Political Expert speak: Takeaways from session with Dr. Rahul Verma

27 Mar 2024 , 10:38 AM

Analysts of IIFL Capital Services recently hosted Dr. Rahul Verma, Fellow at Centre for Policy Research (CPR) for investor meetings. Key takeaways from the discussions include: 1) BJP likely to repeat a seat tally similar to 2019; chances of >340 and <272 seats are highly unlikely. 2) Given the current wide gap between vote share of the BJP and Congress, a surprise outcome like in 2004 is also unlikely. 3) He does not believe that a significant chunk of the electorate tends to vote very differently in the state and Centre elections. 4) Welfare/social schemes agenda of the BJP and PM Modi likely to continue in the third term, and reforms could gather pace.

2024 election outcome to be largely similar to 2019:

Dr. Rahul Verma believes that the BJP is likely to come back to power with 303 seats (+/- 15 seats); in line with last election results. The 2 Standard deviation number of <272 seats & >340 seats, though not impossible, is a very unlikely outcome. He believes that though there will be increase in vote share for the BJP (vs 2019), it may not necessarily lead to an increase in seats. This is because BJP may end up contesting more seats or the winning margin in seats may only see an increase. Further, in the 2019 elections, Congress lost only 44 seats with <10% margin. So, even in case there is a 10% swing in favour of the Congress in those seats, their tally could move up from 50 seat to 90 seats. He believes that overall, Congress will continue to get weaker. While some regional parties will remain in the same position and some may become weak, just like in the last 10 years.

Less chances of a big shakeup; 2004 kind of surprise unlikely:

The uncertainty around BJP’s majority number is low in 2024, as the gap between the BJP and Congress vote share currently is very stark, unlike during 2004 elections. In 2019, the vote share for BJP & Congress was 37-38% and 18% respectively vs ~25% for both BJP & Congress in 2004. Further, there was 6-7% jump in voter turnout between 2009 and 2014 and a 2% jump between 2014 & 2019. In 2014, BJP was able to mobilise new set of voters, due to higher voter turnout. BJP disproportionately benefits when there is sharp increase in voter turnout, which may not happen in the 2024 elections.

Voters do not vote very differently in State and Centre elections:

Contrary to the popular opinion, Rahul does not believe that a significant chunk of voters tend to vote differently in the Centre & State elections. According to him, the difference in outcomes is not a function of split voting, but of a split outcome. For instance – Odisha goes to general & state polls at the same time. In 2019, BJP did well in Lok Sabha in terms of the number of seats won, while Biju Janta Dal (BJD) swept the Assembly elections. However, the vote share movement was only ~2% from BJP to BJD in the state elections; though a disproportionate effect was seen in the number of seats. This may be because in Assembly elections, smaller players/ independents also get votes — leading to much more fragmented results vs when it comes to central elections, where it largely comes down to a two-horse race.

PM and his govt to continue being a welfare state in its third term:

Rahul believes that the welfare state pool in India may remain large. Governments have realised that the state has to be a regulator of capital and find a way to reach the poor; otherwise there could be social unrest. There is now also a global consensus on this, especially post the global financial crisis. However, PM Modi will also don the reformist hat as he realises that only economic prosperity can lead to India becoming a global player.

Partisanship of the electorate:

Rahul highlighted that a large part of India electorate is partisan in nature, based on various surveys and anecdotal evidence. For ex: there is issue rationalisation happening; this means you first select the party and then speak on issues. The attachment of people with their parties is getting stronger. This is now getting reflected in their personal relationships as well, with increasing number of Indians putting ideological leanings on dating apps (was already common in USA), and nearly third respondents according to a survey having faced strained relationships due to political leanings.