India’s Modi on track for 5 more years in power after BJP sweeps crucial state elections

The BJP retained power in Madhya Pradesh, a central state with 56 million voters, and wrested control of the state legislatures from its rival, the Congress party, in Rajasthan and Chhattisgarh. The results from the Election Commission of India on Sunday exceeded exit polls’ predictions.

Congress was able to flip the southern Indian state of Telangana, where a regional party which had held power for two consecutive terms conceded defeat.

While the state elections aren’t a proxy for 2024’s national vote, the fact that the opposition lost fairly comprehensively will buoy the ruling party and Modi ahead of the general elections. Congress under Rahul Gandhi had tried to highlight issues like joblessness and caste discrimination in the hope it would resonate nationally in a few month’s time.

“Prime Minister Modi remains exceptionally popular,” said Shumita Deveshwar, chief India economist at GlobalData TS Lombard. The state polls show “the mood of the nation lies in bringing him back to power for a third consecutive term”, she said.

A weaker performance by the BJP may have provided the opposition with some momentum, “but the outcome now signals that Modi’s return to power is inevitable,” Deveshwar said.

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The results may give a boost to financial markets on Monday, with investors betting that another term for Modi means policy continuity. Jefferies LLC said in October that India’s stock market could drop 25 per cent if the BJP faces a surprise defeat.

“In the whole world, the echo of these election results will be heard,” Modi said while addressing party workers at the BJP headquarters in New Delhi on Sunday evening. “These results will strengthen the world’s faith in India’s development, these results will give new faith to the world’s investors.”

While the BJP has already won the majority of the seats in the three states and Congress in one, the final tally could be higher once the Election Commission finalises the results. Counting in the state of Mizoram, where regional parties dominate, will be done on Monday.

BJP leaders hailed the party’s performance, especially in the key state of Madhya Pradesh.

“We had complete hope and faith,” Ashwini Vaishnaw, a cabinet minister and senior BJP leader, told reporters on Sunday. “Everyone knows that Modi is in the heart of Madhya Pradesh and Madhya Pradesh is in Modi’s heart.”

Congress will now need to regroup with other opposition groups to figure out how to fight Modi in the coming national elections. Opposition parties had pledged to form an alliance to unseat the BJP by setting aside their differences and projecting a united front.

Congress leader Rahul Gandhi has positioned himself as Modi’s main challenger, but apart from the wins in two southern states, his party has struggled to peel voters away from the BJP.

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“The BJP’s policies are a mix of efficient policy implementation that helps in consolidation of votes” amid a backdrop of Hindu nationalism, GlobalData TS Lombard’s Deveshwar said. She pointed to popular policies such as a cash handout scheme for women in Madhya Pradesh.

“This helps overcome factors such as inflation, sluggish job creation and anti-incumbency that would otherwise have hurt the BJP in a state such as Madhya Pradesh,” and has likely hurt Congress in the other Hindi heartland states of Rajasthan and Chhattisgarh, she said.