‘Synchronised elections will lead to higher GDP growth’

Synchronised elections will lead to “higher economic growth, lower inflation, higher investments and improved quality of expenditure”, the report on ‘One Nation, One Poll’ submitted to President Droupadi Murmu claims. According to the panel, simultaneous elections will lead to an approximately 1.5 percentage point growth in the GDP.

Quoting a research paper titled “Macroeconomic Impact of Harmonising Electoral Cycles” by Prachi Mishra and NK Singh, the panel said the findings in the paper suggest “relatively higher economic growth, lower inflation, higher investments and improved quality of expenditure following periods of synchronised elections”. The estimates of each of the macroeconomic indicators were based on a comparison between synchronised and nonsynchronised elections in the past. The report specifically elaborates on the higher GDP growth that synchronised elections are supposed to produce.

COMPARING CHANGES

“Comparing changes in real national GDP growth before and after episodes of simultaneous and nonsimultaneous elections, the estimates suggest that on average, real GDP growth is higher following episodes of simultaneous elections, while we find a decrease post the nonsimultaneous episodes. The magnitudes suggest approximately 1.5 percentage points (hereinafter referred to as p.p.) higher postpre difference in real national growth during simultaneous elections as compared to nonsimultaneous elections,” said the report. “To put the magnitudes in perspective, 1.5 per cent of GDP is equal to INR (Indian Rupee) (4.5 lakh crores in financial year 2024, half of the public spending on health and onethird of that on education. Publicly reported estimates of conducting national and state elections, beyond the official costs of conducting elections, range from ₹47 lakh crores, which are close in orders of magnitude to our growth estimates,” it added.

INFLATION RATE

The report said the annual inflation rate would also be lower because of simultaneous elections. Talking to businessline, the head of the Congress’s research unit and former professor of Economics at the IIM, Bangalore, M V Rajeev Gowda said: “If you actually think about consumption which drives the economy, what happens in some elections in some states is that certain amount of money flows into the system. If you have synchronised elections and an injection of money into the system, it stands to reason that in nonsynchronised elections there would be multiple such injections. If you have only one election, tell me how that can be more impactful?”

According to Gowda, the conclusion drawn in the report seems to be “politically motivated”.

A number of economists that businessline spoke to said that prima facie, it would be hard to conclude that simultaneous elections would lead to a bump up in GDP growth. The analysis cited in the report could, they said, “be just a coincidence”.

Said Madan Sabnavis, Chief Economist, Bank of Baroda: “The major benefit will be on saving in costs as economies are achieved”.