With his party, the Bharatiya Janata Party (BJP), losing its full majority in parliament in a fiercely contested election, Indian Prime Minister Narendra Modi is expected to take office on June 8 for a record-tying third term. Important friends have promised their support despite this loss, guaranteeing his leadership’s perpetuation.
Following a humiliating election outcome, Modi’s coalition, the National Democratic Alliance (NDA), is facing new difficulties. In the 543-member lower house, the BJP won 240 seats, but it was short of the 272 required for a majority. Greater dependence on regional allies would be necessary as a result of this, including the Janata Dal (United) [JD(U)] from Bihar and the Telugu Desam Party (TDP) from Andhra Pradesh, both of whom reiterated their support on Wednesday.
We are with the NDA, I will be attending the meeting in Delhi today,” stated Chandrababu Naidu, the TDP leader, signaling his continued alliance. Modi resigned on Wednesday, as is customary, tendering his resignation to President Droupadi Murmu, and paving the way for the swearing-in of his new cabinet on Saturday.
The NDA coalition’s overall win of 293 seats provides a slim but workable majority. However, this weakened position could slow India’s fiscal reforms, according to Moody’s. The support from pragmatist allies like the TDP and JD(U) will be crucial for maintaining policy continuity, particularly in economic reforms and welfare spending.
Despite the election result, Fitch Ratings anticipates that the government will maintain its focus on capital expenditure, ease of doing business measures, and gradual fiscal consolidation. However, with the BJP’s reduced majority, more contentious reforms, such as land and labor laws, may face significant hurdles.
The election revealed significant losses for the BJP in key states, notably Uttar Pradesh and Maharashtra. In Uttar Pradesh, the BJP’s seat count dropped from 62 to 33, while in Maharashtra, it fell from 23 to nine. Modi’s personal victory in Varanasi was also less commanding than in previous elections, with his margin of victory significantly reduced.
The opposition INDIA alliance, led by Rahul Gandhi’s Congress party, performed better than expected, securing 230 seats. Congress alone won 99 seats, nearly doubling its previous count and boosting Gandhi’s political standing. This alliance is set to meet in New Delhi to strategize their future actions.
Economic experts like Arvind Panagariya, chairman of a government finance panel, remain optimistic. In an editorial for the Economic Times, he argued that “necessary reforms are entirely feasible” despite the reduced majority. He emphasized that sustained economic growth could reinforce the government’s position in the long run.
Modi’s third term, marked by new political dynamics, promises to be a period of strategic adjustments and continued efforts to drive India’s growth amid a more complex parliamentary landscape.
Source: Modi set to take oath for the third time on June 8 as allies pledge support | Reuters
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