Indian Prime Minister and Bharatiya Janata Party leader Narendra Modi speaks during a... Read More
Bickering over seat-sharing prompted Desai’s Shiv Sena party and now-Prime Minister Modi’s BJP to end a 25-year alliance in Maharashtra, India’s second-most populous state and the home to its financial capital, which heads to the polls on Oct. 15 along with Haryana, a state in northern India. Desai called it “a betrayal” by the ruling party.
“The BJP’s leadership seems to lack the
foresight required for long-term policy making,” Desai, a candidate for Shiv Sena in the state elections, said in an interview this week while on the campaign trail. “The BJP will be isolated if they break friends at this pace. Today it won’t matter as they are good days for them, but in bad times they’ll need us.”
A poor showing for Modi’s party in the first major electoral test after its landslide nationwide victory in May threatens to hurt his ability to pass laws that would revive Asia’s third-largest economy. Victory would provide an added boost to his popularity and bolster the BJP’s chances of taking the upper house, the one legislative body it doesn’t control.
“If they win in Maharashtra, Modi’s hand will be hugely strengthened, and he’ll come to Delhi and lord it over for the next four years,” Mohan Guruswamy, chairman of the Centre for Policy Alternatives in New Delhi and a former finance ministry official under a previous BJP-led government, said by phone. “A loss will mean that people will start picking on him.”
40 Rallies
The two states, which hold about 11 percent of India’s population, are now both controlled by the opposition Congress party. The BJP is set to win 133 of 288 seats in Maharashtra, with Shiv Sena taking 57 seats, according to an India Today Group-Cicero opinion poll published yesterday that surveyed 7,346 people and gave no margin of error.A separate Hansa Research poll showed the BJP winning 154 seats, compared with 47 for Shiv Sena, Times of India reported. The BJP and Shiv Sena had won 90 seats combined in 2009. Results are due Oct. 19.
Modi is doing his best to ensure the gamble pays off, reviving the presidential-style campaign that propelled the BJP to win an absolute majority in the lower house of the national parliament for the first time in 30 years. He plans to address about 40 political rallies in Maharashtra and Haryana by the time votes are cast -- almost unprecedented for a prime minister in past state elections.
Largest Economy
“Maharashtra and Mumbai used to be the economic hub of the country, but the looting has not only destroyed them but it’s also affected India’s economy as well,” Modi told a rally in Nagpur on Oct. 7. “The economy cannot flourish without the development of Mumbai or Maharashtra.”Maharashtra’s economy, the largest among India’s 29 states, grew almost twice as fast as the national rate in the year through March 31, according to Commerce Ministry data. The state has India’s highest revenue collections, according to government estimates, and attracted the most foreign direct investment -- 30 percent of the total, or $68 billion -- since 2000.
India’s benchmark S&P BSE Sensex (SENSEX) index has increased more than 25 percent this year, the best performer among the world’s 10 biggest markets. The rupee is the top performing currency in the past year among a basket of 12 Asian nations tracked by Bloomberg, gaining about one percent.
Buying Opportunity
A poor performance in by-elections last month has increased pressure on the BJP to perform well next week, CLSA Asia-Pacific Markets analysts led by Mahesh Nandurkar wrote in a Sept. 30 note. The party’s breakup with Shiv Sena in Maharashtra and decision to contest the Haryana election alone are negatives for the BJP, they wrote, adding that a similar split among Congress and its main ally made the Maharashtra race “wide open.”“A potential loss for BJP will be a sentiment negative for the market but it will not impact Modi’s policy making and the growth improvement trajectory remains in-tact,” the CLSA analysts wrote. “Any potential dip after elections will be a buying opportunity.”
State elections are important for control of the upper house of parliament, where representation is based on seats in local assemblies. Maharashtra sends 19 lawmakers to the 245-member upper house of the Indian federal parliament, while Haryana accounts for another five seats.
Options Open
The Congress party in August used the upper house to block a six-year-old bill to allow foreign investors to own as much as 49 percent of an insurance company. Modi’s party had earlier blocked it while in opposition.For now, the BJP and Shiv Sena have retained an alliance at the national level. Modi’s party in May won 52 percent of seats in the lower house of parliament, compared with 3 percent for Shiv Sena, a victory that prompted the BJP to seek more seats in Maharashtra and push for the chief minister’s post.
Shiv Sena didn’t show flexibility over seat allocations, Devendra Fadnavis, the BJP’s chief in Maharashtra, said in a televised press conference in Mumbai on Sept. 25. Even so, Modi has refrained from attacking Shiv Sena in campaign speeches.
“In Maharashtra, they are keeping their options for an alliance after the elections,” said Paranjoy Guha Thakurta, who has written about Indian politics for more than three decades, said of the BJP. “Obviously if they were so confident of sweeping Maharashtra, they wouldn’t have taken this position.”
Shiv Sena supporters wearing orange scarves and waving party flags this week accompanied Desai as he appealed for votes in Mumbai’s trash-ridden, dusty streets. Many still supported Modi as prime minister and blamed local BJP leaders for the split between parties.
‘Battlefield Tank’
“Shiv Sena should also break away from the National Democratic Alliance as it makes no sense to keep a two-faced relationship with the BJP,” Shubhangi Matkar, 45, said in reference to the Modi-led alliance that runs India.Shiv Sena first joined the BJP when it only had two seats in the national parliament, Desai said, adding that a common goal of promoting Hindu nationalism underpinned the alliance.
“Today’s leadership is more about deal-making, interested in short-term gains,” Desai said of Modi’s party. “It seems the BJP is riding a battlefield tank, crushing everyone who comes in the way, not giving a thought whether it’s a friend or a foe.”
(An earlier version of this story corrected the number of seats in the Maharashtra assembly in the sixth paragraph.)
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