by Tony
April 8th, 2014

As India goes to the polls this spring to elect a new government, a new era seems to have begun in the nation’s electoral process, driven by demographic changes and the emergence of a politically-aware middle-class. The upcoming election could create fresh opportunities for India, and reshape the rules for access to a vibrant market of demanding consumers.

Since 1992, when India started its liberalisation process, the Indian economy has grown at approximately 8% annually, even overtaking Japan to become the world’s third largest economy by purchasing power parity in 2011. Since then, however, India has slowed significantly. The 2012-13 financial year saw the GDP growth rate fall below 5% – the lowest in a decade; the fiscal deficit widened and the rupee plummeted for much of the second half of 2013. Foreign investments were down to a trickle, inflation had spiralled and major infrastructure projects had been put on hold. Companies, like Walmart, scaled down their India investments, while others like Etisalat and Batelco exited the market.

During this period, there were also various reports of corporate scams in sectors such as telecom, coal and mining. All this exacerbated the general sense of disenchantment among Indians, and the Congress-led United Progressive Alliance coalition government, in its second term at the helm, faced mass protests against corruption.

A NEW ORDER?

The entire country is now looking forward to the 15th general elections to usher in a new government that would boost economic revival, create new jobs, improve the healthcare and education sectors and address the large infrastructural gaps. Exactly who will be tasked with this challenge will be shaped in part by three key factors:

Power to young India. According to the Election Commission of India, there are approximately 150 million ‘first-time voters’ in the 2014 elections. That’s 20 per cent of the total electorate! These voters are young people in urban and rural India born in the post-liberalised era. They are educated, relatively more exposed to global trends, and have their own set ideas on what they want from the political system. This group is expected to play a large role in influencing this year’s election results.

India’s first digital national elections. Social media engagement is expected to have a direct influence on up to 30 per cent of the seats in the Indian parliament. These seats are mostly in urban areas where constituents are a mix of youth and professionals. All major parties have set up dedicated social media teams, and are using Facebook and Twitter as key channels of influence.

“Clean” finds a new currency. The past year has seen the emergence of a new brand of politics. Unlike traditional parties, which formed largely out of a combination of caste, religion and language, the Aam Admi Party (Common People’s Party) grew out of India’s anti-corruption street protests, and within a year of its formation, rose to power in the capital New Delhi. While it’s not expected to be a major contender in this year’s elections, the Aam Admi Party is already driving visible changes in the agenda. Major parties have begun emulating Aam Admi Party initiatives, such as focusing on candidates with upstanding character, seeking voter opinions when drafting election manifestos, identifying issues impacting the common people, and eschewing an ostentatious public life.

WHAT WE CAN EXPECT

The 2014 election will be a vote for change. Irrespective of the alliances formed to build the next government, jump starting economic growth will be top priority. In this environment, corporations need to keep a ear to the ground and closely monitor the developments and their implications on business-related policy. The new progressive entrants into Indian politics should be observed closely, to evaluate how this will contribute to the new agenda.

As a new government takes charge, communication and engagement strategies might need to be re-evaluated, and there will be a clear need for organisations to have a greater focus on fundamentals and longer term commitment, while being sensitive to the country’s demands.

Atul Ahluwalia is managing director, India, at Weber Shandwick

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