As a prelude to this post, let us re-define the transactional relationship that exists between political parties/governments and voters in commercial parlance. Any political entity that is subsequently voted to form a government must be perceived as selling a service or a product with certain definitive features and set of guarantees, or perceived as service providers to their customers/electorate. When consumers opt for a product or service, it comes with certain legal guarantees. Extending this principle of commerce to perceiving the voter as being the consumer, a repeat purchase only happens if the customer/voter expectations have been fulfilled.
Going by the above analogy, would most voters ‘buy into’ or be potential ‘repeat customers’ of Brand Modi? My personal answer is in the affirmative, as most of Brand Modi’s past guarantees have been more than honoured over a decade of his tenure.
Modi today has etched a deep ‘bond’ with his repeat voter
In my article on Firstpost, two days back, I wrote that “Modi’s emotive connect with the voter remains intact.” I stand corrected. Because, in hindsight, the prime minister doesn’t just have a ‘connect’ with his repeat consumer/voter base, but has established a deep and emotive ‘bond’, a bond that inspires trust in his brand, which he has built based on delivery with his domestic voter base, as equally with the goodwill with the Indian diaspora globally.
Transference of personal trust augments Brand India
Today, that transference of Modi’s personal trust has augmented Brand India, which is synonymous with predictable policies, rationalised taxation, consistent reforms and a liberal democracy. India offers political stability ‘which is a prized currency amongst democracies’, especially in the current global scenario, where the choices for future investment destinations are limited to authoritarian regimes, theocratic states, or communist superpowers.
The incumbent prime minister’s guarantees are schemes that he has already delivered in national size and scale, within a defined timeframe and not some futuristic promise. Modi’s ‘guarantees’ are today perceived by his ‘repeat voters’ as also his foreign investors as a sovereign guarantee, promises made by the head of state that he never reneged or defaulted on.
With state elections behind us, it is time to look beyond, as the positive ramifications of the recent wins will be felt on a greater magnitude on sentiments of the BJP’s cadre, on Modi’s committed voter base, on the multiplier effect Modi’s deliverables will have on his own political and personal capital, and ultimately on Brand India.
A ‘lame duck phase’
Typically, four to six months prior to the run-up to national elections in any democracy, the ruling government enters a ‘lame duck phase’, even before the Model Code of Conduct kicks in. It is a phase of uncertainty, when bureaucrats, policymakers in the government, decision-makers in the corporate world, or foreign investors and MNCs are in a state of suspended abeyance, in a wait-and-watch mode. Even foreign powers and heads of state subtly and adeptly defer bilateral dialogues, so as not to be on the wrong side of the next government.
Worse still, the mere prognosis of a weak rag-a-tag coalition augurs further interim business instability. It normally brings the last four months of governance and business to a standstill due to temporary policy paralysis.
Biggest indicator of electoral trends
Even India Inc goes into an internal quandary before elections as to how much funding to apportion to political parties, in proportion to their perception of the chances of victory. Any doubts here as to which party the political funding for the 2024 elections will flow towards?
Just today’s newspapers stated that the BJP has cornered the lion’s share of the donation from the public, a report by the Election Commission of India has shown. The saffron party’s funding surged to Rs 719 crore in the fiscal year 2022-23, marking a 17.1 per cent rise from FY 2021-22, when the party had received Rs 614 crore. In contrast, donation to the Congress has dwindled to Rs 79 crore in FY 2022-23 from Rs 95.4 crore in the 2021-22 financial year.
The second indicator of the electoral trend
If Monday’s historic stock market rise to an all-time high indicated something, it was that the convincing margin of victory in the three Hindi heartland states reverberated beyond politics to economic confidence. State elections are normally of little significance as they are localised, transient events which have never impacted the market sentiments. But this triad of victory signalled future political stability for 2024 onwards, backed as it was by higher Q2 GDP growth and higher Foreign Institutional Investors (FII) inflows.
India post-Covid has retained the tag of being a “favoured investment destination” for global investors amidst a world of geopolitical and financial flux. However, we still have miles to go in order to achieve the status of being “the most favoured investment destination/the China +1 destination of choice” by MNCs. That leaves policymakers no place for complacency in a fiercely competitive global marketplace, as foreign investors only opt for investment destinations with vibrant demographics and political stability.
The resilience of the Indian economy and future projections by multilateral banks of GDP growth, averaging 7 per cent, places India as the fastest-growing economy for the next three years, considering global growth for the year has averaged 2.9 per cent. Encouragingly, during 2023, data shows that China’s economic performance was below par, while the European economies struggled with high inflation. In comparison, India has been witnessing a revolution of sorts, as MNCs are setting up global capability centres (GCSs), while expanding existing capacities.
Index of political stability in India higher than in the UK
Political stability is the key to increased economic activity in any country. For the first time, India rates higher on political stability in comparison to even mature democracies like the UK or France, both of which are struggling with socio-political and economic instability, with the UK being struck with stagnant growth for a decade.
Expectations ripe for Budget 2024
What the increasingly near-predictability of the 2024 electoral outcome signifies is that with the odds tilted in favour of a successive win for the BJP, the Modi government will likely take bolder decisions, even at the fag end of the BJP-led NDA’s tenure. One anticipates that even the forthcoming vote-on-account/interim budget would continue with higher outlays, proposed for infrastructure and social sector schemes, which of course would be passed only after the general elections.
The author is an ex-Chairperson for the Committee for Financial Inclusion, NITI Aayog. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect News18’s views.
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