[Global Focus] The World's Largest Election Has Begun... India's 'Modinomics' Accelerates

India, a populous country with 1 billion voters, began its general election on the 19th (local time) to decide the power dynamics for the next five years. The election results, which are expected to confirm Prime Minister Narendra Modi's third consecutive term, will be announced on June 4. If he succeeds in securing a third term, the so-called 'Modinomics,' which has driven India's economic growth over the past decade, is expected to accelerate further. However, challenges such as persistently high unemployment, wealth inequality, high inflation, and concerns about democracy remain key issues for the Modi administration.

[Image source=AP Yonhap News]

◆6 weeks, 969 million voters... "The world's largest democratic festival" begins

India, a parliamentary system country, will elect 543 members to the federal lower house (Lok Sabha) in this general election. Over six weeks, approximately 969 million voters will cast their ballots in what is called the 'world's largest democratic event.' There are as many as 2,600 small registered political parties participating in the election. Voter turnout is also relatively high. In the past general elections of 2014 and 2019, turnout rates were 67.4% and 66.4%, respectively. Rajiv Kumar, Chairman of the Election Commission of India, emphasized, "The Lok Sabha general election is the world's largest democratic festival."

The reason this year's election is held over six weeks is that it is conducted in seven phases with regional time differences. The Guardian reported, "Indians take pride in an election that ensures even those living in the remotest corners and highest mountain peaks of this vast country can vote," adding, "In hard-to-reach areas, voting machines are transported by horses and elephants. The Himalayas host the world's highest polling station at an altitude of 4,650 meters."

[Image source=EPA Yonhap News]

◆Prime Minister Modi anyway?..."Ruling party expected to win overwhelmingly"

So far, various opinion polls predict a landslide victory for the ruling coalition led by Prime Minister Modi's Bharatiya Janata Party (BJP). In an India TV-CNX poll released earlier this month, the BJP was estimated to secure 342 seats, with the ruling coalition including the BJP expected to win 399 seats comfortably surpassing the halfway mark of 272 seats.

Foreign Policy noted, "In India, the question is not whether Prime Minister Modi and the ruling coalition will win, but by how overwhelming a margin they will win." The Associated Press also highlighted, "Modi, who champions Hindu nationalism, is expected to win comfortably," adding that if this happens, Modi will make history alongside Jawaharlal Nehru, the first Prime Minister, by achieving a 'third consecutive term.' The ruling coalition currently aims to secure more than 400 seats.

The background to this expected landslide victory is Prime Minister Modi, who boasts a solid support rate of 75% based on strong economic growth despite various controversies such as Muslim oppression. Since Modi took office in 2014 with the 'Make in India' initiative, the Indian economy has maintained rapid growth. Last year, India's economy was estimated to be worth about $3.7 trillion, ranking fifth in the world. This is a jump of four places since 2014, with growth during this period reaching as high as 83%.

◆"Will become the world's 3rd largest economy" Modinomics to accelerate

If Prime Minister Modi secures a third term, Modinomics is expected to gain even more momentum. Ahead of the general election, Modi pledged to elevate India to the ranks of developed countries by the 100th anniversary of independence in 2047. He also declared that India’s Gross Domestic Product (GDP) would exceed $5 trillion by 2027.

The market also expects India's growth momentum to continue for the time being. Wall Street asset management firm Jefferies predicted that Modi, who is pro-growth and pro-business, will lead India to become the world's third-largest economy by 2027 with his third term. They also forecast that the market capitalization of the Indian stock market will exceed $10 trillion by 2030. The Indian stock market surpassed $4 trillion for the first time in history last December.

The New York Times (NYT) introduced that "foreign investors are also responding positively to the Indian economy under the Modi administration." Currently, India is set to be included in major benchmarks such as JP Morgan's Emerging Market Bond Index (GBI-EM) starting at the end of June, which is a positive signal leading to increased capital inflows.

Additionally, India's 'Make in India' strategy to become a high-tech manufacturing base replacing China is also showing results one by one. A representative example is Apple, which has been diversifying its iPhone production bases in recent years and significantly increasing production within India. Major foreign media also expect that under Modi's third term, India will undertake large-scale deregulation to further promote corporate investment, leading to a massive influx of investment funds.

[Image source=Reuters Yonhap News]

◆Shadows behind rapid economic growth

However, problems such as wealth inequality, high unemployment, and inflation have also been confirmed behind the rapid growth. According to the World Inequality Lab, as of the end of last year, the top 1% wealthiest in India held 40.1% of the country's total assets. The NYT pointed out the so-called 'Adani scandal,' which fueled suspicions of collusion between business and politics, criticizing it as "the risk of Modi's strategy that allowed only a few to accumulate enormous influence."

Complaints about high unemployment are also mounting. About 7% of Indians are unemployed, and even more are considered underemployed. CNN reported, "The unemployment rate among Indian youth with graduate degrees exceeds 29%," and pointed out, "If Modi succeeds in his third term, he faces the enormous challenge of creating hundreds of millions of jobs for the poor." Foreign Policy also diagnosed, "There are many challenges, from widespread unemployment to challenges posed by China."

Furthermore, the British BBC reported, "Modi remains a divisive figure," noting that "his critics point to suppression of dissent, favoritism toward the wealthy, and violence targeting Muslims and minorities," highlighting ongoing controversies.