Lok Sabha Polls: Bernstein's advice to investors amid low voter turnout

Amid concerns over a low voter turnout during the ongoing Lok Sabha elections, foreign brokerage Bernstein points out that there are no obvious correlations between voting percentages and election outcomes based on past elections. In its latest India strategy report, Bernstein said that one should not read too much into the voter turnout numbers at this point.

“A large decline (over 5%) without much anti-incumbency should see them repeating figures of 2019 with minor up/down revisions. Only the case of a large vote share decline (over 5%) and significant anti-incumbency is where the elections become a market-defining event. The fact that the opposition is more united nationally this time should start having meaningful repercussions only at this stage”, said Bernstein

Bernstein on voter turnout

The firm also said that there will be a marginal rise in vote share for the opposition and a major loss to BJP is unlikely. It also said that the loss due to swing voters will likely be for NDA.

"Assuming a minor decline of 2.5% for overall voting and generously assuming INC captures 75% of the anti-incumbency, we still have the BJP’s vote share at 32.7% compared to that of INC at 22.2%. The vote percentage difference is only marginally behind the 2014 difference, still translating to a comfortable victory. Thus, even with anti-incumbency, a minor vote share decline does not translate to any election surprises. The opposition seats will go up given that we’re seeing a combined INDIA alliance, but a major loss to BJP seats is unlikely.”

Bernstein compared the voter turnout with ballot voting. Additionally the ballot paper impact is larger than what used to be in the past years, it said. It also predicted that there will not be any significant impact unless there is a steep decline in voter turnout or significant anti-incumbency.

"A lack of any connection with an issue on the ground or lack of connection with opposition, for instance, may discourage these swing voters from coming out and voting. This also gets one interesting result: there weren’t enough swing votes in favor of INC in 2019 (barely 0.5%). So, assuming the core voters will mostly turn up, the loss due to swing voters will likely be for NDA," Bernstein said

All the four phases of polling so far saw a dip in voter turnout with Phase 4 witnessing 67.3% voter turnout, which was lower than 69.6% in 2019 general elections

Also watch: Market will shoot up after June 4th, says Amit Shah; attributes volatility to rumours