India’s electoral undercurrents have never been as unfathomable or inscrutable. Just four months ago, India delivered a verdict which was totally against the run of play. The mighty Narendra Modi was thought to be roaring towards an Indira Gandhi-esque tally of 350 for the BJP in Lok Sabha. The exit polls added delicious grist to this overwhelming expectation.
But on that fateful morning of 4 June 2024, India watched astounded as the EVMs spewed a completely contrarian picture. Prime Minister Modi lost his parliamentary majority and suffered a 0.7 percentage points’ erosion in vote share compared to 2019.
Whoa, how the truth was stranger than fiction on that day! Once believed to be immortal, Modi’s Teflon had ultimately proved to be vulnerable and brittle. If anybody had even casually suggested such an outcome before the polls, s/he would have been labelled a lunatic.
And what about the Congress? That poor, malnourished, forever shrinking political entity, which was written off, but it bounced back with a 1.9 percentage points’ gain in vote share, the first time in 15 years that such a “freak” phenomenon had occurred.
When pollsters and pundits regained consciousness, the collective wisdom of hindsight was that political ennui with Modi’s BJP and economic distress had caused an electoral outcome that everybody was too blindsided to spot.
Haryana’s Rebuke
This comfortable consensus got a rude shock four months later in Haryana. Once again, against the run of play and exit pollsters, a resurgent Congress, projected to win a two-thirds majority, crumbled at the finish line. The wisdom of the first hindsight now collided with the wisdom of the second hindsight. Which one was the aberration? The wisdom which thought that ennui and distress had dethroned Modi’s BJP in June? Or the wisdom which proclaimed that Modi’s BJP had gotten its mojo back in Haryana, proving that the Lok Sabha erosion was just a momentary setback?
Frankly, the Haryana outcome is squarely in the grey. After getting walloped 1-9 and 0-10 in two successive general elections of 2014 and 2019, the Congress came back strongly in 2024 to level 5-5 with BJP. It gained an unbelievable swing of 18.75 percentage points, while BJP lost 11.91 percentage points out of its nearly 58 percent vote share in 2019, putting the two contenders at roughly 47 percent apiece in vote share, with the Congress’s nose a tad ahead.
It was difficult to refute the logic of these stats – the Congress was supremely on the ascendant.
The assembly elections which followed four months later again showed the two parties in a dead heat at about 39 percent each, with the BJP’s nose a tad ahead now. Both parties had lost about eight percentage points each to regional outfits and independents. In substantive terms, neither party could claim that it had gained or lost since the general elections, so no real tide had turned. In fact, the tide seemed to have been arrested and frozen at the Lok Sabha point.
Spookily Close Contests
What lends even more credence to the “frozen” political state is how spookily close the contest was. After winning 37 seats, the Congress lost the next nine, ie seat numbers 38 to 46, by a total of only 23,000 votes. And the following 13, from seat numbers 47 to 59, by a mere 47,000 votes.
Overall, the Congress got two million votes more than in 2019 – if only a hundred thousand of these voters were concentrated in these 22 hyper-close seats, the Congress could have romped home with a huge victory.
I know this analysis is simplistic; but I am deliberately juggling these numbers in an amateur manner to show that what the BJP achieved was a “tactical” victory. It completely outscored the Congress in political micro-management and hard-nosed, constituency-level caste arithmetic, voter profiling, and mobilisation. The Congress, on the other hand, was certainly popular, but stuck to old-school, complacent, and leaden-footed politics.
Thus, the BJP scored a tactical victory. There is little evidence to prove that the political tide that had built up against it in June 2024 has decisively reversed. At best one could claim that it has flattened out. To project any other verdict, we shall have to wait for Maharashtra.
Economy is Stressed, Stupid!
Now let’s turn to economic distress, the second phenomenon that caused the Modi juggernaut to stall in June 2024. Here the data is sharp and irrefutable.
Car sales are a quick and dirty barometer of an urban economy’s health. By that yardstick, we are indisposed. The red hot segment, premium SUVs, has seen a drop in sales by 18 percent in the first five months of the year. Hold your breath – midsize Sedans are down 55 percent. The other red-hot sector, residential housing, saw a drop in double digits. Consequently, both home and auto loans have fallen.
And the reddest of all hotties, the iPhone 16 Pro, saw sales down 12 percent in the first week of pre-sales.
India’s external sector is in clear distress. Merchandise exports in August took a $4 billion tumble, while petroleum and gem/jewellery exports plummeted over 37 percent and 23 percent. Little wonder that the monthly trade deficit kissed the red-light number of negative $30 billion. Growth in GST collections slumped to a 40-month low. The core sector shrunk by 1.8 percent, with output volumes in coal, crude oil, natural gas, refinery products, cement, and electricity declining.
Even the crimson-hot stock markets have sold off, with retail investors giving a thumbs down to the Hyundai issue. Those who were adventurous enough to buy saw their corpus take a big hit – even as their food bills rocketed with high food inflation.
Politics - Unclear; Economic Stress - Palpable
So, is our economy in distress? Not yet. There are some bright spots, like high direct tax collections and a leashed fiscal deficit. Even the burgeoning forex reserves, at $700 billion, are a blessing.
As we wait for the Maharashtra election to clear the political fog, the fact that our economy is stressed (if not distressed, yet) is palpable. It would be hasty to write off the adverse political tide of June 2024 as an aberration that has gotten arrested or reversed.
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