Bernstein has analyzed recent voter turnout figures in the ongoing Lok Sabha elections and concluded that there is no apparent correlation between voting percentage and election outcomes based on past elections. Therefore, investors should not attribute too much significance to the turnout numbers. According to Bernstein, a significant decline in voter turnout (over 5%) without substantial anti-incumbency sentiment could result in minimal variations from the 2019 election results. However, a substantial decline in vote share (over 5%) coupled with significant anti-incumbency could potentially alter the election landscape and become a market-defining event. Bernstein also highlights that the increased unity among opposition parties at the national level could have meaningful consequences only in the event of a significant vote share decline and anti-incumbency. The firm notes that the data released on voter turnout does not include ballot voting, which has a greater impact than in previous years. Nonetheless, Bernstein maintains that barring a sharp drop in voter turnout or significant anti-incumbency, the overall election results are unlikely to be significantly impacted, and the BJP is well-positioned to secure a victory in the Lok Sabha elections. Bernstein further analyzes the potential impact of swing voters and the lack of strong anti-incumbency sentiment against the BJP. The firm suggests that a decline in swing voters could favor the BJP’s core supporters, who are more likely to vote. Even considering a modest decline in overall voting and generously assuming that the Indian National Congress (INC) captures a significant portion of the anti-incumbency votes, Bernstein estimates that the BJP’s vote share would still remain ahead of the INC’s. This indicates that even with some degree of anti-incumbency, a minor vote share decline is unlikely to result in any major election surprises. While the opposition may gain some seats due to the combined alliance, a substantial loss of seats for the BJP is deemed improbable.
Low Voter Turnout in Lok Sabha Elections: Should Investors be Concerned?
