Political Earthquake.
A new chapter.
1. Update: Modi to be sworn in for new term as PM on June 8.
2. LeMonde:
The earth shook in New Delhi on Tuesday, June 4, under the feet of Narendra Modi. The strong man of India, who has ruled unchallenged for ten years, controlling almost all of the country's institutions, finds himself having to negotiate fiercely with regional leaders to stay in power. His party, the powerful Bharatiya Janata Party (BJP), certainly came first in the eighteenth Indian general elections, but, for the first time since 2014, it did not obtain a majority on its own.
The opposition, united around the Congress Party, made a remarkable comeback, obtaining 234 seats, and could convince two key men to join it and thus reverse the balance of power. Such a scenario is not the most likely, but it is not completely excluded either.
These two kingmakers are regional leaders, political veterans who hold around thirty seats in their hands. They had changed their alliance during these legislative elections. Poached by the BJP, they had joined Narendra Modi. Without them, the ruling party would have been defeated.
Could this recent betrayal prove fragile? Nitish Kumar, the leader of the state of Bihar, and Chandrababu Naidu, of Andhra Pradesh, should, in fact, choose which side offers the highest bid. The Congress Party, which has come a long way, perhaps has no interest in playing this game. The coalitions will be unstable. The old independence movement was due to discuss (sic) with its allies on Wednesday June 5.
Despite the uncertainties and his mediocre performance, Mr. Modi proclaimed his victory, “a historic feat”, saluting the “immense confidence” of voters. In front of his supporters gathered at the BJP headquarters in New Delhi, he promised, for the years to come, “a new chapter and big decisions.” (Source: lemonde.fr)
3. The Economist (lengthy excerpt):
The electoral surprise follows a deeply divisive campaign. From the start, opposition politicians and other critics had bemoaned the lack of a level playing field in the election. Opposition politicians were jailed on corruption charges that they called politically motivated. Congress, the main opposition party, said its bank accounts were frozen, hindering campaigning. Meanwhile Mr Modi used at times stridently anti-Muslim campaign rhetoric. All of this may have been motivated by worries about diminishing support for the BJP.
The biggest upset turned out to be the giant northern state of Uttar Pradesh (UP) in the BJP’s Hindi-speaking heartland. In 2019 the BJP won 62 of the state’s 80 seats. This time that tally fell to 33, with a vote swing of 9% away from the BJP and its allies. Thirty-seven seats went to the left-wing Samajwadi Party, which is a member of the opposition alliance and focused on the rights of lower-caste groups and religious minorities. The constituencies lost by the BJP include Faizabad, home to the city of Ayodhya, where Mr Modi inaugurated a large new Hindu temple in January. The temple occupies the spot where a mob of Hindu nationalists demolished an ancient mosque in 1992.
The BJP also suffered large losses in Rajasthan and in Maharashtra, a rich industrial state in the west that is home to Mumbai, India’s business capital. The seats it lost there mostly went to Congress, which nearly doubled its national seat count to 99, compared with 52 in 2019.
What went wrong for the BJP? Its overall vote share across India stayed more or less the same as in 2019, at around 37%. The party also managed to make some small gains in the south and east, where it had not previously been able to make inroads. Yet its losses in critical areas like UP mean that its power in parliament is set to plummet. A sense that the economy is not delivering for ordinary people may have been a big factor: despite strong growth figures, voters cited inflation and unemployment as concerns. The upsets in UP and Rajasthan may reflect worries among members of lower castes that the BJP might roll back affirmative-action policies. The opposition had tapped into such fears, emphasizing Mr Modi’s closeness to oligarchs and claiming that the BJP might remove constitutional protections for lower-caste groups and religious minorities. Critically the prime minister’s once all-powerful personal appeal has dimmed and has been unable to make up for these concerns.
For India three big questions now loom. First, can the BJP form a stable government? The answer is, probably. The BJP will still be by far the biggest party in parliament, with more than twice as many seats as Congress. Unless there is a major rebellion within the party, Mr Modi is likely to be able to continue as prime minister. He will have to strike deals with two of his alliance partners, Telugu Desam and Janata Dal (United), two regional parties from the southern state of Andhra Pradesh and the eastern state of Bihar, respectively. Their leaders, Chandrababu Naidu and Nitish Kumar, will now emerge as kingmakers and attempt to extract favors from the BJP on appointments, benefits for their states and policy. Both are already being courted by the opposition alliance. Mr Kumar, in particular, is notorious for switching sides, presenting a particular risk. Yet given the BJP’s deep pockets, Mr Modi may also be able to entice parties away from the opposition to shore up his alliance. (Source: economist.com, italics mine)
4. The vote in key states:
(Source: bloomberg.com)
5. What went wrong for Modi and the BJP?
The BJP’s campaign relied heavily on the fulfillment of Hindu-nationalist pledges and on Modi’s personal brand. It failed to (gain) enough traction among voters worried that the economy — while among the world’s fastest-growing — isn’t delivering benefits evenly to all. Issues such as high unemployment, especially among the youth, and the rising cost of living, weighed heavily on voters going into the election, according to polls. A newly energized opposition hammered on these bread-and-butter issues to the detriment of the ruling party. Meanwhile, some analysts said the BJP’s overly ambitious election target of 400 seats with its allies likely backfired, prompting some supporters not to bother turning out, and raising fears the ruling party would use its super majority to reduce affirmative action policies for some minority groups. Despite Modi campaigning heavily in the southern states, the BJP also failed to make inroads there, with the party’s pro-Hindu message failing to gain traction. (Source: bloomberg.com)
6. What does it mean for public policy?
Should the final tally align with early vote counting, the BJP-led government will likely maintain broad domestic economic policy continuity by prioritizing manufacturing, infrastructure projects and job creation in the coming years. Broad agreement between the BJP and its key coalition partners Janata Dal (United) and Shiv Sena will likely enable Modi to focus the government's domestic policies on long-standing priorities like enhancing manufacturing, infrastructure development and job creation. The BJP may support manufacturing specifically by expanding infrastructure and broadening financial incentives for foreign firms to set up local production in industries such as textiles, leather and engineering goods. Modi will also likely implement a variety of protectionist measures like tariffs and export restrictions, as his administration has done in the past. He will also prioritize reducing India's reliance on imports from China and on positioning India as an attractive destination for tech companies shifting their operations from China, which will drive further production-linked incentives, especially in the tech sector. NDA coalition partners' alignment with the BJP on how to resolve major economic challenges like unemployment and food inflation suggests broad policy continuity on key economic policies as well. (Source: worldview.stratfor.com)
7. What does this mean for the rest of the world?
Under Modi, India’s profile on the world stage has grown significantly, helped by its robust 8%-plus rate of economic growth and a young and growing population that makes it a draw for foreign businesses. Modi has sought to cultivate a deeper partnership with the US, which sees India as a critical counterweight to China, while also maintaining strategic independence that has seen it refuse to join the West in condemning Russia over its invasion of Ukraine or shun its oil exports. Analysts don’t see those positions likely changing anytime soon. The same goes for Modi’s ambitions to make India a global manufacturing hub and continue luring foreign investors on the hunt for the next growth story as China’s economy slows. (Source: bloomberg.com)