ELECTIONS 2024: Man Doth Not Live by Bread Alone

DOES ECONOMIC PERFORMANCE largely determine electoral outcomes? Many economists would answer in the affirmative. Yes, it is the economy, Stupid, they would echo Bill Clinton.

- HARDAYAL SINGH

Not necessarily so in the case of India. The first quarter of the current financial year (QI FY2025) more or less coincided with the recently concluded general elections in our country. Three months on, when we have the performance results of our economy for this quarter, it is possible to reassess this causal relationship. In the Indian context, the answer is a firm no, but first, the results of the country’s economic performance.

The Indian economy reported a disappointing growth rate of 6.7 per cent during Q1 FY 2025. This was possibly due to subdued government spending during the relevant period. Barring this jarring note, the economy actually performed quite well. India remained the fastest growing major economy in the world, with China, one of the other countries with which India is often compared, clocking 4.1 per cent. After a long time, private consumption showed some cause for optimism; it grew at 7.4 per cent. Despite supply chain challenges, foreign direct investment (FDI) was 17.2 per cent higher than last year.

NOT AN ECONOMY IN STRESS