May 20 (Bloomberg) -- Narendra Modi pledged to work for India’s poor in an emotional speech as he moved a step closer to becoming prime minister after his Bharatiya Janata Party picked him to lead its elected lawmakers and form the government.
“The government should think of the poor, hear them and live for them,” Modi told BJP lawmakers today in New Delhi, pausing to wipe away tears at one point during his remarks. “The new government is dedicated to the poor of this country, to the country’s youth and for the respect of our mothers or sisters. It’s for the farmers, villagers, poor and the lower castes. It’s to fulfill their dreams and aspirations.”
Modi’s party won the first majority in 30 years last week after his message of development resonated across social divisions in a country with a third of the world’s poor. Subdued economic growth and Asia’s second-fastest inflation have eroded the purchasing power of more than 800 million Indians who live on less than $2 per day, according to the World Bank.
Party leaders are scheduled to meet President Pranab Mukherjee this afternoon to discuss the formation of the government. 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.
“It’s a historic day for us,” BJP President Rajnath Singh told elected lawmakers today.
The benchmark stock index was little changed as of 1:14 p.m., and the rupee fell 0.1 percent to 58.6625 per dollar. The yield on the 10-year government bond fell to 8.84 percent from 8.86 percent yesterday.
Backroom talks are continuing 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.
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.
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 inflation exceeding 8 percent 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 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.
“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.
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.
To contact the editors responsible for this story: Daniel Ten Kate at firstname.lastname@example.org Jeanette Rodrigues