Dec. 5 (Bloomberg) -- India’s main opposition party is set to win four of five state elections held over the past month, wresting power from the ruling Congress party in one area and giving it momentum ahead of national voting next year.
The Bharatiya Janata Party, which picked Narendra Modi as its choice for prime minister, is set to retain two states, take power from Congress in another and win the most seats in the capital New Delhi, according to an exit poll yesterday conducted by C-Voter and broadcast on the Times Now television channel. The rupee surged to a five-week high today, while stocks and government bonds rose.
“The exit poll results indicate there is strong anger against Congress for its failure to check price rises and corruption,” said Satish Misra, a political analyst at the Observer Research Foundation, a policy group based in New Delhi. “It seems this trend will be reflected in the general elections, and the BJP will have some edge over Congress.”
The state elections are the final test for India’s two major parties before a national vote that must be held by May 2014. Prime Minister Manmohan Singh’s Congress-led coalition has seen corruption scandals, elevated consumer inflation and the weakest economic growth in a decade erode its popularity.
Official vote counting in the states, home to about a sixth of India’s 1.2 billion people, will take place on Dec. 8. BJP victories in Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi may boost Indian stocks, according to Deven Choksey, managing director of Mumbai-based K.R. Choksey Shares & Securities Pvt.
“The turnout in Delhi means a big victory margin for the BJP,” Choksey said. “A victory in Delhi will be the trump card for the BJP in the 2014 national elections.”
The rupee rose 0.8 percent to 61.5550 per dollar as of 10:43 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. It touched 61.5350 earlier, the strongest level since Oct. 31. The S&P BSE Sensex of stocks jumped 1.8 percent to 21,082.60, headed for the highest close since Nov. 3.
The 10-year benchmark bond snapped a five-day losing streak. The yield on the 8.83 percent notes due November 2023 dropped three basis points, or 0.03 percentage point, to 8.75 percent, prices from the central bank’s trading system show.
In a setback for Congress, the exit poll shows the Hindu nationalist BJP gaining its highest seat tally since 1993 in New Delhi while falling short of a majority. The BJP will have 31 of the capital’s 70 seats, with the incumbent Congress taking 24. The Aam Aadmi Party, which campaigned against corruption while contesting its first election, is poised to win 11 seats, the poll showed.
The BJP will take control of Rajasthan from Congress by winning 130 out of 200 seats, up from its current total of 78, according to the poll.
While Modi’s party will retain power in Madhya Pradesh and Chhattisgarh, Congress is poised to gain seats from its current tallies, the poll showed. In Mizoram, a small state in India’s northeast ruled by Congress that also held elections, no results were given on Times Now television channel.
No margin of error or details of the poll methodology were given. All the state elections had record voter turnout, the Hindustan Times reported, without saying where it got the information.
Modi, 63 and chief minister of Gujarat state in western India, is promoting his record of governance and stronger-than-average economic growth in the state he has ruled since 2001 in an attempt to propel his party to national power. Congress has been deploying Rahul Gandhi, a potential prime minister candidate, and his mother Sonia Gandhi, the party’s president, both members of a political dynasty that has ruled the country for more than half of the 66 years since independence.
The price of onions, a key ingredient in Indian cooking, has climbed 278 percent in the last year. Higher food prices eat into consumers’ disposable incomes and disproportionately impact the poor who make up about two thirds of India’s population.
India’s final full session of parliament before the general election began today. The government has listed 38 bills for passage including one that would give a third of the seats in parliament to women. Singh said Dec. 3 the government is committed to passing legislation to create a new state in southern India.
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