No government in India has ever won an election when inflation is high, says Ruchir Sharma

Comparing the Modi-led BJP government to the UPA regime, Sharma said, that the focus of the current government has been on creating a balance and not going all out on welfare spending only

In India, the connection between economic growth and electoral outcomes is rather tenuous, said Ruchir Sharma, a renowned global investor and author.

In an exclusive interview to Network18's Zakka Jacob and Bodhisatva Ganguli, Sharma said that the connection which works all the time is inflation. "No government's ever won an election in India when inflation has been high," he said.

Citing his research, Sharma said that in India, there have been about 30 odd instances when a Chief Minister or a Prime Minister has delivered economic growth of 8 per cent or more during their term. The probability of them getting re-elected on the back of doing that is about 50 per cent, which means half of them lost.

Comparing the Modi-led BJP government to the UPA regime, Sharma said, that the focus of the current government has been on creating a balance and not going all out on welfare spending only.

"The problem under the UPA government, particularly the second UPA government, was that it was all about welfare without focusing on what's happening to economic growth, who's paying for it, and we ended up with these severe imbalances by 2012-2013, which the country had to deal with," he said.

"Under the Modi government, at least you've seen some correction in that imbalance, which is that they are still doing welfare spending, but it's not to the extent that was happening before. There's been more focus on building out infrastructure," said Sharma, chairman of Rockefeller Capital Management.

Inflation has also been kept relatively under control, said Sharma, as he went on to highlight the mistakes of the UPA government in the second term.

Sharma pointed that one of the biggest mistakes in the UPA II government was that they let inflation really get out of control. He said that the country is currently in a better shape and capitalism has been moving in the right direction, even though there's a lot more which can be done.

Talking about BJP's performance in the 2024 Lok Sabha polls despite Prime Minister Narendra Modi's massive popularity, Sharma said that it is very rare for leaders to remain popular after 10 years.

"I'd say generally the trend -- and this is not just about Modi -- is very difficult for leaders around the world to remain popular after 10 years. In fact, in democratically elected countries, you can almost not find any leader who after 10 years left office on a high or was popular," he said.