It’s the economy! Rural voters send out a strong message on economic distress

In the party’s stronghold of Uttar Pradesh, its candidates have conceded defeat in high-profile constituencies such as Ayodhya, where Prime Minister Narendra Modi participated in January in the star-studded inauguration of the Ram Temple, delivering on a long-standing commitment of the BJP. 

In Amethi, Union minister for women and child development, Smriti Irani, has lost to a low-key party worker of the Congress. Modi’s victory margin in his constituency, Varanasi, has reduced from more than 600,000 votes in the 2019 election to under 200,000.

Uttar Pradesh, a state with (nominal) annual income per head of ₹70,792, or less than half the national average, is one of India’s poorest. But the state has a large proportion of voters. If it were a country, its population of 240 million would make it the world’s sixth-largest. A considerable proportion of this population is dependent on farming.

Since the arrival of Modi in national politics 10 years ago, this state had voted overwhelmingly for the BJP in the Lok Sabha as well as in state assembly elections. Perhaps in the hope for prosperity and development.  

But if the early results from the Lok Sabha poll are an indicator, UP’s patience seems to have run out.  

The national income accounts and data on the real rural wages tell a story of distress.  

Although India is the world’s fastest-growing major economy—with GDP growth of 8.2% in the 2023-24 financial year—not all Indians are experiencing this boom.  

The agriculture sector grew at a mere 1.4%. Why is it important to look at the agriculture sector? Because the government’s figures show that 45% of India’s working population is employed on the farms. This means that 45% of the working population is experiencing not 8.2% growth but 1.4% growth. This also explains why the growth in consumption, according to the GDP estimates released for FY24, was only 4%, which is less than half the 8.2% aggregate GDP growth.  

The government speaks of India’s headline GDP growth rate doing well but chooses to exclude from that heady narrative the all-important detail of rural, agriculture population struggling to make ends meet.  

Uttar Pradesh is likely to be home to a chunk of the masses with incomes too low to afford hardly any consumption. The biggest message UP’s voters have sent out is that the rural economic distress has gone unattended for long. And that the draw of the Hindu-nationalist ideology works only up to a point, after which bread-and-butter economic issues take centre stage—as is clear from the election result in Ayodhya.

Remember, it was the Rath Yatra for the Ram Temple that had brought the BJP back from its political wilderness of mere two Lok Sabha seats to the country-wide political dominance it has been handed by voters in recent years. 

It’s not that the signs of rural distress were missing. Wages and earnings have been low and stagnant or even declining. Several analyses, including the ‘India Employment Report 2024’ just released by the International Labour Organisation (ILO), have shown this.  

“Over the past decade, the average monthly real earnings of regular salaried and self-employed persons either declined or remained stable. The average real earnings of casual workers only slightly increased, pointing to poor-quality employment generation," the ILO said in its report.

The average monthly real earnings for regular salaried workers declined annually by 1.2%, from ₹12,100 in 2012 to ₹11,155 in 2019, and by 0.7% as of 2022, to ₹10,925 rupees. 

Similarly, the average real earnings of self-employed individuals declined annually by 0.8%, from ₹7,017 in 2019 to ₹6,843 in 2022. The average real monthly earnings of casual workers, however, increased by 2.4% annually, from ₹3,701 in 2012 to ₹4,364 in 2019, and by 2.6% annually, to ₹4,712 in 2022.  

The declining real earnings of regular salaried workers and the self-employed, along with only a small increase in real wages for casual workers in India, indicates that the quality of employment generation was poor between 2000 and 2022, ILO said in its report. 

Separately, research published by ICRIER economists led by Dr. Ashok Gulati shows that in rural India real farm wages growth decelerated 3.3% per annum from 2014-15 to 2018-19. Non-farm wages in the same period decelerated 3% per annum. From 2019-20 to 2023-24, these rates became negative. 

How did the election strategists of the BJP miss the high levels of economic distress? The blame for rural distress becoming the BJP’s blind spot must go to its echo chamber of economists and spin doctors who have systematically obliterated analyses, empirical studies, and government surveys from the discourse.  

The BJP, it seems, did not have its ear to the ground, the disconnect with the voter becoming apparent when party leader Varun Gandhi was denied a ticket to contest the election this time as he had been voicing the rural distress, especially in UP.  

Meanwhile, the Modi government has prioritised infrastructure development—doubling the number of airports from a decade ago, and adding 10,000 km of roads and 15 GW of solar-energy capacity a year—over rural India, where the bulk of the voters live. The benefits haven’t trickled down as fast as it would have liked to the rural population, especially as infrastructure development isn’t as labour-intensive anymore.  

The Modi government has been content to offer rural Indians “welfare"—free food and electricity, and farm subsidies, rural housing, and a rural jobs programme. It hasn’t proved enough, if the voting outcomes are anything to go by, to compensate for the meagre incomes.