The mandate’s economic message: After welfare, time for jobs

Indian voters appreciate the improvement of India’s welfare delivery architecture under the Narendra Modi-led government. They clearly like the provision of basic necessities enabled by the government. And they laud the infrastructure initiatives that have enabled rapid movement and commerce. But they are not happy with the lack of formal jobs. They aren’t happy with their inconsistent and low-income levels. They are upset with high prices. They aren’t pleased with the K-shaped post-pandemic recovery that has left millions behind the development curve, even as a slice of the population has paced ahead. And they, quite desperately, need the government to address some of these admittedly complex challenges.

That is the bottom-up mandate that voters in the 2024 election appear to have thrown up, based on the political-economic backdrop and messaging that accompanied this election.

The BJP fought the elections on the twin plank of having pushed a modern economic agenda and the improvement of state capacity to publicly provide private goods to citizens to ease their living.

The first plank involved a major push for infrastructure expansion (with remarkable success); the arduous effort to woo capital to enhance manufacturing through a major new industrial policy push and reduction in corporate taxes (with mixed results); the use of the digital public infrastructure to encourage private entrepreneurship; steps to ease credit and deepen financial markets; leveraging India’s strength in services and the size of market to deepen its integration with the global economy; a spate of new trade pacts with partners with an eye on both exports and national security considerations; and careful macroeconomic management in troubled times.

The second, more widely discussed, plank has involved cash transfers to farmers, the construction of rural homes and toilets, the provision of electricity and water, the distribution of gas cylinders, the construction of a health insurance scheme, and most critically, the provision of free ration after the pandemic to over 800 million people.

For the Opposition, this story was either partial or fabricated. Their critique of the Modi government was based on alleging that the government presided over a crony capitalist regime that favoured a few business houses over the rest of the economy, including by provision of public finances and public contracts. The Congress promised massive cash transfers to women, an apprenticeship program for graduates and diploma transfers and cash transfers to them, recruitment to government jobs, enhanced minimum support prices to farmers, and loans for startups led by the young, among other steps.

Anecdotal reporting from the ground through the campaign suggested a mixed economic mood. There is distress. And no fact reflects distress more than the fact that the government has had to provide rations to hundreds of millions of people over the past three years and has promised to continue to do so. There is a yearning for jobs, which is substantially why the anxieties over reservation are so deep for it is seen as one of the few routes available for upward mobility and formal employment. There is anger over prices, even if India has managed inflation comparatively better than most other global economies.

There is the unplanned transition from agriculture to manufacturing/construction/real estate labour and from rural to urban, with its attendant social dislocation. There is greater aspiration — a much-abused word, but relevant in this case — due to both technology and more needs, without the income to meet those aspirations. And there is a much bigger pool of the educated and semi-educated, but unemployed, and unfortunately, often unemployable in the sectors and nature of work this workforce seeks.

The mandate is mixed. It allows the BJP as a single-largest party to continue its welfare architecture and rewards the party for this improvement. Voters continue to expect both more basic necessities and increasingly more cash transfers. The BJP will wonder if it should have been more generous in the vote on account this February rather than complacently assume that the election was locked in; after all, the cash transfer to farmers, announced in February 2019, helped the party in the elections.

But, at the same time, the reduced mandate is quite clearly a product of economic anxieties. Voters have given a warning to the BJP and appear to be saying that they are willing to give one more chance to the party to meet its economic promises. This includes a demand for more government jobs, a demand for more manufacturing jobs, a demand for higher agricultural incomes, a demand for easier mobility within the country and outside, a demand for education that is linked directly to the market, and a demand for inclusive growth that overcomes the K-shaped nature of the growth so that benefits are distributed more widely.

But by giving an enhanced number of seats to the Congress, voters are also placing in Parliament a stronger Opposition with the mandate to keep a vigilant eye on the government to ensure that it remains committed to economic welfare for all, in quick time. An impatient and young India awaits.