Yahoo Finance Modi Vows to Retain Power Even as Party Loses India Majority
(Bloomberg) -- Narendra Modi vowed to continue as India’s prime minister even after his party lost its majority in parliament, forcing him to rely on allies to form a government for the first time since he stormed to power a decade ago.
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A coalition led by Modi’s Bharatiya Janata Party secured enough seats to form a government if it sticks together, although the party remained short of the 272-seat majority on its own. The BJP-led National Democratic Alliance was on course to win 293 seats, while the opposition bloc, known as the Indian National Developmental Inclusive Alliance, was on track to win 229 seats, the results showed.
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Modi claimed victory for his coalition in a post on X, calling it a “historical feat” and vowing to “move forward with new energy, new enthusiasm and new resolve.”
“Today is auspicious,” Modi told cheering supporters at his party’s headquarters later on Tuesday night. “It is confirmed that NDA has won a mandate to form the government for a third straight term. We are very, very grateful to the people who have reposed full faith in the BJP and NDA.”
India’s stocks had their worst day in more than four years, as it became clear the election outcome would be much closer than expected. Markets had hit a record high on Monday after exit polls released over the weekend showed Modi would coast to an easy victory in the marathon, six-week election. Before voting kicked off on April 19, the prime minister had boldly predicted that his alliance would win a whopping 400 seats.
“This is not an election — it is a kind of political earthquake,” said Niranjan Sahoo, senior fellow with the New Delhi-based Observer Research Foundation who has written several books on Indian politics. “Even if Modi becomes the prime minister, his position will be diminished to a great extent. He will not be the same Modi.”
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Modi now needs to secure the support of two key members of his broader National Democratic Alliance who control some 30 seats — enough to flip the balance of power in parliament. Leaders of those two parties have a history of switching sides, and only joined up with Modi a few months ago, making it unclear whether they will stick with him or back the opposition bloc. A spokesperson of the allies, the Telugu Desam Party in the southern state of Andhra Pradesh, affirmed support for Modi’s coalition.
More than 20 opposition parties, spearheaded by Rahul Gandhi, formed a united front in a bid to stop Modi’s once-dominant electoral machine. A mixture of regional and caste-based groups, the alliance focused on appealing to voters who felt left out of India’s growth story, which has been marked by growing inequality, pervasive joblessness and rising living costs.
After the results became clear, Gandhi said the election showed that voters don’t want Modi to run the country. The opposition alliance would meet on Wednesday to discuss next steps, he added.
“We do not like the way they have run this country for the last 10 years,” Gandhi told reporters on Tuesday. “That is a huge message to Mr. Narendra Modi.”
The result is a stunning disappointment for the 73-year-old leader, who has been the main face of the BJP’s election campaign and built the party primarily around himself. Besides raising questions about Modi’s own future as prime minister, a weak coalition government will likely make it difficult for him to push through tough economic reforms or further his Hindu nationalist agenda assuming he returns to power.
The lackluster performance marks the first major setback at national polls for Modi. He had looked unbeatable heading into the election, backed by one of the world’s fastest-growing economies and the fulfillment of key promises appealing to India’s Hindu majority, including the building of a temple on the site where a 500-year-old mosque had been torn down.
Signs of trouble for Modi emerged after the first of seven rounds of voting. A dip in turnout triggered a broad get-out-the-vote effort that saw Modi adopt a more strident tone, firing up his Hindu nationalist base with divisive anti-Muslim rhetoric and attacks on the opposition’s welfare policies.
Modi had appealed to India’s 1.4 billion people with a combination of business-friendly policies, welfare measures for the poor and Hindu nationalist policies. He had pledged more of the same in his third term, vowing measures to create jobs while also replacing India’s religion-based marriage and inheritance laws with a uniform civil code — a measure that Muslims, Christians and other minorities oppose because it would prevent them from adhering to some faith-based laws.
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Those more contentious proposals may now be off the table. The results also call into question whether Modi would have the political capital to implement contentious changes to land and labor laws, as well as a slew of other reform measures needed to achieve his goal of turning India into a developed nation by mid-century.
Even with a reduced mandate or a change in government, India’s growth trajectory should largely remain positive. Business leaders from Elon Musk to Jamie Dimon have hailed India’s potential as an alternative to China, with some economists projecting that the nation’s $3.5 trillion economy can become the largest contributor to global growth within the next five years.
“As far as economic policy is concerned, fiscal backsliding I think is a risk,” said Shumita Sharma Deveshwar, senior director of India Research at Global Data.TS Lombard. “Apart from that I actually don’t see much of a change in terms of reform policies. Even with a strong majority, Modi was unable to implement much of the so-called big bang reforms.”
--With assistance from Debjit Chakraborty, Akriti Sharma, Shruti Srivastava, Menaka Doshi, Rakesh Sharma and Preeti Soni.
(Updates with latest election result in second paragraph.)
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