ONOE can lead to 1.5 percentage point rise in GDP: Experts to parliamentary committee

New Delhi: Former finance commission of India chairman N K Singh and another expert on Wednesday made an economic case for simultaneous elections before a parliamentary committee, saying it can lead to a 1.5 percentage point rise in the real GDP growth around polls, higher capital expenditure and more investment activity, sources said.

In their joint presentation before the joint parliamentary committee, which is scrutinising the constitutional amendment bill for 'one nation one election' (ONOE), they quantified the rise in the GDP at Rs 4.5 lakh crore in terms of 2023-24 figures.

However, they added that the fiscal deficit is also expected to rise by 1.3 percentage point around polls due to higher post-election spending.

Singh, a former MP and revenue secretary, and Prachi Mishra, economics professor, and head and director of Isaac Centre for Public Policy at Ashoka University, studied election cycles in India as it had simultaneous polls till 1967 before the schedules of Lok Sabha and assembly polls were split.

The expected rise in the GDP figure, the sources added, is almost half of the total health budget or a third of the education budget.

Studying the economic figures 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 the capital-to-current spending ratio is 5.4 percentage points higher than post-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.

Frequent elections disrupt economic activity due to uncertainty, adversely impacting manufacturing, construction, tourism and healthcare, with migrant workers frequently returning home and affecting productivity, they said, according to the sources.

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.

Non-simultaneous elections require more imposition of the Model Code of Conduct, restricting government functioning and slowing down development work.

India has not had a single year without elections since 1986, placing the country in a perpetual election mode. It leads to a "spillover of populist promises", resulting in a "policy contagion effect", the sources citing the presentation said.

Frequent elections fuel unsustainable welfare measures, Singh said, describing it as a "race to the bottom" in fiscal populism.