Analysing seat-wise arithmetic & sensitivity for I.N.D.I.A in 2024: IIFL Capital Services

31 Aug 2023 , 11:27 AM

Analysts of IIFL Capital Services analysis of the past Lok Sabha elections suggests that Indian National Developmental Inclusive Alliance (I.N.D.I.A) is unlikely to dent NDA’s prospects of achieving a comfortable majority in 2024 elections, even assuming a largely unlikely scenario of complete vote transfer between the alliance partners. Even assuming an additional vote share swing of ~2ppt in favour of I.N.D.I.A as a best case scenario for the opposition, NDA is set to comfortably retain majority aided by >50% vote share in 224 seats in the 2019 elections. The upcoming 5 state polls (end CY 2023) could be a mixed bag for the BJP, but that is unlikely to have a meaningful impact on the outcome of the 2024 elections. 

I.N.D.I.A alliance still in formative period: 

The Indian National Developmental Inclusive Alliance (I.N.D.I.A) is the united opposition front of 26 political parties and replaces the exiting UPA alliance, led by the Indian National Congress. This alliance aims to contest only the 2024 Lok Sabha elections against the ruling NDA government; may not be coming together for the state elections. The alliance was formed in June 2023 in Patna; held its second meeting at Bangalore and is now holding its third meeting in Mumbai from 31 Aug to 1 September. The contours of the alliance have to be still worked out. As per media reports, the I.N.D.I.A alliance would have secured 38% vote share in 2019, and could have secured 158 seats. 

NDA comfortably placed in 2024, for now: 

Using the 2019 General Elections data, analysts of IIFL Capital Services have tried to analyse the impact of I.N.D.I.A coming together with 100% vote transferability (a low probability scenario in our view, considering past elections eg: SP-BSP alliance) to evaluate probable outcomes. Out of 543 Lok Sabha seats, they see an incremental loss of only 17 seats for the NDA, which means the NDA would still have >300 seats (assuming same vote share as in 2019). Just by the virtue of coming together, the I.N.D.I.A may not be able to de-throne the NDA government, given BJP’s strong hit ratio in the seats contested.

Analysing scenario of vote share swing in favour of I.N.D.I.A: 

Analysts of IIFL Capital Services tried to gauge the sensitivity of the NDA majority by assuming that I.N.D.I.A is able to swing in vote share, in addition to the perfect vote transfer assumption. Over the past 17 Lok Sabha elections, the median vote swing in favour of the incumbent government has been ~2ppt (over seven such instances). Analysts of IIFL Capital Services have not taken elections, which resulted in regime changes, as most media surveys do not anticipate any meaningful anti-incumbency building up this time. Further, even in the case of 2019 when vote swing was 6.4ppt, only 50% of seats had a vote share swing of >5ppt. So a 2ppt swing in favour of the I.N.D.I.A looks like the best case scenario for them, and in such a case NDA loses another 28 seats (in addition to losses due to vote transfer) but is comfortably above the majority mark. 

Opinion polls and surveys also giving majority to NDA: 

The latest C-Voter & India TV-CNX polls predict NDA to win 306 & 318 Lok Sabha seats respectively, with BJP likely to retain its 2019 vote share of ~37%. Despite the C-Voter survey showing that economic condition of the people is weaker vs last elections, the popularity of the BJP government and Prime Minster remains higher than that of opposition/leaders. Further, the opposition unity has already faced a setback after defection of some NCP leaders to NDA coalition in Maharashtra. As per reports, after the passage of ‘The Delhi Ordinance Bill’, the Aam Aadmi Party (AAP) is now unsure of joining the alliance.

State elections not a cakewalk for BJP; leadership-issues galore: The India National Congress (INC) won the 2023 Karnataka assembly elections comprehensively, bagging 135 seats in the 224 seat strong assembly. While Karnataka has historically seen ‘revolving door’ theory (no incumbent got re-elected in the last four decades), the win gave a morale boost to the INC cadre. In the next three months, five states are going to polls before the 2024 Lok Sabha elections – Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram. The results of 2018 state elections (of above states) were not encouraging for the BJP; however, six months later, they drove a sweep in the 2019 general elections. Analysts of IIFL Capital Services believe BJP might have a mixed bag in terms of the outcome of these elections, with Chhattisgarh expected to be retained by INC, while Rajasthan could see a change with BJP taking over from INC. As such, they do not see the verdict having any bearing on 2024 the General Elections. This is because the electorate tends to vote differently when it comes to the Centre & state elections — as previously highlighted. Further, in Maharashtra, BJP has joined hands with factions from both Shiv Sena and NCP (the two key regional parties in the state), probably due to inability of it being able to win independently.