Mumbai: Although Narendra Modi continues to remain the most popular leader in the country, his approval ratings seem to be on a decline as anti-incumbency grows. That’s the key message from successive rounds of “Mood of the Nation" surveys —large-scale, nationally representative surveys conducted by Lokniti-CSDS since mid-2017.

The latest poll conducted in May 2018 showed that if snap Lok Sabha elections were to be held today, only 34% of people would prefer Narendra Modi to return as Prime Minister, down from 37% in January and 44% a year ago. The proportion of people choosing Rahul Gandhi as their preferred Prime Minister has risen 15 percentage points over the past year to 24%, the survey data shows.

One of the key reasons behind Modi’s declining approval ratings appears to be rising discontent with the economic performance of the Modi government. A majority of people now believe that the government has failed to deliver on its election promise of “achhe din" or better days.

The growing disenchantment with the government seems to be linked to a decline in consumer sentiment witnessed over the past couple of years. Data from consumer confidence surveys conducted by the Reserve Bank of India (RBI) show that consumer sentiments have been on the decline since 2016. RBI consumer sentiment survey is based exclusively on an urban sample of 5,000 respondents, and hence fails to capture the sentiments in rural India.

But data from other surveys, such as the CMIE-BSE, which capture a larger sample in both rural and urban India, also point to the same trend.

Disaggregated data on consumer sentiments published recently by RBI shows that the rich and the poor differ widely in their assessment of their economic conditions as well as in their expectations about the future.

Poorer respondents were less likely to report any improvement in their household income or employment scenario compared to richer respondents. They also remain more pessimistic about future prospects.

The old and the retired also reported lower improvement in their household income, and were more pessimistic than others, the RBI survey data shows.

It is worth noting that both these groups —the poor and the elderly —are far more disenchanted with the government as compared to others, according to the latest Lokniti-CSDS survey.

This disenchantment might have risen after demonetization, as the bold move by government failed to live up to the initial hype. The time-series data shows that there was a sharp spike in sentiment about the economy in the immediate aftermath of demonetization in November 2016.

But there has been a sharper decline since then, with sentiment about the economy dipping below pre-demonetization levels. It is likely that people revised their expectations as the evidence on demonetisation’s failures began trickling in.

While sentiment picked up briefly in December 2017, this appears to have been a blip. The March survey again shows a decline in perceptions about the state of the economy.

The subdued sentiments do not bode well for a government that is nearing the finishing line. And reviving sentiments won’t be easy at a time when the risks to the macroeconomic stability are growing.

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