India’s Gandhi family retained control of the Congress party despite its worst-ever electoral defeat, underscoring the lack of alternatives in an organization that has governed the country for most of its history.
Congress’s highest decision-making body yesterday rejected offers to resign from Sonia Gandhi, the party’s president, and her son Rahul Gandhi, its vice president, according to Janardan Dwivedi, the party’s general secretary. Narendra Modi’s Bharatiya Janata Party won the biggest electoral mandate in 30 years last week, ousting the Congress after a decade in power.
“The Working Committee unanimously said that resignations will not solve the party’s problems,” Dwivedi told reporters in New Delhi. The party plans to prepare a road map to address its issues, he said.
Rahul Gandhi, the son, grandson and great grandson of Indian prime ministers, has been a reluctant politician, with Congress announcing in January that he wouldn’t be its candidate for prime minister. He has rarely spoken in legislative debates and missed more than half of parliament sittings in the past five years, according to PRS Legislative Research, a research group that tracks the body.
“The Congress party has done pretty badly,” Rahul Gandhi said on May 16. “There’s a lot to think about and as vice president of the party I hold myself responsible.”
BJP lawmakers will meet today to formally elect Modi as their pick for India’s prime minister, while backroom talks continue for cabinet positions. His government will face the challenge of boosting an economy growing at near the slowest pace in a decade while averting a sovereign rating downgrade and handling territorial disputes with neighboring nations.
Reviving the economy and creating investor confidence will be the top priority for the new government, M. Venkaiah Naidu, a former BJP president and lawmaker, said in a May 18 interview. Talks about the composition of the government have begun, he said.
Arun Jaitley, 61, a former trade minister, is the frontrunner to become finance minister even though he failed to win a seat in the lower house of parliament, according to two senior party leaders, who asked not to be identified because the discussions are private. Other coveted posts include foreign affairs, home and defense.
BJP President Rajnath Singh yesterday consulted Sushma Swaraj, the party’s most powerful woman leader, after Modi on May 18 met veterans Lal Krishna Advani and Murli Manohar Joshi.
The BJP-led bloc won 336 of the 543 seats up for grabs, with the party alone winning 282. The outgoing Congress-led alliance garnered 59 and smaller regional parties took 148 seats.
“The overwhelming election mandate implies a stable government, significant legislative fire-power and no excuses,” Rohini Malkani, an economist at Citigroup Inc. in Mumbai, wrote in a research report yesterday. “The government now needs to deliver and we believe it can given its economic emphasis, stable composition and decisive governing structure.”
India’s economic growth will accelerate to 5.4 percent in the fiscal year ending March 31, from 4.4 percent in the previous 12 months, the International Monetary Fund predicted last month. The government estimates that India’s gross domestic product grew 4.9 percent in the 12 months ended March 31, near the previous year’s 4.5 percent, the slowest in a decade.
Voters punished the the Congress party for the slowdown, as well as Asia’s second-fastest inflation and graft scandals. Modi campaigned on his record of bringing stronger-than-average economic growth to Gujarat, the state he’s run since 2001.
The benchmark stock index rose 1 percent yesterday and the rupee climbed 0.3 percent to 58.5950 per dollar. The yield on the 10-year government bond rose to 8.86 percent from 8.83 percent on May 16.
Modi will probably be sworn in on May 24 as the date coincides with a day Hindus consider auspicious, the Hindustan Times reported yesterday, without saying where it got the information. The NDTV channel put the date at between May 25 and 27, again without disclosing where it got the information.
Modi’s policies over the next few months will have significant implications for the nation’s credit rating, Standard & Poor’s said May 16. The company had said it might downgrade Asia’s third-biggest economy to junk status if the next government is unable to revive growth.
“The agenda of the government in the first 100 days will be important to maintain positive momentum,” Radhika Rao, an economist at DBS Bank Ltd. in Singapore, wrote in an e-mail yesterday. The decisive win “will pave the way for swift decision-making and implementation of reform measures,” she said.
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