Your Guide to India’s Upcoming General Election

(Bloomberg) -- Prime Minister Narendra Modi is riding a wave of nationalist passion as India’s general election gets under way. Not long ago, economic frustrations had eroded his popularity, including stubborn unemployment, an unpopular national sales tax and his government’s disastrous ban on most bank notes. Even the opposition, largely in disarray since Modi’s resounding victory in 2014, was beginning to unite. Then everything changed with a terrorist strike against Indian troops in February. Modi’s authorization of airstrikes against arch-foe Pakistan allowed his party to tap into public anger and shift the agenda from the economy. Now Modi’s ruling coalition looks likely to retain power, albeit with a lesser majority.

1. When exactly is the election?

Voting begun April 11 and takes place in seven phases through May 19, with the result announced May 23. The vote is spread over six weeks because of the daunting logistics of polling the world’s largest electorate: roughly 900 million voters stretching from the remote Himalayas in the north to the tropical jungles of the south.

2. Who is Modi up against?

The main national opposition is the Congress Party, which has ruled India for most of its independent history and is led by Rahul Gandhi, the scion of the Nehru-Gandhi dynasty. Polls suggest the 48-year-old Gandhi alone doesn’t present much of a threat, although his party’s performance in state elections in late 2018 buoyed his supporters. Congress has pursued alliances with other parties with the aim of creating a common platform to oppose Modi’s Bharatiya Janata Party, or BJP. However, bickering over seat-sharing arrangements has sapped those efforts.

3. Will Modi retain power?

India’s politics are difficult to predict, but Modi is still the favorite. The country’s $2.6 trillion economy is chugging along, his reputation as an incorruptible leader is largely intact (surviving a scandal over fighter jets) and his party has expanded its control over state governments since the last general election. There have been setbacks of late, including the loss of coalition partners and defeats in three high-profile provincial elections in December. Yet no other political leader is as popular as the 68-year-old Modi, who has nurtured an image as a humble son of a tea-seller single-mindedly dedicated to modernizing the country. Policy misfires have clouded the water, including Modi’s failure to deliver on promises to create 10 million jobs a year.

4. Is Modi’s party struggling?

Not exactly. Despite recent election losses, the BJP still controls 17 out of 29 states, including the most populous (Uttar Pradesh) and the richest (Maharashtra, whose capital Mumbai is India’s financial hub). Under Modi and BJP President Amit Shah, the party has made inroads beyond its traditional northern support base, amassed corporate donations, expanded a successful social media unit and deployed thousands of grassroots activists to shepherd voters to the polls. Modi is better organized, better funded and enjoys more widespread support than any single rival. And tensions with Pakistan have broadened the narrative from economic concerns.

5. How did tensions with Pakistan escalate?

Modi blamed India’s neighbor for a Feb. 14 terrorist attack in Kashmir that killed at least 40 security personnel, an incident that sparked widespread outrage among Indians. Pakistan denied responsibility, but India launched airstrikes on a terrorist camp on Pakistan’s side of the border, prompting an aerial dogfight that led to at least one fighter jet being shot down and the capture of an Indian pilot. (Exactly what happened remains disputed.) The nations teetered on the brink of war, but the pilot’s release by Pakistan appeared to ease tensions. Modi and his supporters trumpeted the clash in political rallies as evidence of his bold, decisive leadership. Opposition politicians labeled the use of air strikes as part of the BJP campaign as “shockingly disgraceful.” His campaign also looked for a boost from Modi’s declaration in March that India was now a space power, following a successful launch of an anti-satellite missile test.

6. What about social issues?

As Hindu nationalism has flourished under Modi, attacks against Muslims and so-called lower-caste Hindus have proliferated. In December, a mob protesting cow deaths killed a police officer in Uttar Pradesh. A Human Rights Watch report said 36 Muslims and eight others have been killed over the last three years by so-called ’cow vigilantes,’ who often receive support from law enforcement and Hindu nationalist politicians. Modi’s image has suffered because of the reaction by senior party members (one minister presented garlands to a lynch mob) and by his own slow responses. Social tensions are likely to remain high, or escalate, if the election is tight. All the same, Indian voters historically have been moved more by the price of onions and tomatoes than political shenanigans. (Economists expect inflation to slow this year and accelerate next year.)

7. Would a smaller majority matter?

Yes. The BJP won a single-party majority in the 543-seat lower house in 2014, the first such majority in 30 years. A reduced majority would probably imperil Modi’s economic reforms and strengthen his coalition partners’ leverage, making for unstable government. Congress is counting on any alliances it forms to take it within striking distance of forming a government. But history shows the BJP often surprises on the upside. If the party manages to win a similar or even greater majority, Modi could be emboldened to tackle controversial reforms.

8. What would a poor result for Modi mean for investors?

Markets would take a loss badly. In recent state elections, the prospect of BJP victories has rallied markets while predictions of defeat have sunk them. Investors see Modi as a relatively predictable pro-business leader dedicated to pushing through economic reforms -- even if those policies occasionally veer toward populist. Whether Modi is as pro-business as investors think is a matter of debate in India, with many arguing he’s more concerned about consolidating power than carrying out genuine reforms. On the other hand, the stock index has significantly outperformed most other emerging markets since 2014. And Modi has sought to address longstanding issues such as bad loans at banks and indebtedness at state-owned companies, while luring record foreign investment and pushing through badly needed tax reform.

The Reference Shelf

• QuickTakes on two important voter groups: lower castes and farmers.
• Modi vs who?
• Five key places to watch.
• A united and motivated opposition could win, writes Bloomberg Opinion’s Mihir Sharma.
• Why India and Pakistan distrust each other.
• Investors should worry about Modi’s response to setbacks, writes Bloomberg Opinion’s Andy Mukherjee.
• QuickTakes on Modi’s controversial fighter jet deal, India’s rescue plan for state banks, the cash ban, the country’s aspirations.
• Sexual violence forces Indian women out of the workplace.

To contact the reporter on this story: Iain Marlow in New Delhi at imarlow1@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Grant Clark

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