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Real Direct Benefit – The Silent Wave of Modi Schemes in 2024 Elections

The single largest key to retaining power in India has always been increasing direct benefits for people, adjusted for inflation—what I call "Real Direct Benefit."

“This is a no-wave election” has become the common saying of the opposition as the 2024 elections have progressed. They often reference 2019, highlighting the nationalism wave following the Central Government’s Balakot Strike in response to the Pulwama attack. This time, they assert, there is no such wave.

Some political analysts have even stated that, in the absence of a central government-driven wave, the opposition’s narratives—such as “BJP will change the constitution,” “PM Modi is a dictator,” and “This is an election to save democracy”—have gained traction. They argue that this shift in narrative has resonated with the public and “hawa change kar gayi hai.” As a result, they suggest that the Modi Government might fall short of securing a majority this time.

However, all this rhetoric just tells us how much (or how little) the opposition knows about the Indian electorate. It is no wonder that PM Modi keeps winning election after election, and the opposition keeps wondering how he does it.

What Wins Election India

One of the few models that have accurately predicted all US elections since 1984, including Donald Trump’s win in 2016 and Joe Biden’s win in 2020, is the Structural Model developed by Allan Lichtman, a professor based in Washington, D.C. The model, detailed in his book, “Predicting the Next President: The Keys to the White House 2016,” uses a system of “keys” to predict election outcomes. These keys are based on the idea that elections primarily reflect the performance of the party in power and consider population behaviour at a macro level. They are unlike polling methods that sample individual people and extrapolate to the larger population, which tend to have sampling biases and projection issues.

This begs us to question, are there such powerful “Keys” to predicting electoral wins in India at the macro level, especially for national elections? Turns out there is.

The two largest keys to retaining power in India have always been, first, “Mehengai” or Inflation – something that every politician in India is well scared of. And second, the Direct Benefit Programs reaching people. If we combine both the keys into a single key, we get what can be called as “Real Direct Benefit to People,” i.e., direct benefit in the form of subsidies, deliveries, and other benefits that reach people, adjusted for inflation.

The History of Real Direct Benefit Keys

Therefore, the single largest key to retaining power in India has always been increasing direct benefits for people, adjusted for inflation—what I call “Real Direct Benefit.” All other political issues and narratives are built on top of this foundation. This has been the secret sauce used by Congress in earlier eras. UPA did it in Term 1 via MNREGA and Loan Waivers, reaping the benefit of 60+ more seats and a positive voter swing in its favour in 2009, despite bombs going on, guns being fired in Mumbai hotels.

PM Modi’s first term also saw a massive increase in direct benefits through successful and well-delivered Modi Schemes. In fact, he achieved a large Direct Benefit Distribution with extremely low inflation – almost a miracle. And we had 2019, where he returned bigger and better – something that I predicted before the 2019 election using this analysis, as published at SwarajyaMag.

I also strongly agree with Pradeep Gupta of AxisMyIndia when he says that Balakot or no Balakot, PM Modi would have done almost as well in the 2019 elections. He had already delivered what was needed, touching the lives of millions through his Awas Yojana, Toilet scheme, LPG Cylinders, Mudra Yojana, and so many other Modi Schemes.

An important part to remember is that the Direct Benefit Programs can’t be mindless, or the government risks massive inflation. This was observed in UPA’s 2nd term when it suffered through massive inflation (an inevitable outcome if you also distribute money and do not increase economic production) and had no new Direct Benefit program. The heavy inflation robbed the benefit receivers of any actual benefit money received. Anger boiled in the streets, and UPA2 had a devastating blow in 2014, with PM Modi acting as an anchor for an alternative, getting a majority in India after a long time.

Similar are the stories of PV Narasimha Rao and Atal Bihari Vajpayee. Both decreased subsidies; PM Rao also had high inflation, and we saw the result. For PM Vajpayee, it is apt to remember experiences shared by Yashwant Sinha, who commented that when he campaigned in rural regions, people said that because of him, their stoves are not burning – kerosene going from Rs 2 per liter to Rs 9 per liter. Such negative distribution directly impacts the people on the ground, and voting really is the only response that they can give. So despite Sensex, economy, and roads being constructed, we had 2004.

As far as keys to power are concerned, PM Modi has achieved a miraculous feat in his last 10 years. He has overseen India’s and the world’s largest direct benefit programs through his Modi Schemes, all while masterfully controlling inflation, which is currently much lower than historical levels in India. And this is the silent wave that will deliver him a bigger and better mandate in 2024.

The Extensive and Miraculous Modi Schemes

Before we go deeper into the Modi Schemes, it is essential to understand that PM Modi’s record on inflation has been exceptional. In fact, data reveals that he has the record for the lowest Inflation across all PMs of India, with an average CPI inflation of 5.03%, compared to say PM Manmohan Singh of 8.3%. PM Modi’s second term has seen moderate inflation at 5.7% compared to PM Singh’s second term inflation at 10.1%.

Lower inflation is important as it retains the value of the benefit that reaches people, and therefore, each paisa received packs a much bigger bang. On the other hand, in the case of high inflation, as was seen in the 2nd term of PM Singh, any benefits received get subdued by corresponding increase in prices.

But PM Modi has not only outperformed on inflation; he has presided over the largest benefit distribution programs worldwide, present, or past. And this inflation-controlled expansion of Modi Schemes is the silent wave that is coursing through the nation in the 2024 elections.

So, for those who feel that 2024 is a no-wave election, they must know that the wave is the Anna wave of those 80-crore people who receive 5 kg of Anna every month to ensure no one goes hungry. The wave is a Jal wave of clean tap water provided to over 115 million households. The wave is the Awas wave of over 33 million homes built for countless families – a game-changer for many who were living in slums or kachcha houses.

The wave is of countless lives saved via PM Jan Arogya Yojana (PM-JAY), the world’s largest government-funded health insurance scheme, providing health coverage to over 107 million households who availed hospitalization benefits worth Rs 82,000 crore. The wave is of those 100 million LPG connections that have significantly reduced indoor air pollution in rural households. It is of 500 million bank accounts opened. And of 100 million toilets constructed making India open defecation free.

The wave is also Pradhan Mantri Mudra Yojana (PMMY), which has sanctioned 43 crore (430 million) loans to small and micro enterprises, fostering grassroots entrepreneurship. Of these, 31 crore Mudra loans have been extended to women. This is the wave of benefit schemes like Kisan Samman Nidhi Yojana, Atal/Virdha Pension Yojana, and other such schemes directly reaching people 100 percent without leakage.

Such a strong series of waves! All without inflation going up. And then the Analyst surprisingly say that this is a no-wave election! Perhaps it is because they can only see the waves that touch them, not the ones that cover 80% of the people of India. For this 80% Modi Schemes are miraculous in the country where nobody used to care for them, and where amongst the few schemes that reached them, 85% of the money used to be siphoned off.

What to Expect in 2024 Election Results

As the key to power in India goes, with control of inflation, even 1 or 2 schemes are good enough to provide for an Incumbency and the PM returning. Here, PM Modi has provided for a series of schemes, targeting the overall lifecycle of the citizenry; there is little doubt, if any, that he will return bigger and better this term as well.

How much better? Going by the 2019 and other historical precedents, we can possibly assume a 4-6% improvement in votes and perhaps 20 to 30, or more, seat additions. While the exact improvement can be debated, there should be no doubt that 303+ is the minimum that should be expected.

Before concluding, let us also shortly talk about the lower voter turnout in the early phases of the election, which seems to have balanced out later. Despite the BJP’s extensive national programs like the Awas, Anna, and Jal schemes, which offer significant benefits, not everyone votes for the BJP. Factors such as existing beliefs or religious considerations may deter people from supporting the BJP. Often, such non-BJP voters initially withdraw from voting altogether before gradually shifting their allegiance to the BJP over several election cycles. Some may never vote for the BJP but may choose not to vote for any party, acknowledging the benefits received from the BJP, contributing to the overall lower voter turnout. This pattern has been previously observed in Gujarat. And this may well be the reason of lower turnout observed in initial phases of current elections.

Ayodhra Ram Mandir special coverage by OpIndia

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Prof. Vidhu Shekhar
Prof. Vidhu Shekhar
Dr. Vidhu Shekhar is a Financial Economist and an Academic. He has a PhD from IIM Calcutta, an MBA from IIM Calcutta, and a B. Tech(H) from IIT Kharagpur. Prior to his PhD, he was an Investment Banker and Hedge Fund analyst working across Multi US$Bn Global Hedge Funds and Investment Banks. Views are personal.

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