India’s Congress Sweeps to Biggest Poll Win Since ‘91 (Update2)
By Cherian Thomas and Bibhudatta Pradhan
May 16 (Bloomberg) -- India’s ruling Congress party swept to the biggest election victory since 1991, ensuring a stable government in the world’s largest democracy as Prime Minister Manmohan Singh strives to engineer an economic recovery.
“The people of India have spoken, and spoken with great clarity,” Singh, 76, told reporters in New Delhi today, applauding the role played by party president Sonia Gandhi and her son, Rahul, whom he urged to join the Cabinet. “It will be our effort to rise up to their expectations.”
Singh’s new government will require fewer coalition partners with conflicting policy demands, after the party’s spending on the rural poor and grassroots rebuilding yielded dividends. The victory also ensures continuity for the Obama administration in its efforts to get India’s help in fighting militancy in neighboring Pakistan and Afghanistan.
“It gives Manmohan Singh a much freer hand and Congress has gained greater flexibility,” said E. Sridharan, academic director of the University of Pennsylvania Institute for the Advanced Study of India in New Delhi. “The smaller parties can’t threaten to pull down the government.”
An intensifying conflict between the army and Islamic militants in Pakistan, which the U.S. hopes India will play a leading role in confronting diplomatically, will top Singh’s foreign policy agenda. He froze ties with nuclear-armed Pakistan after last November’s attacks on Mumbai by 10 Pakistani gunmen. The BJP had called for the complete severing of ties.
Firecrackers, Drumbeats
Congress and its allies won or led in 260 of the 543 lower- house seats, according to the Election Commission. The opposition Bharatiya Janata Party conceded defeat after its alliance lost ground, tallying 161.
Dozens of Congress supporters burst firecrackers, banged drums and danced atop a jeep outside Sonia Gandhi’s New Delhi house, chanting “Jai Ho,” a victory slogan from the Oscar- winning movie “Slumdog Millionaire.” About 1 kilometer away at BJP headquarters, a dozen police took shade from the 41 degrees Celsius (106 degree Fahrenheit) heat as supporters drifted away.
Congress alone won or led in 205 seats, according to the commission, compared with a final haul of 145 in the 2004 election. The BJP is headed for 117 seats, down from 138.
Stock Rally?
The projected victory margin, which far exceeds exit poll predictions, may help extend the nation’s longest stock rally in three years. India’s benchmark Sensex climbed 23 percent in 2009.
“The Nifty can cross 4,000 within a week and the Sensex can touch 14,000 by June-end,” said Devesh Kumar, managing director of Mumbai-based Centrum Broking Pvt. “Foreign institutional investor participation may go up.”
For the BJP, led by 81-year-old Lal Krishna Advani, the defeat may force a rethink of an ideology that places Hindu values as paramount. The party built itself into a national force from the late 1980s with a campaign to construct a temple on the site of an ancient mosque, polarizing public opinion.
Arun Jaitley, a BJP leader, congratulated Congress on its victory at a New Delhi press conference. The party will co- operate with the next government in opposition, he said.
Singh, who was flanked by Sonia Gandhi, said he would like Rahul to join the next Cabinet. The 38-year-old son and grandson of assassinated prime ministers was the party’s most visible campaigner, picking young candidates to attract first-time voters. Congress gained seats in the states of Uttar Pradesh and Punjab, where Gandhi has rebuilt the party’s organizational base.
Marathon Election
Today’s counting of 430 million ballots is the culmination of a five-week election, requiring 834,000 polling stations from the Himalayas to tropical islands in the Bay of Bengal.
Congress campaigned on a pledge to supply cheap rice and wheat in a nation where 828 million people subsist on less than $2 a day, according to the World Bank. The government has waived loans for farmers, invested in rural roads and introduced special job programs to shore up popular support.
“It’s a case of good economic policies getting converted into good politics,” said Chandra Prakash Bhambri, a professor of politics at the Jawaharlal Nehru University in New Delhi. “Congress didn’t ignore the rural areas. The rural jobs program was the best scheme, which helped about 40 million people.”
Congress has emphasized rural development as a means of reviving India’s $1.2 trillion economy, which has been buffeted by the global recession. The economy may grow 6 percent this year, the weakest pace since 2003, according to the central bank.
Foreign Investment
Singh will be able proceed with plans to ease foreign investments in insurance and banking should he form a government without the support of communists, key allies in 2004. The two sides parted ways in July after four years of wrangling on issues ranging from allowing retailers including Wal-Mart Stores Inc. into the country to increased foreign ownership of insurers.
The main communist party is set to lose as many as 27 of its 43 seats, the commission said.
“Now the government has no excuse not to perform. It can’t say it’s being dragged down by the communist party,” said Professor Rajat Kathuria of the Indian Council for Research on International Economic Relations.
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