Road To 2024: Can Economic Performance Impact a Party’s Chances of Winning?

Price rise, unemployment, poverty, and agricultural distress are among the most pressing problems to feature across surveys. Both the Congress and the BJP have initiated a back and forth over which regime performed better economically, the UPA government under Manmohan Singh or the NDA dispensation led by Narendra Modi. This piece will focus on how economic performance, mainly GDP growth and inflation, correlates to Lok Sabha election results.

We analyze data from the 1971-77 election cycle onwards as before that, the Congress was in power uninterruptedly. The Congress faced a defeat in elections, paving the way for the first-ever non-Congress government. It faced a rout in the 1980 general elections, though the party had split due to differences within the top leadership.

The Congress went on to win big in the general elections that year, helped by a sympathy factor. Their government was ultimately voted out, though also helped by the sympathy generated after Rajiv Gandhi’s assassination. Rao’s government went on to face a defeat, and Vajpayee eventually lost the no-confidence motion by one vote, during a period of high inflation.

The analysis shows that a government is likely to be voted out whenever GDP growth under it is lower compared to its predecessor’s, which 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, while the second term has seen higher inflation.

Given the effects of the Covid-19 pandemic, the last couple of years have witnessed governments delivering lower growth returning to power in a few countries. 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.