In 1948, Claude Shannon, the father of information theory, built upon the work of Ralph Hartley and presented to the world the Shannon-Hartley theorem. The theorem illuminated the signal-to-noise ratio—the power of the desired signal and the level of undesired background noise. The math riveting the theorem helped enhance telecommunications.
There is, as yet, no formula to sift and decode signal from noise in the political economy. And the effect is vividly manifest in large democracies. Public discourse—on politics and the state of the economy—is haunted by contextual interpretations of signal and noise. Indeed, the phenomenon is vividly manifest globally as #Elections2024 plays out.
Consider the interplay of noise and signal in the context of the ongoing elections. The transition in the narrative from no questions to doubts is stark. A hundred days back, the cognoscenti had virtually called the elections. The opinion polls conducted between December and April placed the BJP-led NDA’s tally between 306 and 411 seats. It was deemed a no-contest. Cut to the sixth phase of polling held on Saturday, and the conversations are about hits and misses.
The debate last week was about the quantum of losses the BJP-led alliance may incur from the peak of 2019—in Maharashtra, Bihar, Karnataka, Rajasthan, Gujarat and Madhya Pradesh. This week, there are questions on potential gains from Odisha and Bengal—triggered by renewed campaigning by Naveen Patnaik and an aggressive campaign by Mamata Banerjee following the Calcutta High Court verdict on the inclusion of Muslims in OBC reservations in Bengal. Add the murmurs about perceived setbacks in Uttar Pradesh, Haryana and Delhi. An interesting entrant in the hot debate is the outcome in Andhra Pradesh, which is deemed the new black box in this election.
There is a renewed interest in the accuracy of exit polls and hyperventilation about fake exit polls in circulation. The believers cite 2014 and 2019, while the doubters cite 2004. The 2004 exit polls predicted between 230 and 275 seats for the NDA, whereas in the final results the alliance lost out to the UPA.
In conversations at morning walks, living rooms and companies, virtual Excel sheets—delineating possible outcomes for parties across states—are created and distributed. The base template of much of the speculation is a Molotov cocktail of information and opinion, rumours and memes available on social media. Noise or signal is based on the experiential and the anecdotal, and is entirely interpretative.
Any and every piece of information is fair weapon in the polarised discourse of believers and doubters. Last week, Yogendra Yadav, formerly of the Centre for the Study of Developing Societies and now a part of the INDI Alliance, predicted that BJP won’t win a majority. This week, Prashant Kishor, member of the BJP’s 2014 team, surfaced with a 300-plus seats prediction. Mind you, neither has claimed to have conducted a survey.
To paraphrase Harold Macmillan, events and utterances in the heat and dust of campaign are fuelling the rise and fall of puts and calls in the stock markets. Typically, the identity of every sell or buy in markets assumes significance. The fact that foreign institutional investors sold over Rs 27,000 crore worth of stocks has assumed both economic and political connotations. Speculation about the outcome of elections has roiled markets. Following predictions and assurances by the finance minister, home minister and prime minister, indices have yo-yoed from pessimism to record highs, with total value of Indian stocks touching $5 trillion.
Perceptions matter in any electoral battle and scepticism has haunted reports on the well-being of Indians. The 2024 elections is verily a contest of who did better for the poor. The Congress claims it unveiled rights, the BJP has repeatedly cited the January 2024 report by Niti Aayog which stated that 248 million people have been lifted out of multi-dimensional poverty since 2013-14. The study put the poverty headcount ratio at 11.28 percent.
The opposition countered the claim, asking for the rationale of free rations to 817 million people. In February 2024, an SBI report cited data from the NSSO’s Household Consumption Expenditure Survey and argued that headline poverty in India is likely at 4.5-5 percent, which is lower than the levels in many advanced economies. The report met with much scepticism and trolling.
Such is the noise level that even established practices acquire new countenance. Last Monday, a segment of the WhatsApp universe agitated about the transfer of funds by the RBI to the government. Two days later, the RBI announced it was transferring “Rs 2,10,874 crore as surplus to the government for the accounting year 2023-24”. The timing of the announcement acquired a political countenance. Lost in the noise was the fact that this is an annual exercise formalised following the recommendation of the Jalan Committee in 2019.
The din of high-decibel rhetoric tends to drown out facts with political fiction. This is not unique to India. The US GDP has defied predictions; its stock indices are at historic highs and unemployment at a historic low. Yet, a Guardian/Harris poll published this week shows that three in five Americans think the US economy is in recession, and 49 percent believe the S&P 500 is down and unemployment at a 50-year high.
The challenge in the oldest and the largest democracy is similar. That, though, is not a consolation, but a cautionary tale for politicos. Evidently, the narrative depends on the quality of communication.
Shankkar Aiyar
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)
