Slowing Economy Dents Modi’s Margin in Crucial State Polls
Narendra Modi, India’s prime minister, speaks during the Bloomberg Global Business Forum in New York, U.S. (Photographer: Bess Adler/Bloomberg)

Slowing Economy Dents Modi’s Margin in Crucial State Polls

(Bloomberg) -- Prime Minister Narendra Modi’s Bharatiya Janata Party fought a tougher-than-expected battle to retain power in two crucial states just months after his landslide election victory, as voter discontent rises over India’s slowing economic growth.

In his first electoral test since sweeping to a second term in office in May, Modi’s BJP fell short of a majority in the 90 seat assembly in the northern state of Haryana and will have to cobble together an alliance with smaller local parties. It also suffered a setback in India’s richest state of Maharashtra, although it is still expected to form government in both states. The ruling party experienced its greatest losses in drought-stricken farming districts, indicating the deepening economic slowdown is eating away at its popularity. Modi’s party had been expected to sweep to victory in both the assembly polls.

In Maharashtra the BJP won a total 105 seats in the 288 seat Assembly, lower than 122 seats in 2014. It won 40 of 90 seats in Haryana, six short of the halfway mark needed to form a government, according to the Election Commission of India website and also short of the 47 seats it held in the state in the last polls. BJP will have to rely on 10 elected members of the Jannayak Janta Party or draw independent candidates to its side in order to form its next government in Haryana. Exit polls had predicted a win for BJP in both the states where voting took place on Oct. 21.

Losing Faith

The polls were fought against the backdrop of the slowest economic growth in six years and the highest unemployment in more than four decades.

“The big message that voters have conveyed is they may have faith in Modi to deliver but they don’t want to be taken for granted,” said Rahul Verma, research fellow at New Delhi-based Centre for Policy Research. “This verdict was against the BJP -- people are unhappy with the ruling BJP governments in the states and also with Modi’s handling of the economic situation.“

The vote follows the Modi government’s move to scrap seven decades of autonomy in India’s only Muslim-majority state Jammu and Kashmir, and the creation of a citizen’s registry in the northeastern state of Assam, which threatens to leave about 1.9 million people at risk for statelessness. Both the federal government decisions were part of campaign messaging in the states.

The main opposition Congress party fared better than expected in both states. In Maharashtra, the Congress and its pre-poll alliance partner the Nationalist Congress Party headed by former Indian farm minister Sharad Pawar won 98 seats against the incumbent BJP-led coalition. In Haryana, the Congress had won 31 seats, more than double the 15 it won in the 2014 assembly elections.

©2019 Bloomberg L.P.

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