How people will feel in 2019 will decide the outcome.

"Will an economic slowdown hamper Modi's re-election bid?" asked P Chakravarty. GDP growth fell to 5.7% in the April-June quarter, current account deficit jumped to 2.4% of GDP, private consumption and investment demand are falling, and non-performing assets, or NPAs, of banks are rising. Total NPAs climbed to more than Rs 8.3 trillion at the end of the June quarter. The next general election is due by May of 2019, which is 18 months from now, so speculation on the outcome has already begun. "Political science theorists and public commentators intuit a relationship between GDP and electoral outcomes and thus proclaim that the 2019 electoral air is now getting murkier," wrote Chakravarty. Is it? Most people do not understand what GDP means and do not care. "In national elections, the National Democratic Alliance (NDA) from 1999-2004 delivered average 5.8% GDP growth and was voted out while the United Progressive Alliance (UPA)1 (2004-09) delivered 8% GDP growth and was voted back." What about elections in states? "In 27 of the 36 elections in this analysis, the ruling party lost vote share, regardless of GDP performance. But the ruling party won its re-election 19 times out of these 36 -- 12 of them with a lower share." "Of the 24 times that the ruling party delivered a higher GDP growth than in the previous tenure, it still lost vote share in 18." So is the GDP irrelevant? "...the ruling party has a 75% chance that it will lose vote share when it delivers higher GDP growth but more than a 90% chance that it will lose vote share when the economy slows." So, growth matters, negatively. Inflation also did not seem to affect voter behavior. The numbers are actually worse than they look, wrote M Chakraborty. Any growth that occurred was due to government expenditure. Government final consumption expenditure went up to 34.1% from 23.8%, whereas private final consumption expenditure declined to 62.3% from 66.2%. Services increased while manufacturing contracted. However, Index of Industrial Production, or IIP, rose 4.3% in August, while retail inflation remained steady at 3.28% in September, and wholesale prices rose by 2.6%, down from 3.2% in August. GDP growth from 2014 to 2016 was due to just one reason, and that is precipitous fall in oil prices, wrote M Chakraborty. When that reversed growth rate fell as windfall gains dried up. So, what will decide whether the people will give Modi a second term? It will depend on how people feel. Private consumption is down as manufacturing jobs are set to fall by 30% this year, wrote J Rodrigues. Which means, household finances of Indians are in a precarious state, wrote M Chakraborty. It may come down to the number of notes in our pockets.