snapshots

India: Ruling Party Suffers Setbacks in State Elections

4 MINS READDec 11, 2018 | 22:06 GMT
The Big Picture

As parliamentary elections approach in April 2019, Prime Minister Narendra Modi and his ruling Bharatiya Janata Party (BJP) are preparing to face a resurging Indian National Congress (INC) that has become emboldened by strong performances in state elections. If the INC can deny the BJP a continued majority and usher in a return to coalition governance, that could further hinder the land and labor reforms needed to forward India's lagging industrialization efforts.

What Happened

The results of five Indian state elections indicate challenges for the ruling Bharatiya Janata Party (BJP) as it seeks to hold on to its majority in Parliament through national elections in 2019. In Rajasthan, a tradition of anti-incumbency helped propel the opposition Indian National Congress (INC) to victory over the BJP-led state government. Meanwhile, in Chhattisgarh, the INC ended 15 years of BJP rule. And while the results in Madhya Pradesh are currently too close to call, the latest figures show the INC taking 55 seats from the BJP's previously 165-seat bloc after capitalizing on the grievances of the state's nearly 10 million farmers. These three states are part of the so-called Hindi heartland, a belt of states stretching across northern India that is home to the core of the BJP's voter base.

In Telangana state to the south, the regional Telangana Rashtra Samithi party was rewarded for its gamble on early elections with more seats for its majority. Finally, in the northeastern state of Mizoram, the Mizo National Front (another regional party) ousted the INC from power by winning 26 of the state assembly's 40 seats.

Why It Matters

These five state elections are India's last electoral contests before parliamentary elections take place in April 2019. Across the country and particularly in urban districts, the ruling party was harmed by a delayed backlash to the nationwide rollout of the Goods and Services Tax in July 2017 and the demonetization drive in November 2016. Caste politics played a factor as well, as upper caste voters were agitated by the BJP's attempt to expand its clout with Dalits — also known as untouchables, who effectively occupy the lowest rung of the caste system — by restoring provisions from an anti-discrimination law. Meanwhile, the INC was rewarded for its strategy of focusing on the plight of farmers, who are grappling with stagnant crop prices following an abundant harvest in 2017.

If the INC can translate its state-level efforts into a coherent national campaign, India could once again find itself ruled by a coalition government. The INC would face significant challenges in stitching together a coalition of competing opposition parties to create such a campaign. A coalition government that is not led by the BJP would dampen investor confidence in India and further complicate the already-herculean task of passing land and labor reforms designed to create manufacturing jobs and industrialize the country. On the other hand, a coalition government would also likely reverse the more controversial, Hindu nationalist policies that have been implemented under Prime Minister Narendra Modi. 

Going forward, Modi will double down on Hindu nationalism and economic populism in an effort to consolidate his party's base. Meanwhile, his ruling BJP will ramp up its outreach to India's 263 million farmers through loan waivers and better crop prices, though this will likely strain the government's effort to keep its deficit at around 3.3 percent of the country's gross domestic product.

Background

The state assembly elections will have an immediate impact on how parties position themselves ahead of parliamentary elections in 2019, but the votes also have implications for the Rajya Sabha, India's upper house of Parliament. Through a gradual process that takes place over several years, state assemblies are responsible for nominating representatives in the Rajya Sabha. The BJP-led alliance currently has 89 members in the 245-seat chamber (36 percent of seats), but the ruling party is looking to gain a majority that will help it pass legislation. During his first term in office, for example, Modi has focused on tax reforms such as the Goods and Services Tax, which aimed at undoing the economic fragmentation between Indian states by creating a unified market. But to continue furthering his ambitious reform agenda, Modi and his ruling BJP will need support from Indian citizens at the ballot box.

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