The Indian Economy and the Indian Elections
After tensions arose on the Kashmir border, forthcoming Indian elections will not be fought as India’s first-ever ‘National Security elections’, rathe than on the traditional ground of economic issues.
For the ruling
The economic issues at stake revolve around matters of unemployment, agrarian distress and a declining GDP. Over the past four years, India’s unemployment rate has steadily crept up. It was 3.41 per cent in 2014 when Prime Minister Modi took office and the most recent reports for 2016-17 show it at 3.52 per cent. Estimates suggest that India needs to create 13.5 million jobs to be on power with other countries with similar per capita income. A recent report from the Centre for Monitoring the Indian Economy said that 11 million jobs were lost in 2018. This is concerning particularly for a young population like India where the average age of the country will be 29 by the year 2020 and 64 per cent of its population are working age. With more than a billion people living in India, it is essential for the economy and social infrastructure to not have high levels of unemployment.
Secondly, with reference to the agrarian crisis, the past year saw numerous farmer protests around the country. For India, whose economy is still largely agrarian-based, this is a signal that all is not well in the agricultural sector. The country’s agricultural output grew at 2.8% this quarter, less than 5.3% in the June quarter. Further, Farmers around the country are complaining of rising prices and diminishing profits which are pushing more farmers towards debt. The situation persists and in 2016, it was estimated that fourteen farmers commit suicide.
Finally, while India maintained a healthy Gross Domestic Product (GDP) of 6.6 per cent this quarter, it is still less than expected and marks the lowest GDP result in the past fifteen months. Further, the opposition will surely push the government on other issues such as the hastily announced demonetization effort, the poorly implemented roll out of the Goods and Services taxand the potential charges of corruption associated with the Rafele Deal.
The recent tensions over Kashmir have brought national security into the spotlight for an Indian election, perhaps for the first time. Political Scientist Ashutosh Varshney suggests that this is due to the proliferation of social media and news media, coupled with the increase in cell phone use and connectivity which has brought the news of these tensions into the hands of Indians around the country. Rather than national security being an elite concern, Varshney argues that it is a concern for all Indians.
In an extremely fluid electoral landscape, these issues may become more or less important, comparatively. However, with the elections being only a few months away, these are the issues which will define the election.
Image Credit: CC by Indian Elections/ Flickr