Opinion | Road To 2024: Can Economic Performance Affect A Party's Winnability?

With less than 10 days left for the first phase of polling for the upcoming Lok Sabha elections, India's key rival parties, the Bharatiya Janata Party (BJP) and the Congress, have sharpened their focus on economic issues. Price rise, unemployment, poverty and agricultural distress are among the most pressing problems to feature across surveys. 

Both the Congress and the BJP have begun a war of words over which regime performed better economically, the United Progressive Alliance (UPA) government under Manmohan Singh or the National Democratic Alliance (NDA) dispensation led by Narendra Modi. The Congress's manifesto promises to propel the Indian economy to greater heights through jobs-led growth and by turning the country into a manufacturing powerhouse. On the other hand, though the BJP is yet to release its manifesto, PM Modi has promised to make India the third-largest economy in his third term, and a developed one by 2047.

A lot has been written about the Manmohan Singh and Modi regimes. This piece will focus on how economic performance, mainly GDP growth (average numbers used everywhere) and inflation, correlates to Lok Sabha election results. We analyse data from the 1971-77 election cycle onwards as before that, the Congress was in power uninterruptedly.

• 1977: During the 1971-1977 tenure of Indira Gandhi, the GDP growth was 2.7%, much less than the 5.7% recorded in her previous term in 1967-71. She went on to face a defeat in elections, paving the way for the first-ever non-Congress government. 
• 1980: In 1977-80, the Janata Party government delivered a GDP growth of 2.6%, just 0.1 percentage points lower than its predecessor. It faced a rout in the 1980 general elections, though the party had split due to differences within the top leadership.
• 1984: During 1980-1985, the Indira Gandhi government recorded a higher GDP growth of 5.5%, though her tenure was cut short when she was assassinated in 1984. The Congress went on to win big in the general elections that year, helped by a sympathy factor. To note, elections were held in the last week of December 1984, instead of three quarters, all four quarters in the financial year have been attributed to Indira Gandhi for ease of analysis).
• 1989: Rajiv Gandhi delivered a higher GDP growth of 5.9% in 1985-1989, but he was still defeated in the 1989 polls, in large part due to the Bofors scandal. 
• 1991: The Janata Dal years under V.P. Singh and later Chandra Shekhar registered a lower GDP growth of 5.7%. Their government was ultimately voted out, though also helped by the sympathy generated for the Congress after Rajiv Gandhi's assassination. 
• 1996: The father of economic reforms, P.V. Narasimha Rao achieved a GDP growth rate of 5.1% between 1991 and 1996, slightly lower than what the government preceding him could achieve. Rao's government went on to face a defeat. 
• 1998: In 1996-98, the Janata Dal governments led by H.D. Deve Gowda and I.K. Gujral registered a higher growth of 5.8% but still lost due to instability.
• 1999: The Atal Bihari Vajpayee government saw a higher growth of 6.2% in 1998-99 and it won the snap polls precipitated by the withdrawal of Jayalalithaa's support. Vajpayee eventually lost the no-confidence motion by one vote. 
• 2004: At 5.8%, the GDP growth during 1999-2004 was lower. Vajpayee lost despite his 'India Shining' campaign. 
• 2009: The UPA-I in 2004-09 achieved higher GDP growth of 6.9%, thanks partly to the base set by Vajpayee, and went on to win a second term. 
• 2014: During 2009-14, Manmohan Singh in his second term delivered a lower growth of 6.7% and lost the election. This was also a period of high inflation. 
• 2019: Narendra Modi delivered a higher GDP growth of 7.4% in 2014-2019 and was accorded a second term by voters.
• 2024: Over the last five years, according to available data, the Modi government has seen lower growth compared to its first term, in large part due to the COVID-19 pandemic. 

The above data shows that a government is likely to be voted out whenever GDP growth under it is lower compared to its predecessor's. This happened six times, in 1977, 1980, 1991, 1996, 2004 and 2014. In contrast, governments that managed to improve the country's growth rate went on to win four times, in 1984, 1999, 2009 and 2019, though they also lost twice in 1989 and 1998. 

Notably, inflation and electoral outcomes do not indicate any clear correlation. Governments that have recorded lower inflation have lost four out of six times in 1977, 1989, 1996 and 2014, despite a better performance on the front. On the other hand, governments with higher inflation have also been punished in four out of six elections, in 1980, 1991, 1998 and 2004. 

The Narendra Modi government's first term was marked by low inflation. During this period, the general consumer price index (CPI) rose by an average of 4.3% per year. However, its second term has seen CPI inflation average 5.77%. 

Worldwide, given the ravages of the Covid-19 pandemic and the possibility that people have been more forgiving, the last couple of years have witnessed governments delivering lower growth returning to power in a few countries. This was seen in Turkey and Canada, though in the US, Donald Trump lost the Presidential Polls in 2020. 

It remains to be seen how inflation and economic growth affect the Modi government's prospects in the upcoming elections in India. 

(Amitabh Tiwari is a political strategist and commentator. In his earlier avatar, he was a corporate and investment banker)

Disclaimer: These are the personal opinions of the author.