Dec. 9 (Bloomberg) -- India’s main opposition party won the most seats in four of five local elections held over the past month, giving it momentum before a 2014 national poll as voters punished Prime Minister Manmohan Singh’s ruling coalition.
The Bharatiya Janata Party was poised to wrest power from Singh’s ruling Congress party in both the western state of Rajasthan and the capital Delhi, where it’s battling the upstart Aam Aadmi Party, according to the Election Commission of India, which tallied votes yesterday. The BJP also won another term in Madhya Pradesh and Chhattisgarh states. In the smaller northeastern state of Mizoram, Congress retained power.
“We’ve become the front-runner as far as national politics is concerned,” Arun Jaitley, a senior BJP leader, said in televised comments yesterday. “We’d have been happier with a few more seats in Delhi, but we’re reasonably within handshaking distance of the majority.”
BJP victories in areas holding about a sixth of India’s 1.2 billion people would give it momentum to end the Congress party’s decade-long rule in elections due by May 2014 and install Narendra Modi as prime minister, an outcome favored by investors. India’s benchmark stock index will climb as much as 6 percent to a record by year-end if the BJP confirms exit poll predictions of winning four of the five state votes, according to the average of 10 estimates compiled by Bloomberg.
“The state poll results indicate a wave in favor of the BJP and against the Congress,” Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance Co., which manages about 23 billion rupees ($373 million), said by phone. “If it is able to sustain the momentum then it can benefit in next year’s national elections. People have voted for change.”
India’s benchmark stock index surged to a record and the rupee climbed to a four-month high today after the election results. The S&P BSE Sensex jumped 1.6 percent, while the currency touched 60.8475 per dollar, the strongest level since Aug. 12.
In Delhi, the BJP had 31 seats against 28 for the Aam Aadmi Party, which campaigned against corruption in contesting its first election. The incumbent Congress party had 8 seats in the capital, according to the commission.
“This is first time an election has been fought directly by people and volunteers,” said Arvind Kejriwal, leader of the Aam Aadmi Party, which pledged to contest the national elections. “It was a fight for principles and against corruption and price rises.”
In Rajasthan, the BJP defeated Congress with its biggest-win ever in the state. Modi’s party took 162 seats, more than double its tally during the last election in 2008, while Congress fell to 21 constituencies, the agency said.
In Madhya Pradesh, the BJP won a third term with 165 seats, compared to Congress’s 58. The party retained power in Chhattisgarh with 49 seats out of 90 constituencies, compared with Congress’s 39, according to the Commission.
“We work for the people of this country and it is our duty to listen to you,” Rahul Gandhi, a possible prime minister candidate from the Congress party whose family has helmed the country for about four decades since independence in 1947, told reporters in New Delhi yesterday. “We’re going to learn from this and do a better job than anybody in this country, and involve people in ways that you cannot even imagine right now.”
Singh’s Congress-led coalition has seen corruption scandals, elevated consumer inflation and the weakest economic growth in a decade erode its popularity. Modi, 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.
“BJP has fully benefited from the popularity of the Narendra Modi,” Rajnath Singh, the party’s president, told reporters in New Delhi. “People have given clear indication that BJP will form the government” after 2014 parliamentary elections, he said.
The four states holding elections and Delhi account for 73 seats of 543 up for grabs in the national vote. Congress won more than half of those in the last election in 2009.
The price of onions, a key ingredient in Indian cooking, has more than tripled in the last year, disproportionately hurting the poor who make up about two-thirds of India’s population. India’s credit rating may be cut to junk next year unless the general election leads to a government capable of reviving economic expansion, Standard & Poor’s said last month.
“There’s a national anti-Congress wave, which is based upon the destruction of the Indian dream,” said Prem Shankar Jha, an author and independent political analyst in New Delhi. “The Congress party hasn’t done anything about corruption and accountability, and on top of that has wrecked the economy.”
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