Simultaneous elections could lead to 1.5% point rise in GDP growth, Parliamentary panel told

The researchers referred to the election cycles and how simultaneous polls continued till 1967 before some assemblies and Lok Sabha faced different schedules.

Simultaneous elections in India could lead to a 1.5 percentage point rise in real GDP growth, higher capital expenditure and increased investment activity, former finance commission chairperson N.K. Singh and another economist told the joint parliamentary committee on One Nation One Election on Wednesday.

Mumbai, India. Nov 20, 2024: People searching for their name in the voting list outside a Polling station in the Ghatkopar area during the Maharashtra State Assembly elections in Mumbai. Mumbai, India. Nov 20, 2024. (Photo by Raju Shinde/HT Photo) (Hindustan Times)

In a joint presentation, Singh and Prachi Mishra, director of Isaac Centre for Public Policy at Ashoka University, said the uptick in growth would amount to ₹4.5 lakh crore in FY24 figures, according to people familiar with the matter. This would be almost half the total health budget or a third of the education budget, they pointed out.

But the two economists also cautioned that the fiscal deficit may rise by 1.3 percentage points due to higher post-election spending.

In their presentation, based on a study published in June 2024, Singh and Mishra referred to the election cycles in India and how simultaneous polls continued till 1967 before some assemblies and Lok Sabha faced different schedules..

When national and state elections were held together in India, including when over 40 per cent of the assemblies went to polls the same year along with the Lok Sabha, they said their studies indicated the capital-to-current spending ratio is 5.4 percentage points higher than after simultaneous elections, indicating a shift towards productive and return-generating investments.

The investment ratio against the gross fixed capital formation also goes up by 0.5 percentage point, reflecting greater investment activity, especially private and foreign, the presentation said.

Singh and Mishra added that frequent elections disrupt economic activity due to uncertainty, adversely impacting manufacturing, construction, tourism and healthcare, with migrant workers frequently returning home and affecting productivity.

Noting that migrants comprise nearly one-third of India’s population, they said multiple elections impose financial burden on them, weakening their use of their voting rights.

School enrolment also goes down by 0.5 percentage point around non-simultaneous elections due to the deployment of teachers on election duty and schools being converted into polling booths, they said.

They argued that the diversion of police for frequent electoral duties leads to a growth in crime during non-simultaneous elections due to a longer duration of deployment.

(With PTI inputs)