How do elections affect the economy

-Presented by

Nabarun Paul

(MBA, Section A)

• The economy typically slows down ahead of elections.

• The slowdown in investment and economic activity.

• Government spending went up in an average election year.

Effects of election

• The consumption of steel

• New project additions dry up in an election.

• The pace of industrial credit growth decelerates.

• The average increase in nominal government spending during election years is 15.84% compared with 11.38% for non-election years.

• In election years, more loans are made to districts in which the ruling state party had a narrow margin of victory in the previous election.

• The average inflation during election years is 8.56% since 1980, compared with 7.55% for non-election years.

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