Modi Power Bolstered as BJP Gains in Two States

Indian Prime Minister Narendra Modi’s plans to revive the nation’s economy received a boost as vote counting in two states showed his party leading in both and poised to win majority in one of them.

The Bharatiya Janata Party and allies led in 122 of the 288 assembly constituencies in Maharashtra, whose capital is Mumbai, and was set to win 47 of 90 seats in the northern state of Haryana, CNN-IBN television channel said. While the BJP could form a government in Haryana on its own, it may need a partner in Maharashtra on falling short of the halfway mark.

The electoral gains may embolden Modi, who is seeking to curb subsidies and bolster government finances. The poll results will help his party strengthen its position in the upper house of parliament, which is crucial to pass legislation needed to overhaul policies. The BJP controls the lower house, or the Lok Sabha, after winning the strongest mandate in 30 years and is in the minority in the Rajya Sabha.

“This is a victory for all practical purposes,” Akshay Mathur, head of research at Mumbai-based Gateway House, said by phone. “Modi was really interested in winning these two state elections because he has a majority in the lower house but he doesn’t have the same in the upper house. This is good enough.”

Representation in the Rajya Sabha is based on seats in local assemblies. Maharashtra sends 19 lawmakers to the 245-member house and Haryana accounts for five seats. The BJP currently controls 18 percent of seats.

His government yesterday scrapped controls on diesel prices and increased natural gas tariffs in the biggest steps to improve public finances since he came to power in May.

Face of Campaign

Modi has been the face of the BJP’s campaign, addressing more than 30 rallies in a move unprecedented for a prime minister after his party split with allies over seat sharing. Most exit polls predicted the BJP ending up as the largest party in both states while falling short of a majority.

To some, the lack of majority in Maharashtra was a blow to Modi and the BJP.

“Modi was the sole face of the BJP and projected as a magic personality who can swing votes,” Satish Misra, an analyst at the Observer Research Foundation in New Delhi, said by phone. “Politically, this is definitely a setback.”

The Modi “wave” is still on and the opposition is wrong to write it off, Amit Shah, the BJP’s president, told reporters in New Delhi today. His party will head the government in both the states, he said.

The BJP’s former ally in Maharashtra, the Shiv Sena, was leading in 61 of the seats in the state. The fractured mandate spurred speculation that the two, which ended a 25-year partnership before the polls, will join hands once again to form a government.

Highest Revenue

A local rival, Nationalist Congress Party, which was leading in 41 of the constituencies, offered support to the BJP, the Press Trust of India reported, citing one of its leaders Praful Patel.

Maharashtra’s economy, the largest among India’s 29 states, grew almost twice as fast as the national rate in the year through March 31, Commerce Ministry data show. It has India’s highest revenue collections, according to government estimates, and has attracted the most foreign direct investment since 2000 -- 30 percent of the total, or $68 billion.

State elections are important for control of the upper house of parliament.

The Congress party in August used the upper house to block a six-year-old bill proposing to allow foreign investors ownership of as much as 49 percent of a local insurance company. Modi’s party also had blocked it while in opposition.

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