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India State Vote Holds Key to Modi's Future: QuickTake Q&A

India will get a hint Thursday of whether Prime Minister Narendra Modi’s magic still works. Exit polls will forecast the outcome of hard-to-predict elections in Uttar Pradesh, the country’s most populous and politically crucial state. (There also will be exit polls for elections held in the states of Punjab, Uttarakhand, Goa and Manipur.) The official results, which will be announced in two days, will signal the likelihood of Modi winning a second term in 2019. Historically exit polls have predicted India’s elections more accurately than opinion polls.

1. Why does Uttar Pradesh matter so much?

With a population of 204 million -- about the size of Brazil -- Uttar Pradesh sends more lawmakers than any other state to both houses of Parliament, and it’s produced eight of India’s 15 prime ministers. With such high stakes, Modi has invested heavily in campaigning in the highly caste-ridden state, holding about two dozen rallies and roadshows to highlight his policies on farmers and the poor.

2. What will voters decide?

Modi’s Hindu-nationalist Bharatiya Janata Party is seeking to capture power in Uttar Pradesh after 15 years in opposition. Polls show it running about even with the Samajwadi Party-Congress alliance of the state’s current chief minister, Akhilesh Yadav. A third party, Bahujan Samaj, which governed the state between 2007 and 2012 and remains popular among poor villagers, is not so far behind.

3. What would a win by Modi’s party signify?

It would be seen as an endorsement of Modi’s programs and policies, not least his society-shaking decision last November to remove high-value currency -- representing 86 percent of the cash then in use -- from circulation. Investors would likely show renewed confidence in Modi’s reform agenda and the country’s economy, which still boasts one of the world’s fastest growth rates, a stable currency and slowing inflation. Politically, a win in Uttar Pradesh would strengthen the BJP-led coalition’s hand in selecting India’s new president in elections likely to take place in July. One thing out of Modi’s reach is a majority in the upper house of Parliament, where his ruling coalition is about 50 seats short of control. Only 10 seats from Uttar Pradesh are up for grabs before 2019, when Modi would seek another term.

4. What would a loss mean?

It would signal that Modi’s popularity is waning after he secured the biggest electoral mandate in three decades in the 2014 general election. The BJP swept Uttar Pradesh in that election, winning 71 of the state’s 80 lower house seats. A loss would crimp Modi’s ability to initiate reforms and push difficult legislation on topics such as land and labor. Investors would likely pause for some months to recheck India’s economic fundamentals. The impact on markets would depend on how badly Modi’s party lost.

5. Who else could take power?

A win by the Samajwadi Party in coalition with the Congress Party would be seen as an endorsement of Yadav’s development and welfare push, which includes a new six-lane expressway. That coalition would create hurdles for Modi in Parliament. If the Congress Party wins a sizable number of seats in the Uttar Pradesh’s 403-member assembly, it will boost the political strength of party vice president Rahul Gandhi, who is vying to challenge Modi in 2019. In the case of a surprise victory by the Bahujan Samaj Party, its leader -- Mayawati, who goes by one name -- would emerge as a challenger to Modi. She draws support from the lower rungs of the country’s traditional caste system.

6. What if no party or coalition wins a majority? 

A hung assembly would mean uncertainty for political parties, analysts and investors. The unpredictable Mayawati could emerge as a pivotal player who can bargain with the other two groups.

The Reference Shelf

  • How Modi popularity is at risk in the elections.
  • Smartphones and toilets help win votes in India’s villages.
  • A QuickTake Q&A on India’s canceling of currency.
  • An August 2015 profile of Narendra Modi.
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