More than 640 million people voted during India's seven-phase election. EPA
More than 640 million people voted during India's seven-phase election. EPA
More than 640 million people voted during India's seven-phase election. EPA
More than 640 million people voted during India's seven-phase election. EPA


India's elections defied the world's expectations of its democracy


Hindol Sengupta
Hindol Sengupta
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June 07, 2024

In some places, donkeys carried the election voting machines (EVMs) through dirt tracks to reach a few voters (sometimes even one) deep inside forests, or on top of top mountains. In some others, jeeps and even ox carts waded through rivers and streams to ensure, as the law mandates, no voter should have to travel more than two kilometres from the place they are registered to exercise their democratic right.

India’s seven-phase election saw more than 640 million voters (of a total of nearly 970 million) express their democratic opinion across 28 states and eight union territories spread over more than one month.

Each Indian election is the biggest ever democratic exercise in history, not least because India is the world’s largest country by population. But to state that almost diminishes the value of a lower middle-income country with 22 official languages running a fully digitised election process using EVMs and with no complaints of fraud or malpractice. Unlike in American elections, there are no incessant complaints of “election theft” and no rampaging mobs assault the Indian Parliament as happened on Capitol Hill in 2021 after the defeat of Donald Trump.

There were no arrests, no killings, no riots and no mass violence in the Indian election. In Mexico, which had an election simultaneous to India’s, 37 people were murdered. Mexico’s per capita GDP is around four and a half times larger than India’s.

And yet, for the past two years, there has been a chorus, especially across the West, that India’s democracy was in trouble, that it was “backsliding” (as America’s Centre for Progress claimed in July of last year). Around the same time, the Journal of Democracy published an essay declaring that India’s democracy was “dying”. The American think tank Freedom House downgraded India to a “partially free democracy” in 2021, from a “free democracy”. Similar descriptions and rankings, and opinion pieces, came from other quarters including Sweden’s V-Dem Institute.

One British academic started talking about India as a “one-party state” because the Narendra Modi-led Bharatiya Janata Party (BJP) government had won back-to-back, full-majority elections in 2014 and 2019 with anticipation of a third victory in 2024. This was said without irony, as some Indians pointed out, in the UK, which is in its 14th year of unbroken Tory party rule.

For the past two years, there has been a chorus, especially across the West, that India’s democracy was in trouble

As it so transpired, 751 political parties participated in the Indian elections, up from 677 in 2019, according to the Association for Democratic Reforms, an Indian think tank. And the BJP did not get a full majority, even though it emerged as the single-largest party, and Mr Modi would be governing a coalition with two other major state-based parties whose support is necessary for the functioning of what is now India’s government-in-waiting.

Indian Prime Minister Narendra Modi, left, sitting besides Chandrababu Naidu, centre, and Nitish Kumar, in New Delhi. Mr Modi will lead a coalition with two major state-based parties led by Mr Naidu and Mr Kumar. AP
Indian Prime Minister Narendra Modi, left, sitting besides Chandrababu Naidu, centre, and Nitish Kumar, in New Delhi. Mr Modi will lead a coalition with two major state-based parties led by Mr Naidu and Mr Kumar. AP

The main opposition, the Congress party, bounced back after a decade of slump to nearly double their number of seats, and, further defying widespread expectations, even the parliamentary seat where the grand new Ram temple has been built, which has been a cornerstone of the BJP’s Hindu nationalist politics, was won by a state-level political organisation, the Samajwadi Party. The BJP, though, gained many seats in the eastern part of the country, in Odisha and Andhra Pradesh, which for long had been bastions of other regional parties.

This election also broke another set of theories, which had been propagated internationally and at home – namely, that the BJP wins mainly in poorer, but large and populous states in the north (often called the "Hindi heartland" because Hindi is the predominant language there) while the richer, more literate, more industrialised and less populous states in the south of India do not vote for the BJP.

This theory appeared in several international publications with the catchy moniker India’s “north-south divide”. Only, this election proved this to be completely wrong.

Support from key southern states like Andhra Pradesh, Telangana and Karnataka were critical in getting Mr Modi to this point, where he is preparing to take the oath as Prime Minister once again and complete a hat-trick. Even in a state like Kerala, which was, in popular punditry, seen as impossible to breach for the BJP, the party broke in and won an important seat. In Tamil Nadu, the BJP hit its highest ever vote share of nearly 11 per cent.

The result, and the aftermath, has been uniquely Indian. The BJP alone won 240 seats – more than the entire opposition INDIA alliance (234) – yet it sounded despondent. It had aimed to win 400 seats along with its coalition partners, but they were stopped at 293. And the despondency is in spite of the fact that no other party since 1991 has ever won as many seats as the BJP. Congress, with only 99 seats, has been celebrating as it sees a real chance to bounce back after a decade. And India is once again in an era of coalition deals on ministerial berths and responsibilities as per seats won – something that was forgotten for 10 years.

Mr Modi will soon be the only Indian prime minister after Jawaharlal Nehru, the country’s first, to be hold the chair three times. You wouldn’t know it from the joy being displayed by opposition leader Rahul Gandhi, though.

But that’s the curious nature of a democracy as vast and sprawling as India, where the only people who perhaps really understand are the ordinary Indians, tens of millions of them, who braved temperatures rising to 45°C and more to cast their vote, and ordinary electoral officials, some of whom, in the line of duty during this extraordinary summer, in fact died of extreme heatstroke.

This is a commitment to democracy that Indians would argue outsider analysts, quick to judge, slow to comprehend and often from erstwhile colonial powers, could never understand, let alone judge.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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