ECONOMYNEXT — The National Democratic Alliance (NDA) led by Prime Minister Narendra Modi’s Bharatiya Janatha Party (BJP) was in for a shock Tuesday June 04 afternoon as early results of India’s general election indicated a distinct possibility that the party would not secure an absolute majority.
The BJP is widely expected to lose a number of seats in the Lok Sabha, forcing it to reach out to smaller parties to form a coalition government.
Indian media had reported on Saturday June 01, citing exit polls, projected a comfortable win for the Hindu nationalist BJP and its allies over an opposition alliance led by Rahul Gandhi’s Congress party and the INDIA alliance it leads.
According to the New York Times, traders in Mumbai had also anticipated a comfortable win for Modi but, by the end of trading on Tuesday, the markets were down 6 percent, nearly wiping out the year’s gains.
“India’s stock market had been on a tear, buoyed by economic growth and confidence that Mr. Modi, the most powerful prime minister in generations, was sure to secure a third term in office. Investors looking to India yearn for political stability and many have done especially well during the first 10 years of Mr. Modi’s pro-business leadership. Even after Tuesday’s decline, the blue-chip Nifty 50 index has nearly tripled since Mr. Modi became prime minister,” the NYT reported.
According to the BBC, analysts attribute Tuesday’s stunning result to rising prices, joblessness, a controversial army recruitment reform and Modi’s aggressive and divisive campaign, which may have alienated voters in parts of the country.
“Modi’s ambitious slogan “Ab ki baar, 400 paar,” aiming for over 400 seats for his NDA alliance, may also have backfired, raising fears of constitutional changes with such a massive majority. The unexpected resurgence of the Congress party, nearly doubling its 2019 tally and leading in at least 97 seats, underscores this shift,” the BBC reported. (Colombo/Jun04/2024)