a sustained decline in his and the UPA's popularity among Indian citizens. The contributing factor was the state of the economy, which initially came about with the global financial crisis of 2008–09 and subsequently was triggered by diminishing economic growth, elevated costs of essential commodities and energy resources, and the presence of high-interest rates that deterred investment. Ultimately in 2013, the Congress Party suffered electoral setbacks in several crucial state and territory elections, including the loss of its stronghold in Delhi.
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Furthermore, since the 2000s, there has been a rising trend of voters favouring governments that have delivered higher economic growth. A study examining the outcomes of 422 candidates in India's parliamentary elections in 2009, revealed that candidates representing incumbent parties in states with robust economic growth have substantially better chances of winning compared to those in states with lower growth rates. This highlights the pivotal role that economic prosperity plays in shaping electoral outcomes in India.
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Furthermore, since the s, there has been a rising trend of voters favouring governments that have delivered higher economic growth.
The elected government is ultimately expected to look after the proper management and implementation of the schemes. For instance, economic reforms initiated since the 1990s became an issue in the 1996 general elections for the Congress party. The party's defeat and subsequent slide in parliament were attributed to its introduction of liberalisation and privatisation policies in its manifesto. If we look at the opinion of those who were aware of such policy changes, we find that there was not much support for economic reforms which adversely affected the votes for the Congress party.
At an individual level citizens largely use the growth of their personal income as a benchmark in gauging the government's performance, and this parameter has also been prominently featured in numerous studies to examine the impact of economic conditions on elections. “This examination of the effect of both ‘national’ and 'personal' conditions in the economy on voting decisions in the 2009 Lok Sabha elections demonstrated that the perceptions of people on economic issues do matter in deciding whom they vote for. While both national and personal considerations have an effect on voting, the latter seems to matter more to Indian voters than the former.” (Suri, 2009) The significance of the annual rate of change in real disposable per capita income lies in its function as an effective summary of the national economic landscape, taking into account factors such as inflation, wage and unemployment rates among others, all of which contribute to the determination of real personal income. As a result, it provides voters with a scope for retrospective evaluation and making informed decisions during elections.
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As the 18th Lok Sabha election approaches, the global spotlight will be on India. Every Indian is familiar with Prime Minister Narendra Modi's remarkably successful 2014 Lok Sabha campaign slogan, 'Acche Din Aane Wale Hain' (Good Days Are Coming). In his Independence Day speech in 2023, Prime Minister Modi emphasised India's economic progress, stating, “When we came to power in 2014, we were at the 10th position in the global economic system. Today, with the efforts of 140 Crore Indians, we have reached the fifth position. It is Modi’s guarantee that India will be among the top three economies in the world in the next 5 years.”
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The existing government at the Centre has consistently signalled a message to project ‘positive optimism’ and strength particularly to those who see India as a promising hub for economic growth. However, India’s economy is not at its best. Nearing the 2024 Lok Sabha election cycle, we may witness an increase in rhetorical activism, gimmicks over reality, fiction over fact. A closer examination of India's macroeconomic data presents a different picture.
Nearing the Lok Sabha election cycle, we may witness an increase in rhetorical activism, gimmicks over reality, fiction over fact.
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According to a Bloomberg report the overall unemployment rate in India is 7.95 % as of July 2023. And at the same time as per a report published by McKinsey, India needs to create at least 90 million more nonfarm jobs by 2030 to tackle the situation. India's GDP growth rate rose to a pace of 7.8% in the April-June quarter of 2023 which indicates that the nation is largely facing a jobless growth scenario. The tightened monetary policy stands out as a significant factor contributing to the accelerating non-performing assets (NPAs) within Indian banks. It has changed its form reaching unprecedented levels, often favouring conglomerates at the expense of others. The growth in corporate sectors is engulfing the existing unorganised sector which has further aggravated wealth disparities in the nation. Consequently, GDP growth alone does not adequately reflect the living standards of marginalised sections of society. In terms of per capita income, the Indian economy ranks 138th globally, and for the marginalised population, the distinctions of being the fifth or third largest world economy provide little consolation.
The point being made here is that the macro-level indicators have several discrepancies representing faulty data. Further, there are contradictions in the official claims. Even when considering social welfare initiatives such as the Jal Jeevan Mission, Ujjwala Yojana, Jan Dhan Yojana, and Swachh Bharat Mission, which have significantly improved the lives of the most disadvantaged there exist several issues and disparities that need to be addressed. The lack of proper implementation, inadequate funding, poor targeting, and cronyism, among others, are the impediments that require immediate attention from policymakers.
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It is high time for political parties to present well-crafted, innovative economic agendas that address the aforementioned challenges faced by the Indian economy.
The forthcoming Lok Sabha election demands a clear and cohesive economic plan and a constructive technique to foster economic change offering an opportunity to the electorate to not just focus on growth, but also on inclusivity and equitable development. It is high time for political parties to present well-crafted, innovative economic agendas that address the aforementioned challenges faced by the Indian economy. This approach should encompass both short-term and long-term perspectives, providing more than empty promises and rhetorical hype. A successful democracy thrives on checks and balances, which highlights the necessity for robust opposition pressure during elections. In an election year, government expenditure increases showcasing a trend that exacerbates inflation rather than catalysing economic growth, indicating that the extra public expenditure ahead of polls is largely wasteful. Improving transparency and accountability in public expenditure can curb this wastefulness. Hence, elections should ideally function as a constructive mechanism for advancing the nation's welfare, rather than just making it a game of victory or defeat.
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Keywords
2024 Lok Sabha elections, CSDS, economic growth rate, Indian citizens, sustained decline, Income, Bloomberg report, welfare schemes, Manmohan Singh, voters, liberalization and privatization, GDP
References
Luthra, S. (2013, November 13). India's Upcoming Elections Will the States and the Economy Decide? The National Bureau of Asian Research.
https://www.nbr.org/publication/indias-upcoming-elections-will-the-states-and-the-economy-decide/
Becher, M., & Donnelly, M. (2013). Economic Performance, Individual Evaluations, and the Vote: Investigating the Causal Mechanism. The Journal of Politics, 75(4), 968–979. https://doi.org/10.1017/s0022381613000959
Kumar, S. (2004). Impact of Economic Reforms on Indian Electorate. Economic and Political Weekly, 39(16), 1621–1630.
http://www.jstor.org/stable/4414902
Bhattacharya, P. & Krishnan, R. (2014, April 14). How Do Elections Affect The Economy? Mint.
https://www.livemint.com/Politics/RRDNEebSEiPECEiclpqZmM/How-do-elections-affect-the-economy.html
Mohan, D. (2023, August 26). The Electoral Battle For 2024 Merits A Deeper Reflection On The State Of India’s Economy. The Wire.
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https://carnegieendowment.org/2013/12/19/does-good-economics-mean-good-politics-in-india-pub-53988
Mukhopadhyay, P. & Lolayekar, A. (2017, November 10). Does The Economy Really Matter When It Comes To Winning Elections In India? The Wire.
https://thewire.in/economy/economy-really-matter-comes-winning-elections-india
Poonawalla, S. (2021, October 11). Modi’s nine schemes that have made him the champion of the poor. The Times of India.
Kumar, A. (2023, August 18). The Hollowness Of The Modi Government's Tall Claims And Self-Praise On Economy. The Wire.
https://thewire.in/economy/the-hollowness-of-modi-governments-tall-claims-and-self-praise-on-economy
SURI, K. C. (2009). The Economy and Voting in the 15th Lok Sabha Elections. Economic and Political Weekly, 44(39), 64–70.
http://www.jstor.org/stable/25663597
Markus, G. B. (1988). The Impact of Personal and National Economic Conditions on the Presidential Vote: A Pooled Cross-Sectional Analysis. American Journal of Political Science, 32(1), 137–154.
https://doi.org/10.2307/2111314
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