Investors’ wealth jumped Rs 12.48 lakh crore in morning trade on June 3, 2024, after exit polls predicted a massive win for the Bharatiya Janata Party-led National Democratic Alliance in the Lok Sabha polls with the projections being anywhere from 355 to 400-paar, with India’s equity benchmarks gaining more than 3%.
However, once the actual results came out on June 4, BSE Sensex tanked by 5.74% and Nifty50 tanked by 5.93%, leading to nearly Rs. 30 lakh crore losses for investors.
This, in and of itself, would not have been of much concern because exit polls are not necessarily reliable. But, the statements made by two key people at the helm of the Indian government – Prime Minister Narendra Modi and Union home minister Amit Shah – along with the exit polls and market fluctuations, raise serious questions about the potential manipulation of the stock market. The fact that both Modi and Shah made predictions about the stock market, which were followed by a sharp rise and subsequent crash, suggests that there may be a link between these events.
Additionally, the fact that the exit polls were broadcast three days before counting day and the market responded sharply to the predictions, further supports the possibility of manipulation. This has led to Rahul Gandhi asking for a Joint Parliamentary Committee (JPC) probe into the matter and the Trinamool Congress’s Saket Gokhale asking for an investigation by SEBI.
In separate interviews with a business channel owned by the Adani Group, Modi and Shah made predictions about the stock market. Modi claimed that the market will be so high that the “programmers will get tired.” He said the markets will benefit for a week after the results come on June 4. Shah, meanwhile, made a more direct remark: “Buy stocks before June 4, it will shoot up.” These statements were seen as unusual and potentially manipulative, as they were made by high-ranking government officials and were followed by a sharp rise in the stock market after the exit polls were released. This also calls into question why the Election Commission did not take note of it and warn them.
There have been several credible speculations and allegations raised by knowledgeable intellectuals and political analysts regarding this controversy and the potential scam involving market manipulation. These allegations add weight to the suspicions and highlight the need for a thorough investigation.
One prominent voice has been that of Yogendra Yadav, a renowned psephologist and political analyst. In an interview with India Today, Yadav expressed his concerns about the exit poll agencies’ lack of transparency and potential conflicts of interest. He said that these agencies do not disclose their methodologies, their sampling techniques, or even the identities of their key personnel. He opined that there is a clear conflict of interest as most of these agencies are either owned by or have close ties with major media houses, which have their own political leanings. Yadav also questioned the accuracy of the exit polls, suggesting that the agencies may have overestimated the BJP’s performance due to fear of backlash and so may have deliberately inflated the BJP’s numbers to align with the narrative being pushed by the party leadership.
Also read: Lies, Damned Lies and Piyush Goyal’s Defence of What Transpired in the Stock Market
Amrit Kumar Debnath, a business analyst, has written a comprehensive analysis on LinkedIn about the 2024 Lok Sabha election exit poll controversy. He suggests that the exit polls may have led to a stock market rally and subsequent crash, hinting at potential market manipulation. He wrote, “Major polling agencies and news channels, including Axis MyIndia and India Today, predicted an overwhelming victory for the BJP-NDA. These predictions appeared consistent across various platforms, suggesting a coordinated narrative rather than independent analysis.”
If the allegations of a scam or market manipulation are substantiated, the beneficiaries could potentially include:
- Individuals or entities with insider knowledge of the exit poll results or the BJP leadership’s statements, who may have engaged in illegal trading activities to profit from the market fluctuations.
- The exit poll agencies themselves, if they deliberately skewed the results to align with the BJP’s interests, potentially for financial gain or to maintain favourable relationships with the ruling party.
- Individuals or entities within the BJP leadership or their associates, who may have used their influence or access to privileged information for personal or political gain.
If the exit polls were indeed manipulated, the potential consequences could be severe and far-reaching. Here are some possible outcomes:
Loss of public confidence
Manipulated exit polls could lead to a significant erosion of public confidence in the integrity of the electoral process. This could result in a decline in voter turnout and a loss of faith in the democratic system.
Market manipulation
The manipulation of exit polls could have been used to manipulate the stock market, as seen in the sharp rally and subsequent crash. This could lead to significant financial losses for investors and undermine the stability of the financial system.
Investigation and legal action
The manipulation of exit polls could lead to legal action and investigations by regulatory bodies such as the Election Commission of India and the Securities and Exchange Board of India (SEBI). This could result in fines, penalties, and even criminal charges for those involved.
Damage to political parties
The manipulation of exit polls could damage the reputation of political parties involved, particularly the BJP, which was the primary beneficiary of the manipulated polls. This could lead to a loss of public support and a decline in their political fortunes.
Impact on future elections
The manipulation of exit polls could set a dangerous precedent for future elections, potentially leading to further manipulation and undermining the integrity of the electoral process. This could have long-term consequences for the health of Indian democracy.
Financial losses
The manipulation of exit polls could have led to significant financial losses for investors who made decisions based on the manipulated polls. This could result in a loss of trust in the financial system and a decline in investment in the Indian economy.
Impact on international relations
The manipulation of exit polls could have implications for India’s international relations, particularly if it is seen as a violation of democratic norms and principles. This could lead to diplomatic tensions and a decline in India’s global reputation.
It is crucial to conduct a thorough and impartial investigation into these events to uphold the integrity of the electoral process and maintain public confidence in the democratic system. Potential conflicts of interest, insider trading, market manipulation, and any other unethical or illegal activities must be identified and addressed with appropriate legal action.
Furthermore, measures should be implemented to ensure the transparency and credibility of future exit polls, including rigorous methodological scrutiny, disclosure of potential conflicts of interest, and independent verification processes. The media also bears responsibility in critically analysing and verifying such information before disseminating it to the public.
The 2024 Lok Sabha elections witnessed a record-breaking voter turnout, demonstrating the strength of India’s democracy. However, the allegations surrounding the exit polls, market fluctuations, and the statements made by the BJP leadership cast a shadow on this democratic process. A thorough investigation and implementation of robust safeguards are essential to protect the integrity of future elections and uphold the principles of transparency, fairness, and accountability.
Sushiila Ttiwari and Dr D. Samarender Reddy head a business solutions website.
