What Low Voter Turnout Could Mean for India

Lower than expected voter turnout in India has led to a shift in Modi's campaign strategy. Rather than stand on his decade of economic success, Modi has recently turned to increasingly polarizing rhetoric and even accused two of India's wealthiest industrialists - and donors to his Hindu nationalist Bharatiya Janata Party (BJP) - of giving election funds to the opposition Congress party.  Voting is progressing in phases with the results to be declared on June 4. The BJP has designs to win a supermajority this election, or 400 of the 543 seats in India's lower house of parliament. However, some observers now question whether this is achievable, and whether voter fatigue is a sign that “Modinomics” is on ballot. 

India's strong GDP growth rate in recent years has been underpinned by unprecedented infrastructure spending. In each of the past three years, the government has spent $100bn building ports, bridges, highways and other critical infrastructure. Modi has pledged to make India a modern country by 2047, and multinational corporations have responded by building factories and technology development centers. 

However, if Modi's BJP wins without a strong mandate, his critics may be emboldened to resist such rapid development. The opposition party has pointed to India's high unemployment rate and a wealth divide that persists despite the $400bn Modi has spent in the last decade on welfare handouts to woo lower-income voters. Critics also complain that too many rupee have gone into mega-projects and platforms targeting India's tech-savvy middle class, which has squeezed out funding for the smaller businesses that are the backbone of the economy. 

Smart investors are reviewing their portfolios and preparing for any eventuality, including a market correction if Modi's performance in 2024 is weaker than his results in 2014 and 2019. India's political and business landscape may change if the country's national champion conglomerates are increasingly caught in a tug-of-war between the parties.  Congress party opposition leader Rahul Gandhi responded to one of Modi's attacks by suggesting that the two billionaire industrialists Modi had named had made illegal contributions to the BJP saying, "For the first time you have spoken in public about Adani and Ambani. Is it your personal experience that you know they give money in trucks?" Come June 4, we will have a much clearer indication of India's political temperature for the next five years.