Modi to Push on with Reforms despite Crushing Poll Loss
India's finance minister vowed Monday to push ahead with much-needed reforms after his party's drubbing at a key weekend state poll hiked fears of a slowdown in the government's promised agenda.
The ruling Bharatiya Janata Party (BJP) suffered a shock defeat at assembly elections in one of India's biggest and poorest states after a no-holds barred campaign fronted by Prime Minister Narendra Modi.
Analysts said the loss was a blow to Modi's appeal as an invincible vote-winner after he stormed to power at last year's general election with the biggest mandate in 30 years.
Galvanized opposition parties are now expected to step up efforts to derail the government's plans to push economic reforms through the national parliament, which reconvenes on November 26 for the winter session.
India's stock exchange fell as much as 2.3 percent in Monday's morning session on news of the BJP's defeat but recovered towards closing.
Finance Minister Arun Jaitley said the government would press on with initiatives including a long-awaited national sales tax despite lacking the numbers in parliament's upper house.
Jaitley also rejected that the election was a referendum on the Modi-led government's 17 months in power.
"I don't see it as a setback to the economy... structural reforms will continue. They should continue at a rapid pace," Jaitley said in an interview with ET Now TV network.
"Every election is not a referendum. A state election is not a referendum. You are not contesting on any one issue."
A coalition of rival regional parties clinched 178 seats in the 243-seat Bihar assembly, more than triple the number of the BJP's 53.
Modi turned the month-long election into a test of his popularity, fronting some 30 rallies during the campaign and promising billions of dollars in investment.
But the campaign shifted to issues along religious and caste lines, which have traditionally dominated the state of 100 million people.
"Narendra Modi no longer seems like the juggernaut we saw when he came to power in 2014," analysts from the Center for Policy Research think tank wrote in the Hindu newspaper.
"The drubbing in Bihar significantly weakens the BJP's position at the center. Many policies that it had hoped to push through are now likely to be blocked or compromised."
Modi, with his one-man leadership style, won over legions of voters at the general election, storming to power promising sweeping reforms to revive the faltering economy.
Growth is now purring along at seven percent.
But complaints have been mounting about his failure to nail down major reforms to boost investment and help create jobs for India's tens of millions of young people.
The loss also damages Modi's longer term goal of securing control of the upper house by winning a series of upcoming state elections.
Seats in the upper house are allocated according to political parties' strength in India's state assemblies.
One of Modi's senior ministers warned opposition parties against disrupting parliament, saying voters desperately wanted development in Bihar where two thirds lack access to electricity.
"Bihar verdict is a clear statement of people's aspirations (for development). It should not be interpreted as a mandate to obstruct parliament," Venkaiah Naidu told reporters in New DelhiFitch Ratings agency director, Thomas Rookmaaker, said investors were unlikely to be deterred by the defeat, and expected the government to move ahead with making India easier place to do business.
The loss is the second after the BJP suffered a humiliating defeat in February elections for the Delhi st ate assembly.
It comes as Modi heads to Britain Thursday for talks with his counterpart David Cameron and plans to address a massive crowd of Indian diaspora at Wembley Stadium.
Source: Agence France Presse
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