HW English

Modi ji, the “Feel Good” factor is missing

The Indian economy and Mr Modi face a similar situation today. Balakot or no Balakot, our real economy is in a sharp slowdown mode now since many quarters.


It has been a shameful election season so far, with decency in public conduct touching new lows every day. It has been a free for all slugfest, with no holds barred and expletives and baseless allegations being hurled from all sides of the polity. Indecency gives no feeling of goodness and the feel-good factor of decency and decorum in public life has been missing. But apart from political ideologies and prejudices, which influence voters, a huge factor that helps to win elections is a feel-good factor. And among all the factors that make a common man feel good, is a feeling of prosperity. A feeling of economic well being and security. Thus at a time when the corporate and household incomes are falling and the values of household assets such as shares, real estate etc. are going down and so is consumer spending, the feel-good factor of the common man is very low and it translates into votes against the ruling party.

In a matured democracy, the feeling of economic prosperity is generally a far more compelling factor that influences voters, as we saw in the defeat of George Bush Senior to Bill Clinton in 1992, in the American presidential elections. The USA then was riding high due to its stunning victory in the Gulf War and everyone thought that George Bush would win the elections, which he did not. The American economy was in a downturn like ours and it was facing a savings and lending banks crisis like our NPA crisis and George Bush had increased tax rates, and that’s the reason that he lost a foregone victory. That’s when America coined the slogan, ‘its all about the economy stupid’ when it comes to elections.

The Indian economy and Mr Modi face a similar situation today. Balakot or no Balakot, our real economy is in a sharp slowdown mode now since many quarters, corporate and household incomes, have receded, unemployment is on the rise, confidence in the economy is missing, the rural sector and the SME sector are in a crisis mode and the overall feel-good factor is certainly missing. To us, the following are the reasons/factors, why it is clear that the ordinary voter is not feeling economically secured and the feel-good factor is certainly missing, which will be a decisive undercurrent in voters deciding who will they vote for.

  1. Except in case of a few select stocks, the overall stock market valuations have depleted. The real estate prices remain depressed as ever. With valuations of shares and real estate down, a common man feels poorer than what he was before and will only tend to blame the government for it.
  2. Household incomes have fallen, particularly due to rising unemployment and distress in the SME sector and the rural sector. That makes a man feel poor and insecure and builds opposition to the ruling party.
  3. It is said that consumerism and consumption make a person feel good. The falling sales of cars and two-wheelers and the FMCG companies show that a nervous consumer is not spending and is likely to vote against the ruling party.
  4. Corporate profits are receding and their confidence in the economy is missing, which explains why they are not investing in new projects. To top it, many face banking stress, with the likelihood of default, due to their decreasing profits. The feel-good factor is clearly missing among.
  5. The SME sector, apart from reeling under the onslaught of decreasing sales and income, is also unable to withstand the coercive tax recovery measures and heavy-handed corporate laws, where for no reason more and more forms are to be filled up and huge penalties are extracted. They also are unable to comply with the complicated GST laws, apart from their liquidity suffering due to the blatant delay in releasing refunds by the Income Tax Department. A large section of the SME sector is battling for survival and is bound to not feel good at all.
  6. The fate of many small enterprises, in particular, is stuck in the unresolved NPAs of big borrowers, of whose they were the hapless suppliers. Moreover, bank credit is not easy to come by, which leads to closure of enterprises, at times for no fault of theirs.
  7. With such heavy-handed laws, tax coercion, mindless corporate compliances, the real ease of doing business is missing, irrespective of the claims made by the government.
  8. Many sectors such as real estate, telecom, steel, gem and jewellery, automobiles, power, white goods etc. face a crisis, together with all those associated with it.


The feel-good factor of income, wealth and prosperity is certainly missing and so is confidence in the economy. To us, these are the real issues that will influence the voters and will also override their personal political ideologies or affiliations. A family that has unemployed adults, or struggling business, or that faces unjust tax coercion, or whose funds are lost in a bankrupt entity is bound to seek better political options than the ruling one.

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