Indian Prime Minister Narendra Modi is expected to be sworn in for a record third term on June 8, with key allies pledging their support a day after a narrow electoral margin that saw his party lose its majority in parliament.
Populist Modi, who has dominated Indian politics since coming to power in 2014, needs the support of regional allies who have switched allegiances, potentially complicating the government’s reform agenda for the first time.
On Wednesday, the National Democratic Alliance (NDA) said it would support two coalition allies, the Telugu Desam Party, a key regional player in the southern state of Andhra Pradesh, and the Janata Dal (United), which rules the northern state of Bihar. . .
“We, along with the NDA, will attend a meeting in Delhi today,” TDP leader Chandrababu Naidu told reporters, referring to the BJP-led alliance’s meeting the following day. The federal cabinet met on Wednesday morning and recommended that Modi dissolve the constitutional parliament before forming a new government.
According to local media, Modi and his new cabinet will be sworn in on Saturday.
The NDA won 293 seats in the 543-member lower house, more than the 272 needed to form a government.
According to rating agency Moody’s, Modi’s BHJ ranks 240 alone. TDP won 16 seats and other allies NDA won the rest.
The opposition INDIA Alliance, led by the centrist Congress Party Rahul Gandhi, won 230 seats, more than expected. Congress alone won 99, almost double the 52 it achieved in 2019 – a surprise jump expected to boost Gandhi’s position.
A weak majority for Modi’s allies could spell trouble for more ambitious elements of the government’s reform agenda, rating agency Fitch said.
However, he added: “Despite the smaller number, we expect the broad policy to continue with the government’s focus, ease of doing business and gradual fiscal consolidation.”
The outcome of the election is expected to depend on several regional parties to which Modi has shifted political allegiance over the years, and whose shares fell on Tuesday. As a party that lost a lot of land in the countryside, investors say land and labor reforms are expected to unlock the value and growth can be derailed.
The newspaper said Modi’s hello had gone dark in an Indian Express headline titled “India gives third term to NDA, Modi announces”.
His victory in the seat of Varanasi, one of India’s holiest cities, was more than 150,000 votes out of nearly 500,000 in the last general election held in 2019.
But this waning victory does not mean a commitment to reform, Arvind Panagariya, head of the government’s finance committee, said in an editorial for the Economic Times.
“Necessary reforms can be implemented even if the majority in parliament is reduced. “Achieving sustainable growth at a fast pace can only strengthen the hand of the government in the coming years,” he said.
