Politics of Divisiveness Falls Flat: Markets Reel from Voters’ Harsh Verdict
Last week, I wrote, “Traders largely believe the National Democratic Alliance (NDA) is poised for a third term; but market veterans may not be so sanguine” because they had witnessed electoral surprises that caused a sharp crash in 2004 and a euphoric rally in 2009.
The NDA may still come to power for a third term, but before it does, the market had taught a hard lesson to traders about the ill effects of speculation based on exit polls and implicit faith in reports churned out by a pliant and pro-government media.
After two hours of counting on Tuesday morning, it was clear that there was no sweeping victory for the NDA, despite its high decibel poll campaign, flush with funds from ‘electoral bonds'. Instead, it is a huge moral victory for the opposition alliance, INDIA, who fought these elections with frozen bank accounts, broken parties and innumerable leaders facing multiple investigations and threat of jail time by government enforcement agencies.
On 4th June, the benchmark Nifty50 crashed nearly 7% in the first two hours of trading, rallying slightly to close the day almost 6% lower at 21,884.50. The Sensex also plummeted nearly 4,390 points to 72,079. The impact was most keenly felt by the two politically sensitive business groups – Adani and Ambani. Even before 4th June, the Adani-Ambani group stocks saw the worst fluctuation as nervous, first-time traders grappled to deal with the rapid change in political fortunes caused by wrong exit polls and the actual results.
The sense of shock on Tuesday, when early trends began to trickle in, was even greater, because both, Narendra Modi and Amit Shah, had exuded supreme confidence and even exhorted people to buy stocks, in anticipation of an NDA victory.
The misplaced euphoria led to a 3% jump in the NIFTY on 3rd June with many Adani group shares up by 10%-15%, followed by the sharp fall the next day. It has led to allegations of manipulating market sentiment for short-term gains and valid questions about whether the market regulator would dare to question politicians for talking the market up. In the past, high-profile politicians have always got away with public utterances about policy decisions leading to sharp fluctuation in the price of specific sectors or stocks.
Over the next few days, market volatility is bound to continue as investors book profits and traders react sharply to developments as a weaker government tries to build a coalition.
India Shining vs Viksit Bharat
Public memory may be short, but political memory is apparently worse. How else would the Bharatiya Janata Party (BJP) have forgotten 2004, when the high-profile ‘India Shining’ campaign led to a shock defeat as the touted benefits of a booming economy had failed to reach the real electorate that votes. It was the same with viksit Bharat (developed India) this time. The boast of making India a US$5trn (trillion) economy appealed to the richest 20% of the population whose wealth has soared in the past five years, while the average India is suffering from low wages and high inflation.
The BJP appears to have been deluded by the echo chamber it had created in a pliant media (thanks to massive government advertising) and digital armies which trolled and harassed critics, while putting out highly exaggerated accounts of shiny development projects.
The trolls scoffed at income disparity, rising prices (including taxes, cess and tolls) and the fact that 800mn (million) out of 1.4bn (billion) Indians needed 5kg of free foodgrain doled out by the government every month for their survival. The devastating impact of demonetisation, the trauma of a poorly-handled COVID pandemic, widespread loss of livelihood, closure of medical facilities and ineffective public insurance schemes were all air-brushed by mainstream media. Those raising uncomfortable issues were harassed, slandered, labelled as anti-national and silenced. Many BJP leaders openly instigated trolling of critics, ultimately blinding the Party to ground reality.
As Debashis Basu wrote this week, “The living conditions of the average population encompassing education, health, public transport, pollution, and justice system have not improved. In fact, these indicators have deteriorated”… and the impact of these “can’t be wished away or substituted by narrow indicators like the stock market boom, growth in corporate profits and mutual fund inflows, as measures of real prosperity.”
Too many Indians in the top-20% income bracket, who have flocked to the stock market, are completely disconnected from rural reality. The first inkling about public anger about unemployment and rural distress actually emerged when election coverage compelled mainstream media to send reporters to cover various constituencies. Even here, it is smaller digital publications, with skeletal resources, which projected the true picture – that Sab ka Saath, Sabka Vikas was fake.
The fact is that even the Vikas Purush image of the prime minister turned out to be hollow. In his first term, there were hardly any development projects even as economic growth was anaemic. It is only from 2022 that the government started spending large amounts for infrastructure development; last year’s capital expenditure in the Budget was Rs11 lakh crore. But the main beneficiaries were a bunch of companies and stock market investors. It was too late to generate new jobs or for the prosperity to trickle down. The BJP also seems to have realised that boasting about viksit Bharat, bullet trains or expressways was not going to impress distressed farmer or the unemployed youth. It perhaps explains why the prime minister, as the star campaigner, focused on fear-mongering (Muslims and mangalsutra) rather than core issues of the masses.
Voters’ Message
The biggest message from these elections is that the ordinary voter is not a fool and was totally unimpressed by the ugly, divisive poll campaign unleashed by BJP. Corporate India and stock market investors, who were blindsided by focusing entirely on profits, prices and the wealth generated by a handful of listed companies and a few start-ups, were also clueless about public sentiment. Business leaders and industrialists whom we spoke to were supremely confident that the BJP would bag 300-330 seats and move to a third term without any hiccup. Voting patterns in Mumbai suggest that most of them were away on vacation on voting day.
On the other hand, voters who matter had their feet on the ground. Apart from economic distress, they were clearly appalled by the brazen whitewashing of corrupt politicians, the break-up of political parties with threat and inducements, support to politicians accused of sexual harassment, the politics of polarisation and hate and absence of meaningful change in the quality of life, even for middle class Indians over the past 10 years. What is worse, although prime minister Modi had promised to wipe out corruption, it has only increased at all levels.
The flip side of using investigation and enforcement agencies to target critics and political rivals is that these agencies are given a free rein to go after others as well. Thousands of people have ended up making unwarranted payments (for tax notices going back 10-15 years, wrongly deducted tolls and fines), because the fight for redress or correction would be more expensive and time-consuming than paying up.
The Indian electorate has sent a powerful message, rejecting the superficial gloss of development narratives that fail to address their real concerns. As the nation moves forward, it will be crucial for political leaders as well as market participants to engage more deeply with the grassroots realities, ensuring that growth and prosperity are genuinely reflective of the broader population's well-being. The results are also a lesson that true progress is not measured by stock indices, but has to be reflected in a tangible improvement in the lives of ordinary citizens. After all, that is the path to viksit Bharat.
1 month ago
Even after reading this thought provoking and factual article the Indian intellectuals do not react, it will be intellectual failure. And after knowing today's Government porfolio disbursal, it is quite clear that it is only Modi Government and not NDA Government as full continuity is kept in all key Government departments. Now is the test of intellectual integrity of India. Let us see what is the churning .
1 month ago
Madam, I am not a economist or political analyst. When I visit my village regularly (90kms from Bangalore city). My own uncle's house got LPG connection for the first time only after NDA. My brother's wife was given 1.5 lakh from central government for building a house (house should be in the name of woman). Even though Nal se Jal connection is there Drinking water is irregular (due to draught). The nearest state highway was elevated to national Highway and 6 lane highway construction is going on. These are the things I saw in my Village, no speculation or arm chair tweeter army.
Also from 2004 to 2014 there were hell lot of terrorist attack happening on India (including 26/11). Mumbai and Delhi took majority attacks. How come those one attack a month kind of situation ended? NDA gave free hand to security agencies and they are doing their job? Why UPA failed miserably in handling security things? Terrorists even reached IISc and Killed a scientist.
What divisive politics NDA has done? As a common citizen I am free to criticize anything, as a dalit I seriously Criticize static and Hierarchical Jaati system. Just a question about one book and one community immediately results in sloganeering of beheading and slaughter . . . what kind of a mentality is this, what kind of perversion is this? If baba Saheb was still around today, without any doubt he would have been targeted with fatwa for his free speech.
NDA has issues but much better that UPA (or INDIA alliance).
Meenal Mamdani
1 month ago
The general tenor of replies indicates relief at the election results vindicating the article and its author.

The Indian voter is more thoughtful and informed even if a vast majority are poorly educated. They have proved their sagacity once again, after delivering a shocking result to Indira Gandhi after the Emergency.

Two things continue to dominate India's elections. Dynasty and Caste. Both indicate deep attachment to family. All parties, with the exception of the Communists exhibit this trait.

I don't see this changing in the near future. One can only hope that even then, the voters will think of the country ahead of their caste affiliation.
Pragna Mankodi
1 month ago
The Indian voters have come of age. They were not fools even during the time of Congress rule but since the electronic age was yet to dawn upon, they had manual tools to manipulate the voters. Now EVMs have taken away those opportunities. Yes, the voters have exercised a check on the unfettered power of the NDA by giving them a thin margin - not as thin as was given to the Vajpayee govt - clearly indicating the ruling dispensation to tighten their belts. However, the mandate is clearly not to any other party or their selfish collective motives. It\'s an irony that the 100+ old party which forced upon its rule on the people of this country and treated the constitution as it\'s own asset to impose its dynastic rule, is celebrating its perceived moral victory in being successful in securing less than 100 seats! Does the country need any comedy more than what\'s played out in the political theatre of the country?

Yes, democracy is for the people, of the people and by the people. In any democracy, the wiser people choose the lesser evil and people are aware that in the current scenario the BJP and Modi are lesser evil than any other choice available to them. So the verdict has to be accepted and appreciated. Voters are always right.

Isn\'t it ironic that the article says that the stock market is not the only criteria to judge the economic progress of the country but it starts with the story of the market high on Monday and an unprecedented crash on the day of the counting! For the record, the market has not only recovered from the losses, it has reached record high by the end of the week after the dust settled and a clear sign of a stable govt formation by NDA was seen on the horizon. Any lessons for the INDIA? Well, time for introspection for them in their single agenda for removing one man from the scene. Good luck to both the teams in this competitive politics where at times journalists also willy nilly become part of the chorus on either side of the political spectrum.
1 month ago
Good morning Madam, just wanted to update that I had posted this article on my Facebook profile and Facebook deleted it alleging "Spam / garnering Likes by repeating same message" as per their policy ! Which I find totally ridiculous and strongly suspect some Andh Bhakts might have complained to Facebook. Despite the plethora of intelligent YouTubers who have busted the Modi myths and lies, it is amazing how many of their tribe continue to remain loyal supporters.
1 month ago
We should not deem that all voters who has not voted as "NOTA voters". If there is any way wherein we can consider the wish of those voters who have not voted (1. Not bothered whosoever win 2. Taken modi win for granted without voting) which is very significant number TOOOOOOOOOOO SIGNNIFICANT which is more than 40%. and gamer changer for sure.
Then Results will be more shocking.
If we are concluding that the results are true reflection of wish of we all Indians, then we are very much immature for the conclusion of not considering the wish of immature voters who doesn't bother to vote.
1 month ago
I am concerned for India's future after the election results revealed that the urban regions and the middle class has largely sided with the autocrat dictator. They are ready to give up our freedom earned with a struggle of more than 100 years and huge sacrifice, in return of next-to-nothing.
1 month ago
Respected Madam Sucheta Dalal, there is No Dearth of Paid Trollers and it would be Better to Ignore their Vested Interest Online Comments. Babubhai Vaghela. Thanks.
1 month ago
It is tragic how Andh Bhakti makes some people take offence on reading the truth....considering how mainstream media has been bought over by crony capitalists of the present Government and they are so conditioned to the "all is well" spiel that when the naked truth stares them in the face, they are at a loss and react in a defensive manner and start calling the truth biased when actually the prejudice of hate peddled for more than 10 years has become second nature to such people.
Mani Sriram
Replied to shaidermota comment 1 month ago
can you define what is truth and is there anything called absolute truth?
2 months ago
"ugly, divisive poll campaign unleashed by BJP" ?

Somone forgot AAP and Congress and....an canketerous lady in Bengal badmouthing literally everyone and causing violence...and nearly every anti-incumbent has bad-mouthed Modi..and...yet...somehow it's BJP's fault...umm...OK!

"Harsh verdict"? The incumbent won and emerged single largest party. The nearest competitor couldn't even breach three digits. I don't understand why journalists are calling it a "disaster". Sure, it didn't meet expectations (and exit polls were wide off, with not a single one anywhere close to the final outcome...just as nobody predicted that a blind monkey (a.k.a. S&P Index) beat Berkshire Hathaway in the last 10 years), and there were a few shockers.

But so what? Even the greatest golfer in the world will have a bad outing from time to time and learn from it (as opposed to throwing tantrums and refusing to take accountability).

BJP supporters are so mournful while anti-incumbents are sipping champagne despite the opposition combined seat and voter share is less than the incumbent party. Hilarious!

Democracy is alive and well. I hope this puts the EVM conspiracy nonsense to the dustbin.

In my opinion, this is a good result in the sense that BJP will not take anyone for granted now especially with coalition politics playing out. It means a lot of things will be calculated meticulously with feedback loops.

I agree that the honest, hardworking ordinary people needs to be heard which is true viksit Bharat.

Let's see what happens.
Replied to adityag comment 1 month ago
I am sure lawyers will take the EVM issue to its conclusion this time. This time is different. Autocrat has made people eager for democracy. We will ensure India does not get so close to autocracy again.
Replied to adityag comment 1 month ago
You are entitled to your opinion Sir. We took the hard route in journalism -- so that means anytime our view is contrary to YOURS you assume it is biased. So be it. As for Ms Irani, as a citizen and someone with women in your family -- assuming you are a biological person -- you ought to be equally outraged at Ms Irani's silence over -- Manipur, Hatras, Women Wrestlers, Revenna etc. I am sure this fact and the hysterical outbursts at other women (including parliament colleagues) did not escape your attention. I will not engage on other issues, since you clearly do not want to read or listen to facts in perspective. A small video of Yogendra Yadav online explains it well -- i mention this since you have brought my twitter comments into play here.
Replied to sucheta comment 1 month ago
I have absolutely no idea what you are alluding or even the twitter comments that you refer to in your comment (you have perhaps mistaken me for someone else).

I merely quoted your article here. That being said, I agree with the broad contours of your article. Actually, my opinion isn't very different from yours actually, if you read my comment carefully, especially the last part. It's between the lines, so to speak.

Replied to adityag comment 1 month ago
The comment was wrongly placed, it was for the one above you. As for the rest, we can take it offline since you are a former colleague.
2 months ago
Mr. N Modi heaped full credit on himself alone (Modi ki Guarantee, Divine messenger). Now he should take the full blame for the miserable show of the BJP. They are in such a dire situation that they cannot form the Govt. without the crutches (Nitish & Chandrababu). It is not only a political, but also a moral defeat and Mr. Modi should graceful vacate the PM's chair. If not, how will he eat all the words he spewed out during the election campaign?
Replied to angelo.extross comment 2 months ago
A party with 145 seats and with no leader prompted before election can assume the Govt in 2004/2009 and BJP with 240 seats on its own deserve forming the Govt. All comparisons are made by anti-modi noises vis-a-vis BJP itself, since there is no historical standards left with Congress.
Meenal Mamdani
2 months ago
What is urgently needed is a thorough overhaul of the legal system.

The idiocy of banning films because someone's sentiments are hurt, the nonsense of hauling someone to court because of comments that the person made, the practice of keeping people in jail for years on end on trumped up charges while the govt tries to find non-existing evidence. The list is endless.

Indians have been lucky to get a chance to correct this "tamasha" of ridiculous laws. Imagine if Modi-Shah had won the elections!!
2 months ago
Hats Off to the Silent Voters of India Majority being from Rural India that has been Neglected for Development by the Govt Functionaries.
2 months ago
A plea for political action to be grounded in reality
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