Title: 2019 Indian Elections: Despite Economic Missteps, Modi’s Reelection Prospects Remain Strong

Modi’s 2014 Election Victory

Prime Minister Modi swept into office in May 2014 after securing a decisive victory over the incumbent Congress Party and its coalition partners. The newly elected leader captured the largest parliamentary majority India had seen in 30 years, ending Congress’ decade-long rule. Led by the political dynasty of India’s first Prime Minister, Jawaharlal Nehru, Congress’ tenure had become characterized by policy paralysis, stalled economic growth, and a series of multibillion dollar corruption scandals. The BJP’s resounding 2014 win over Congress transformed Modi into the country’s most dominant political force. He promised to use his historic mandate to pursue an ambitious agenda focused on widespread change.

Until recently, Modi’s reelection to another five-year term appeared all but inevitable. Following his landslide victory on the national stage in 2014, the BJP embarked on a methodical campaign to extend its political hegemony across India at the state level. It engineered a string of successes nationwide, assuming power in states throughout the country in which it had historically underperformed. On the eve of national elections in 2014, the BJP controlled only five of India’s 29 states. Less than five years later, the ruling party and its allies controlled all but three.

Consequent Economic Miscalculations Undermine Certainty of Modi’s Re-election

While Modi’s electoral juggernaut appeared unstoppable for more than four years, the BJP’s election fortunes suffered an abrupt reversal this past December. The Congress Party earned three unexpected victories in state elections in Rajasthan, Chhattisgarh, and Madhya Pradesh, India’s so-called “Hindi Heartland.” The three states together account for 14 percent of India’s population and more than 12 percent of India’s parliamentary seats. Election results in this region are viewed as a bellwether for upcoming national elections. For the first time since taking office, the aura of electoral invincibility that appeared to surround Prime Minister Modi had finally been pierced. Several factors ostensibly undermine his 2019 election prospects:

The first is his purported mishandling of the Indian economy. Modi’s commanding 2014 performance was built largely upon a promise to strengthen the economy, jumpstart growth, and, most importantly, create new jobs for the one million Indians entering the workforce every month.

Unfortunately, this rhetoric has outpaced reality and the Prime Minister has been unable to meet the sky-high expectations he set for himself. According to an official government report, unemployment soared to a 45-year high in 2017 under his government’s watch. Underscoring the profound political problem this sobering figure poses to Modi’s reelection prospects, New Delhi has refused to release the report to date.

Beyond unemployment, some of Modi’s signature policy decisions have also tarnished his credentials as a responsible steward of the economy. In November 2016, the Indian leader shocked the nation and much of the world by invalidating more than 85 percent of the country’s cash supply during a dramatic nighttime address. Demonetization was aimed at combating corruption, eradicating “black” or undeclared money, and targeting India’s notoriously pervasive tax evasion problem. The move created immeasurable disruption and wreaked havoc across India. Scenes of empty cash machines, pandemonium at banks, and general hardship became commonplace throughout the country. India’s poorest citizens were the ones hardest hit.

Although the decision enjoyed broad political support across the country, it is now clear that demonetization failed to achieve any of its stated objectives. A year after the initial campaign, India’s central bank acknowledged that more than 99 percent of the targeted “black money” had been laundered back into circulation. A consensus has also emerged that demonetization impaired India’s economic growth, at least in the short term. Figures released in the aftermath of demonetization revealed that India’s first-quarter growth had fallen to 5.7 percent, nearly a full percentage point lower than the 6.6 percent government officials had predicted initially. During the same period last year, GDP growth stood at a robust 7.9 percent.

In similar vein, New Delhi bungled the rollout of its Goods and Services Tax (GST) scheme, the biggest attempted overhaul of India’s byzantine tax system in decades and a signature Modi initiative. As with demonetization, Indian officials failed to sufficiently tether implementation to underlying policy objectives, serving only to drag down the economy further.

Modi’s fiercest critics have alleged that dangerous, right-wing Hindu nationalism has experienced a resurgence under Modi and that the Prime Minister has purposely stoked communal tensions to deflect attention from his electoral and economic woes. Recent years have witnessed a sharp rise in the number of vicious attacks against India’s minorities, particularly its Muslim communities. Modi’s response to this horrific violence has oftentimes been deafening silence, raising questions of whether he condones the violence, is trying to consolidate his base ahead of the elections, or both.

Modi’s Popularity Resurgent After Kashmir Attack

Although the constellation of challenges confronting Modi is formidable, the Indian leader still remains the favorite to win reelection. In addition to the immense advantages that accompany incumbency and the BJP’s superior on-the-ground organization, the reality is that Congress and its allies have been able neither to capitalize on the BJP’s myriad shortcomings, nor put forward an alternative vision of governance of their own. Congress has made the case against Modi but has failed to make a case in favor of itself. Led by Rahul Gandhi, the great-grandson of Prime Minister Nehru, Congress still appears to lack a coherent strategy capable of effectively challenging Modi.

Congress’ prospects appeared to grow even dimmer last month after a young suicide bomber in Kashmir killed 40 Indian soldiers in the worst attack against the country’s armed forces in Kashmir in 30 years. A Pakistan-based terrorist organization, Jaish-e-Mohammed, claimed responsibility for the gruesome attack. India responded swiftly, bombing a terrorist camp in Pakistan proper, the first time Indian forces had attacked the world’s worst state sponsor of terrorism beyond the Line of Control since 1971. While it is unclear whether India actually hit anything beyond an empty field in Pakistan, an Indian pilot was captured (and subsequently released) by Pakistan, raising tensions between the two nuclear rivals. The entire crisis has provided a boost to the Prime Minister, allowing Modi to project himself as a strong, resolute leader, safeguarding the country against all aggressors. With the focus of election having shifted successfully from the economy to national security, Modi appears to have regained any lost momentum at least in the short term. The recovery may fade by election day.

Yet, while the political winds currently look favorable for Modi, it would be imprudent to conclude that his reelection is a certainty. No BJP government has ever served two consecutive terms in office in India’s history. Should Modi return to power, it will likely be with a reduced a majority in Parliament. The only well-established rule in Indian politics is that uncertainty reigns supreme.

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Ronak D. Desai is a scholar at the Lakshmi Mittal South Asia Institute at Harvard University and a Law & Security Fellow at New America. He also serves as India Practice Vice Chair at a prominent international law firm based in Washington DC. He routinely advises Members of Congress on legal and policy issues pertaining to South Asia. He can be reached at Ronak.Desai@post.harvard.edu.