Modi’s Party Wins Key State Polls, Boosting Bid for Third Term

Eltaf Najafizada and Swati Gupta
·4 min read
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(Bloomberg) -- India’s ruling Bharatiya Janata Party won three crucial state elections and unseated the opposition in two of them, strengthening Prime Minister Narendra Modi’s bid for a third term in office.

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The BJP retained power in Madhya Pradesh, a central state with 56 million voters, and wrested control of the state legislatures from its rival, the Indian National Congress, in both Rajasthan and Chhattisgarh. The results from the Election Commission of India on Sunday exceeded exit polls’ predictions for Modi’s party.

The Congress party was able to flip the southern Indian state of Telangana, where a regional party which had held power for two consecutive terms conceded defeat.

The outcome stands to buoy Modi and his ruling party ahead of the general elections next year, while raising questions about the opposition’s strategy to end his 10-year rule. The Congress party under Rahul Gandhi had tried to highlight issues like joblessness and caste discrimination in the hope it would resonate nationally in a few months.

“Prime Minister Modi remains exceptionally popular,” said Shumita Deveshwar, chief India economist at GlobalData.TS Lombard. The state polls show “the mood of the nation lies in bringing him back to power for a third consecutive term,” she said.

A weaker performance by the BJP may have provided the opposition with some momentum, “but the outcome now signals that Modi’s return to power is inevitable,” Deveshwar said.

The results may give a boost to financial markets on Monday, with investors betting that another term for Modi means policy continuity. Jefferies LLC said in October that India’s stock market could drop 25% if the BJP faces a surprise defeat.

“In the whole world, the echo of these election results will be heard,” Modi said while addressing party workers at the BJP headquarters in New Delhi Sunday evening. “These results will strengthen the world’s faith in India’s development, these results will give new faith to the world’s investors.”

While the BJP has already won a majority of the seats in the three states and Congress in one, the final tally could be higher once the Election Commission finalizes the results. Counting in the small northeastern state of Mizoram, where regional parties dominate, will be done on Monday.

Sunday’s results show that Modi’s popularity in the populous Hindi-speaking states predominantly in the north remains intact. The Congress, meanwhile, made further in-roads in southern India with a second successive win in seven months, after it won the state of Karnataka earlier this year.

BJP leaders hailed the party’s performance, especially in the key state of Madhya Pradesh.

“We had complete hope and faith,” Ashwini Vaishnaw, a cabinet minister and senior BJP leader, told reporters on Sunday. “Everyone knows that Modi is in the heart of Madhya Pradesh and Madhya Pradesh is in Modi’s heart.”

The Congress party will now need to regroup with other opposition groups to figure out how to fight Modi in the upcoming national elections. Opposition parties had pledged to form an alliance to unseat the BJP by setting aside their differences and projecting a united front.

Rahul Gandhi, leader of the Congress party, has positioned himself as Modi’s main challenger, but apart from the wins in two southern states, his party has struggled to peel voters away from the BJP.

Modi and the BJP’s election plank going into next year will likely center around consolidating the country’s vast Hindu vote, and to highlight popular welfare and development policies that have been championed by the party. India is the fastest growing major economy in the world, and the BJP has sought to cast Modi as a globally important leader who has raised India’s international stature, an approach that plays well with the party’s Hindu nationalist base.

“The BJP’s policies are a mix of efficient policy implementation that helps in consolidation of votes” amid a backdrop of Hindu nationalism, GlobalData.TS Lombard’s Deveshwar said. She pointed to popular policies such as a cash handout scheme for women in Madhya Pradesh.

“This helps overcome factors such as inflation, sluggish job creation and anti-incumbency that would otherwise have hurt the BJP in a state such as Madhya Pradesh,” and has likely hurt the Congress party in the other Hindi heartland states of Rajasthan and Chhattisgarh, she said.

--With assistance from Dan Strumpf, Debjit Chakraborty and Devidutta Tripathy.

(Updates with additional details)

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