“He didn’t even spare his co-founder. Everyone saw her mental and physical ordeal on her last day in November 2021 at the Vikhroli office.”

“Wanting to prove himself like Elon Musk, X Founder buys 35% stake in a startup destined to become India’s Theranos.”

“The founder has sold all startup assets to a company owned by his relatives and friends.”

The combined public valuation of the three startups mentioned above is over $10 billion. These shocking revelations have reemerged in my inbox, marking the return of startup whistleblowers after a quiet few years. Once again, anonymous insiders are pulling the curtain on the dark corners of India’s startup scene, where the pressure to succeed justifies all means.

One claims a founder is artificially inflating revenue numbers and ruthlessly slashing jobs. Another accuses a unicorn founder of backing corrupt startups created by his ex-employees. 
While I’m still bewildered by these accusations, their specificity suggests they’re not just baseless rants, but potentially true claims from insiders. These are supported by regulatory filings, public and private conversations, screenshots, etc. There are audio recordings, too. 

A Second Coming?

A few years ago, Twitter (now X) was the battleground where handles like ‘Unicon Baba’ and ‘Corporate Kumar’ dropped bombshells about the dark underbelly of India’s startup scene. They gave us an unfiltered peek into the chaos behind the curtains – financial missteps, harassment, and the kind of corporate governance that would make any investor squirm. Despite their trolling and the toxicity they brought along, these whistleblowers highlighted genuine concerns that, sometimes, were alarmingly true.

Then suddenly, around the time COVID hit, most of these Twitter (now X) whistleblower accounts vanished. I still vividly remember how some of the revelations about BharatPe founder Ashneer Grover created a storm in the ecosystem. 

Now, as we enter another funding freeze and navigate the uncertainties of AI, these new accounts offer a grim look at how some founders are playing fast and loose, not just with finances but with human dignity.

For many heavily funded startups, there’s a “valley of death” ahead. Their paths to profitability are now a wishful dream, and the monthly cash burns are reducing their chances of survival. Some founders are resorting to questionable tactics, including mass layoffs, siphoning off funds, and finding an escape for themselves. 

A Lot Is At Stake

It seems employees are taking the reins into their own hands, bypassing manipulated Glassdoor reviews to share real stories of fraud and governance failures. But it’s not just their companies that pay the price – these claims send shockwaves through the entire ecosystem. Investors start pulling back, spooked by one bad apple and worried about the whole barrel. This means less money for all startups, not just the ones caught in the act, which can choke off innovation.

These scandals can also damage India’s reputation as a startup hub. And it’s not just about money and reputation. When startups cut corners, jobs are on the line. Talented folks might think twice about joining a startup, leading to a brain drain.

Why is this resurgence of whistleblowers important? Because startups have become adept at gaming systems, be it investor perceptions or employee reviews. However, as financial pressures mount, the veneer cracks and those inside the system are often the first to call it out.

As we sift through these allegations and stories, it’s crucial to remember these whistleblowers’ role in shaping India’s startup ecosystem. They are the necessary disruptors we need in order to face the uncomfortable truths about the startup darlings.

The return of whistleblowers is a healthy cleanse for an ecosystem fraught with unchecked ambitions. 

Welcome back, whistleblowers. Let’s keep the truth coming.

(Pankaj Mishra has been a journalist for over two decades and is the co-founder of FactorDaily.)

Disclaimer: These are the personal opinions of the author

What is inflation? 

In simple terms, inflation refers to an increase in the price of goods and services over a period of time. To illustrate, if five chocolates cost Rs 10 in 2020 and if the price went up to Rs 15 in 2024, it simply means that the cost of chocolates has increased over a period of four years. 

What causes inflation? 

Inflation can happen when the demand for products or services exceeds the supply. This is referred to as demand-pull inflation. Inflation can also arise when the manufacturing or production cost of goods increases, disrupting the supply chain or what is unavailable in the market. For example, India’s major importers of oil were Iraq and Kuwait. This is known as cost-push inflation. When Iraq invaded Kuwait in 1990, it led to a situation of oil crisis in India as the country relies on crude oil to meet its demand. Sometimes, in the event of natural calamities such as earthquake, tsunami or floods, or geopolitical tension like Israel and Palestine war, the supply of the goods that the consumer wants can be disrupted.  

Who monitors inflation? 

The Reserve Bank of India (RBI), the central agency, monitors the inflation rate in India. Usually, when the inflation rate increases, the central bank increases the key lending rate on loans and deposits, discouraging consumers as well as businesses from taking out a loan. When inflation is down, the RBI cuts down the interest rates. This encourages consumers to take loans.  

For fixing the interest rates to tackle inflation, the RBI constituted a six-member monitory policy committee (MPC) headed by Governor Shaktikanta Das. MPC was established on June 27, 2016. Once every six months, the central bank publishes a document called Monetary Policy Report to explain the reasons behind inflation.  

How to calculate?

 The rate of inflation calculated by the National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation, is based on the consumer price index (CPI), a key economic indicator. It measures an economy’s inflation level by considering the basket of goods and services, such as food, transportation, clothing, health, that typical consumers purchase. Based on this economic measure, policymakers can make informed decisions about taxes and interest rates. 

How does it impact us?

 As most of the Indian population belong to the middle class, inflation can have a huge impact on them in several ways. Inflation does not lead to an increase in wages or salaries as they are fixed earnings. This decreases the purchasing power (ability to buy) of consumers, and they become more conscious of buying. For example, if inflation has touched 15% and the salary of an employee remains the same as it was at 10%, then he/she is earning 5% less. Rise in price of household items like sugar, wheat, gas, etc forces the consumer to spend more to maintain a good standard of living. All this can lead to stress and anxiety, taking a toll on the mental health of a consumer. 

As the dust settles on the proposals that the Finance Minister made in the Budget earlier this month, some aspects have become clearer while questions remain on others.

Budget 2024-25 saw several initiatives around employment and skilling being proposed. Do these form a good first step in addressing the jobs challenge the country faces? Or should the government have begun addressing the problem at the level of primary school and worked upwards?

Guest: Amit Basole, Professor of Economics at Azim Premji University

Host: K. Bharat Kumar

Edited by Jude Francis Weston

Listen to more In Focus podcasts:

Amid the final stretch of Lok Sabha elections, onion farmers in the key producing districts of Nashik are cast their votes under the cloud of economic distress and policy dissatisfaction.
| Photo Credit: B. Jothi Ramalingam

In India, the rise in the price of onions has reportedly been a factor that influenced the outcomes of some elections in the past. This time, it is not the price of onions which has the potential to have an electoral impact but the export policy of the Centre.

Chart 1 | The chart shows the average retail price for 1kg of onions in Mumbai and the quantum of onions (in tonnes) that arrived in the city’s markets, month-wise.

Table appears incomplete? Click to remove AMP mode

In December 2023, the Centre imposed a ban on the export of onions to stop surging local prices. Onion arrivals slumped in November-December 2023, leading to a demand-supply mismatch. This resulted in a surge in onion prices to over Rs. 60 per kg and led to the export ban. Many farmers in the onion-growing districts of Maharashtra, especially Nashik, protested on the streets, blocked a national highway at three spots, and disrupted auctions in wholesale markets.

Editorial | A sob story: On onion exports 

On April 25, 2024, in a surprise move, the Centre partially relaxed the indefinite ban on onion exports and allowed the “immediate” export of 2,000 tonnes of white onions, mostly grown in Gujarat. The State went to the polls 12 days later. This decision was criticised by the Opposition leaders and the onion farmers of Maharashtra.

On April 27, the Centre allowed the export of more than 99,000 tonnes of onions, mainly sourced from Maharashtra to six neighbouring countries. On May 4, the Centre lifted the ban on onion exports. It also imposed a minimum export price of $550 per tonne and an export duty of 40%. The onion-growing districts of Maharashtra voted on May 13 and May 20.

These continuous flip-flops have not gone down well with the onion farmers of Maharashtra, suggest reports. On May 15, more than 50 farmers were detained in different police stations in Nashik, ahead of Prime Minister Narendra Modi’s visit to the city. They had planned a protest along with the Opposition against the decisions regarding onion exports. Onion farmers and traders, especially in Nashik, have been up in arms for months now and have shown their anger by suspending onion auctions and going on a strike.

Chart 2 | The chart shows the top onion-exporting districts in India and their share in onion exports.

It is understandable why Nashik in particular is worried about the changing export policy, as the district is responsible for about 90% of onions exported from India (Chart 2). Given the circumstances, it will be interesting to see whether this will have an electoral impact in the 12 parliamentary constituencies, including the Dindori and Nashik seats in the Nashik district, which fall in the ‘onion belt’ of Maharashtra. The other seats are Shirdi, Ahmednagar, Dhule, Nandurbar, Jalgaon, Raver, Shirur, Baramati, Maval, and Pune.

Past election results in these seats show that the voters increasingly supported the Bharatiya Janata Party (BJP). The BJP’s vote share increased from 25% in 2009 to 33% in 2014 to 36% in 2019. The Nationalist Congress Party (NCP) and the Shiv Sena also have significant vote shares in the region ranging from about 15% to 27%, but their vote shares have stagnated in the last few years. The NCP and the Shiv Sena have both split into two parties each. While the NCP led by Ajit Pawar and the Shiv Sena led by Eknath Shinde support the National Democratic Alliance, the NCP led by Sharad Pawar and the Shiv Sena led by Uddhav Thackeray support the INDIA bloc. In Nashik, the two factions of the Shiv Sena are in a direct fight in 2024. In Dindori, Sharad Pawar’s NCP is fighting against the BJP.

Table 3 | The table shows the party-wise vote share split in the onion belt constituencies in the last three Lok Sabha polls.

^ Vanchit Bahujan Aghadi, * Independent, # The NCP and the Shiv Sena have split into two parties each

While the Congress’ vote share is relatively low in these seats, it has increased across elections. The past vote share and seat share in these constituencies are shown in Tables 3 and 4, respectively.

Table 4 | The table shows the seats secured in the onion belt constituencies in the last three Lok Sabha elections.

Also read |Lifting of ban on onion export pushes up prices

President of Argentina, Javier Milei. File

Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.

Prices rose at a rate of 8.8% last month, the Argentine government statistics agency reported, down from a monthly rate of 11% in March and well below a peak of 25% last December, when Mr. Milei became president with a mission to combat Argentina’s dizzying inflation, among the highest in the world.

“Inflation is being pulverized,” Manuel Adorni, the presidential spokesperson, posted on social media platform X after the announcement. “Its death certificate is being signed.”

Also Read: What is the outlook on the global economy? | Explained 

Although praised by the International Monetary Fund and cheered by market watchers, Mr. Milei’s cost-cutting and deregulation campaign has, at least in the short term, squeezed families whose money has plummeted in value while the cost of nearly everything has skyrocketed. Annual inflation, the statistics agency reported Tuesday, climbed slightly to 289.4%.

“People are in pain,” said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90% since Mr. Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. “They say things are getting better, but how? I don’t understand.”

Mr. Milei’s social media feed in recent weeks has become a stream of good economic news: Argentine bonds posting some of the best gains among emerging markets, officials celebrating its first quarterly surplus since 2008 and the IMF announcing Monday it would release another $800 million loan—a symbolic vote of confidence in Mr. Milei’s overhaul.

“The important thing is to score goals now,” Mr. Milei said at an event Tuesday honoring former President Carlos Menem, a divisive figure whose success driving hyperinflation down to single digits through free-market policies Mr. Milei repeatedly references. “We are beating inflation.”

Shrinking economy

Even so, some experts warn that falling inflation isn’t necessarily an economic victory—rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.

“You’ve had a massive collapse in private spending, which explains why consumption has dropped dramatically and why inflation is also falling,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics who studies emerging markets. “People are worse off than they were before. That leads them to spend less.”

Signs of an economic slowdown are everywhere in Buenos Aires—the lines snaking outside discounted groceries, the empty seats in the city’s typically booming restaurants, the growing strikes and protests.

At an open-air market in the capital’s Liniers neighborhood, Lidia Pacheco makes a beeline for the garbage dump. Several times a week, the 45-year-old mother of four rummages through the pungent pile to salvage the tomatoes with the least mold.

“This place saves me,” Pacheco said. Sky-high prices have forced her to stick to worn-out clothes and shoes and change her diet to the point of giving up yerba mate, Argentina’s ubiquitous national drink. “Whatever I earn from selling clothes goes to eating,” she said.

Mr. Milei, a self-proclaimed “anarcho-capitalist” and former TV personality, warned his policies would hurt at first.

“It’s not his fault, it’s the Peronists who ruined the country, and Mr. Milei is trying to do his best,” said Rainer Silva, a Venezuelan taxi driver who fled his own country’s economic collapse for Argentina five years ago.

Bolstered by current and anticipated upticks in demand, manufacturers reported higher confidence levels with expectations of higher output a year ahead. File (Representational image)
| Photo Credit: Reuters

India’s manufacturing sector activity moderated slightly in April, but still witnessed the second-best improvement in operating conditions in three-and-a-half years, as per the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) which fell to 58.8 from the 16-year high of 59.1 recorded in March.

A reading of over 50 on the index indicates growth in activity levels. There was a sharp rise in new orders which grew at the second-strongest pace in almost 40 months, with domestic demand rising faster than export orders. Output growth eased from March but was still the second highest in 42 months.

Bolstered by current and anticipated upticks in demand, manufacturers reported higher confidence levels with expectations of higher output a year ahead. Firms hired more employees at a pace that was moderate, but still the quickest since September 2023. However, the pressure on operating capacities remained mild.

Even though input costs increased, producers ramped up input purchases to the highest level since last June, and their expansion of stock inventories was the third-strongest since early 2005 when the PMI data collection began. Expectations that demand conditions will remain conducive to growth supported inventory-building initiatives, a statement on the index said.

Price increases were reported for materials like aluminium, paper, plastics and steel, and producers raised selling prices during April at the fastest pace in three months, noting that labour costs had also gone up.

“On the price front, higher costs of raw materials and labour led to a modest uptick in input costs, but inflation remains below the historical average. However, firms passed these increases onto consumers through higher output charges, as demand remained resilient, resulting in improved margins,” said Pranjul Bhandari, chief India economist at HSBC.

The India Manufacturing PMI reading for April is milder than that signalled by the Flash PMI released on April 23 which was based on 75% to 85% of responses received from firms for the survey-based index. As per the flash reading, the manufacturing PMI was pegged at 59.1 in April, recording no change from March.

Revenues from domestic transactions grew 13.4%, the Finance Ministry said, while goods imports yielded an 8.3% uptick in the indirect tax collection. File
| Photo Credit: K.V.S. Giri

Year-end compliances lifted India’s gross Goods and Services Tax (GST) revenues past a record ₹2.1 lakh crore in April, reflecting a 12.4% growth over the previous highest tally of ₹1.87 lakh crore in the same month last year. Taking refunds into account, GST revenues for the month were at ₹1.92 lakh crore, 15.5% higher than the collection in April 2023.

Finance Minister Nirmala Sitharaman attributed the ₹2 lakh crore-plus GST revenues in April to “the strong momentum in the economy and efficient tax collections”, and asserted that there were no dues pending on account of IGST (Integrated GST) settlement to the States.

Revenues from domestic transactions grew 13.4%, the Finance Ministry said, while goods imports yielded an 8.3% uptick, helping GST inflows “breach the landmark milestone of ₹2 lakh crore”. This marks a rebound in revenues from goods imports that had contracted 5% in March, while domestic transactions’ growth weakened in April relative to the 17.6% uptick recorded in the previous month. Overall, gross GST revenues had grown at a slower pace of 11.5% in March, while net revenues had risen 18.4%, faster than April’s growth.

April’s GST revenues, for transactions undertaken in March, are typically the highest in a year as taxpayers square their books for the financial year and remit any pending dues to meet compliance deadlines. Following last month’s record spike, experts project revenues to moderate in coming months, with some growth expected over the ₹1.68 lakh crore monthly average GST collection witnessed in 2023-24.

Compensation cess

GST compensation cess collections also hit an all-time high of ₹13,260 crore last month, which included ₹1,008 crore collected on imported goods. The cess is levied on select goods such as automobiles and tobacco products, over and above the peak GST rate of 28%.

Initially introduced for five years to compensate States for revenue losses arising from the 2017 switch to the GST regime, the cess is now being used to repay loans taken during the pandemic to recompense States amid a lockdown-triggered collapse in revenues.

The Ministry emphasised that there had been a positive performance across components, pointing to Central Goods and Services Tax (CGST) revenues of ₹43,846 crore, State GST revenues of ₹53,538 crore and Integrated Goods and Services Tax (IGST) inflows of ₹99,623 crore. The IGST collections included ₹37,826 crore collected on imported goods.

“The Central government settled ₹50,307 crore to CGST and ₹41,600 crore to SGST from the IGST collected. This translates to a total revenue of ₹94,153 crore for CGST and ₹95,138 crore for SGST for April, 2024 after regular settlement,” the Ministry statement said.

State-wise collections

Four States, including the erstwhile State of Jammu and Kashmir, Arunachal Pradesh, and Sikkim, recorded a contraction in revenues last month. Eight States saw muted growth relative to the 13.4% overall growth in domestic revenues, with Jharkhand (3%), Uttarakhand (4%), and Tamil Nadu (6%) seeing the weakest growth. Kerala and Karnataka both registered a 9% increase in revenues, while Madhya Pradesh and Telangana collections grew 11% each.

Revenues in Gujarat, Maharashtra and West Bengal grew close to the national average at 13%. Mizoram reported the highest growth at 52%, followed by Assam (25%) and Delhi, Bihar and Goa, each of which clocked 23% growth. Haryana reported a 21% rise in revenues, while the growth was 20% for Tripura, 19% for Uttar Pradesh, and 17% for Odisha. Revenues in strife-affected Manipur also reported a 15% uptick.

“A significant reason for this growth could be linked to deadline for GST audits and corresponding notices issued during this year,” said Abhishek Jain, partner and national head for indirect tax at KPMG.

The fall in household savings has been at the heart of recent debates in India. The decline in household savings is brought about by a drastic reduction in net financial savings as the household net financial savings to GDP ratio attained a four-decade low. Figure 1 shows the broad trend in household savings, physical savings and gold, and net financial savings.

The sharp reduction in household net financial savings in 2022-23 has been associated with an overall fall in household savings despite marginal recovery in physical savings.

Interpreting lower financial savings

The net financial savings of the household is the difference between its gross financial savings and borrowing. The gross financial savings of a household is the extent to which its financial assets change during a period. The financial assets of households typically comprise bank deposits, currency and financial investments in mutual funds, pension funds, etc. Though household borrowing includes credit from non-bank financial corporations and housing corporations, the bulk of the borrowing comprises credit from commercial banks. In general, there are at least three distinct factors that can potentially bring about a reduction in household net financial savings.

First, households typically finance their additional consumption expenditure by increasing their borrowing or depleting their gross financial savings. By financing higher consumption expenditure at any given level of disposable income, lower net financial savings provide stimulus for aggregate demand and output in this case.

Also read: No small change: on the raising of returns on small savings schemes

Secondly, when households finance higher tangible (physical) investment by increasing their borrowing or depleting their gross financial savings. The reduction in net financial savings in this case stimulates aggregate demand and output through the investment channel.

Third, when interest payment of a household increases say due to higher interest rates, households can meet the increased burden through borrowing or through depleting gross financial savings thereby inducing a reduction in net financial savings.

The first factor hardly played any role in the sharp reduction in gross financial savings in 2022-23 as the consumption to GDP ratio remained largely unchanged between 2021-22 (60.95%) and 2022-23 (60.93%). The second factor played only a limited role. While the gross financial savings to GDP ratio declined by 3 percentage points (7.3% to 5.3%) in 2022-23, household physical investment to GDP ratio increased only by 0.3 percentage point (12.6% to 12.9%) during the same period. Though higher borrowing is partly financed by interest income from financial assets, it can be largely attributed to higher interest payments of the household in the recent period.

Figure 2 reflects this phenomenon by depicting the trend in household borrowing to income ratio, debt to income ratio and the ratio between household physical savings and gross financial savings.

The share of household borrowing in household (disposable) income registered a sharp spike in 2022-23. Such a rise in household liabilities was associated with a decline in the physical savings to financial savings ratio, indicating a change in household asset composition in favour of financial assets.

Implication of higher debt burden

The rise in household debt burden has two concerns for the macroeconomy.

The first concern is about debt repayment and financial fragility. Since the repayment capacity depends on the income flow, a key criterion for evaluating a household’s debt sustainability is the difference between interest rate and the income growth rate. On the flip side, the interest payments from the households are the interest income of the financial sector. If households fail to meet their debt repayment commitments, then it reduces the income of the financial sector and deteriorates their balance sheets, which in turn can have a cascading effect on the macroeconomy if the latter responds by reducing their credit disbursement to the non-financial sector.

Figure 3 shows the difference between the weighted average lending rate of scheduled commercial banks and the growth rate of gross national income.

Though the difference shows a declining trend since 2021-22, the indicator turned out to be negative in the 2023-24 period. The sharp reduction in interest rate and income growth gap is on account of lower income growth rate and higher lending rate of the commercial banks. The weighted average lending rate registered a sharp rise in the last two years, particularly due to the tight monetary policy stance of the RBI and the sharp rise in the call money rate during this period.

The second concern pertains to the implication on consumption demand. Over and above disposable income, the consumption expenditure of the household can be affected by their wealth, debt, and interest rate. Reduction in household wealth can lead to lower consumption expenditure as households may attempt to preserve their wealth position by increasing their savings.

Higher household debt can also reduce consumption expenditure in at least two ways. First, if higher household leverage is perceived as an indicator of higher default risk, then it may induce banks to indulge in credit rationing and reduce the credit disbursement. The consequent reduction in credit disbursement can adversely affect consumption. Second, higher debt can reduce consumption expenditure by increasing the interest burden, not to mention the effect of higher interest rates on consumption expenditure.

The Indian economy registered all these trends in the recent period. The financial wealth or the net worth of the household is the difference between the stock of financial assets and liabilities. As evident from figure 4, the financial wealth to GDP ratio of the household has registered a sharp decline in the recent period, along with a rise in leverage of the household as indicated by the rise in debt to net worth ratio.

Not surprisingly, the growth rate in private final consumption expenditure during 2023-24 registered a sharp decline as compared to 2022-23.

Macroeconomic implication

The implications of the procyclical leverage by the households along with the compositional change in the asset side of the balance sheet, albeit with a fall in the level of savings, for the stability of economic growth is concerning.

First, given that both the flow indicator of liabilities to disposable income and the stock indicator of debt to net worth shows an increasing trend makes the households vulnerable.

Second, the policy mantra of higher interest rate to counter inflation by reducing macroeconomic output and employment can leave households with an increasing level of debt in their balance sheets and potentially push the households into a debt trap. Third, the implications of high interest rate on debt burden can have an adverse impact on the consumption of the households and consequently for aggregate demand.

The household balance sheet trends indicate a broader change in the structure of the economy. The change in composition of the asset side of the household balance sheet towards financial assets indicate some degree of financialisation of the economy which moves from a production-based economy to a monetary or financial exchange-based economy making the five-trillion-dollar economy both jobless and fragile.

Zico Dasgupta and Srinivas Raghavendra teach economics at Azim Premji University.

Irrespective of macro-economic indicators used to prove the point that the economy is doing well, voters are worried about the empirically lived economy that they experience. Image for representation
| Photo Credit: Getty Images/iStockphoto

As the campaign hots up and voters in some parts gear up for voting, all the masala required for the Opposition to corner the ruling BJP is in place and over the next few weeks we shall witness a keen battle on the questions of economy.

Also Read: Lokniti CSDS 2024 Lok Sabha elections: a package

Does economics trump politics or does politics sidestep economics? This has been a perennial debate while analysing electoral politics. This debate is revisiting us in the 2024 campaign. The CSDS-Lokniti pre-poll survey 2024 responses provide visible evidence of the concerns about limited employment opportunities, spiralling prices, increasing corruption, rising rural distress and perception of deteriorating economic conditions of the households. Is this likely to be capitalised on by the Opposition as part of its electoral campaign or will the ruling party be able to offset its impact with a counter-narrative?

Two points emerge distinctly. One, voters are generally aware of the economic distress they are going through. Irrespective of macro-economic indicators used to prove the point that the economy is doing well, voters are worried about the empirically lived economy that they experience. The other point which categorically emerges from the pre-poll data is the visible class divide. The poor and lower middle classes appear to have been more adversely affected by the emerging economic distress as compared to the more economically well placed. This dimension becomes clear when one assesses the multiple layers of the economic disquiet. There is a clear expression of heightened concern among the economically less well-off compared to those in better economic circumstances.

Employment scenario

More than two-thirds of the respondents felt that it has become more difficult to secure jobs. In urban areas and among men, the expression of distress is marginally higher. More than three-fourths of the respondents say that the Union government has a responsibility to expand job opportunities. One notices similar numbers when it comes to responsibility for shrinking job opportunities. How parties present this issue as part of their election campaign will have a key role in building public perceptions in this regard. This survey was conducted when the Congress manifesto had just about made its appearance and the job guarantees of the party were yet to sink in. So, in the upcoming days how this issue will play out is something to be watched.

Similarly, close to two-thirds believe that they witnessed a price rise as compared to five years ago. The poor and rural residents assert this point more sharply than the urban dwellers and those in the middle and upper classes. When comparing the responsibility of State and Union governments on price rises, there is an interesting contrast. While a higher percentage of voters would place the blame for price rise on the Union government as compared to the State, the reverse is true when it comes to giving credit for decreasing prices. It will be interesting to watch how parties play up this issue as part of their respective campaigns and electoral strategies. The BJP may draw some solace from the fact that voters do not seem to hold its government at the Centre solely responsible for the economic mess in which they find themselves. The tactical response of the voters is that both the Centre and the States are responsible for this.

Household income

How do respondents perceive the status of their household income as compared to five years ago? We have compared the responses in a pre-poll survey done in 2019 and the results from the current study. A higher percentage would say we are now able to fulfil our needs and save. A much lower percentage would say that we find difficulty in fulfilling our needs and find it difficult to save money. On this parameter, there is a visible class divide. Half the poor respondents said that we face difficulties in fulfilling our needs. This percentage falls as we go up in the economic hierarchy and only one of every five among the upper class would make this point.

A linked factor is their assessment of the quality of their life. While close to half the respondents said that the quality of life had improved, this percentage of positive reporting falls to a little over one-third when it comes to the poor. There is a clear decline in the reporting of an improvement in the quality of life when one moves down the economic ladder. Similarly, there is a marginal decrease in the expression of a worsening of quality of life as one moves up the economic ladder.

When asked about which segment of the population has benefitted from the development activities of the government, the percentage which said that it benefitted only the rich has gone up by eight percentage points. There was a higher reporting among the poor as compared to the more well to do, that development only benefitted the rich, with the difference being as high as five percentage points.

While responding to questions about the rural distress and farmer woes, close to six of every ten said that this distress was real.

Key issues

Given all these concerns of the economy, it is not surprising which issues will dominate the elections. Half the respondents mentioned unemployment and price rise as key election issues. It would be important to record that in 2019, barely over one-sixths mentioned these two issues according to the CSDS-Lokniti pre-poll survey of 2019. Another one-fourth mentioned development and corruption and this percentage does not vary much from what was there in 2019.

The findings of this latest survey indicate that distress linked to the economy is a matter of grave concern for the voters. The fear of not being able to secure meaningful employment opportunities, the reality of price rise, its impact on life and livelihood and the fact of rural distress is something that is at the back of the mind of respondents. Further, there is a clear class divide in the intensity of responses. The economically less well-off, appear to experience this distress more acutely. This does not imply that the economically well-off do not face economic challenges. They have a wider basket of coping strategies.

So, at the start of a hectic campaign season for the 2024 election, economic distress has the potential to be a key factor. Will the Opposition be able to leverage these issues to their advantage and build an effective campaign around these issues? On the other hand, does the ruling party have a strategy to offset the impact of economic distress and project an alternative narrative? Increasingly, elections are a ‘battle of narratives’ and are about who is more effective in capturing the imagination of the voter.

An associated factor is the belief of the voters as to which party is best suited to address their economic distress. Does the Opposition have a convincing alternative strategy and more importantly, be able to win the confidence of the voter in being better suited to offer a solution to this distress? On the other hand, does the ruling party recognise the presence of this distress and provide a persuasive and powerful argument as to why they are best placed to provide a solution?

The survey findings to be reported over the next couple of days will provide some more clues to answer these knotty questions that are likely to be central to the 2024 election battle.

(Sandeep Shastri is the National Coordinator of the Lokniti Network, Suhas Palshikar is chief editor of Studies in Indian Politics, Sanjay Kumar is Professor and Co-director CSDS-Lokniti)