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Indian Voters Return Congress Coalition To Power

Posted by: Mehul Srivastava on May 16, 2009

India’s ruling Congress-led coalition pulled far ahead of its opposition as votes were counted Saturday, clawing a victory much greater than exit polls and analysts had predicted.

The party and its allies picked up as many as 75 extra seats all around the country, wresting support from Communists, Hindu nationalists and caste-centered parties, returning Prime Minister Manmohan Singh to a second term. Singh is the first Indian Prime Minister since Jawaharlal Nehru to return to power after a full term, defying a nearly three-decade long anti-incumbency factor.

Singh will return to his offices at a time when India’s economy, along with the rest of the world, is struggling to regain momentum. India’s economy could grow as much as 6% this financial year, down sharply from the searing-hot 9 and 10% quarterly growth figures that has made this country of a 1.1 billion people a destination for foreign investment and its 300 million-strong middle class a coveted goal for the world’s manufacturers.

Indian exports fell 33% in the last quarter, its recent stock market rally of about 30% is yet to return the benchmark index to the heights it reached in 2007 (it fell 52% in 2008), and has suffered from mass layoffs in manufacturing and the textile industry.

“When the world is in serious difficulty, we stand one as a nation,” said Singh at a televised press conference, speaking after Congress Party President Sonia Gandhi, the Italian-born widow of the last member of India’s Gandhi dynasty to hold the PM’s seat. “I expect all secular parties to come together to give this country a stable government.”

Singh’s “secular” jab was directed at the Bharatiya Janata Party, India’s second largest political party, which campaigned on a twin cry of Hindu nationalism and economic revvial, and ended up losing 17 seats as ballots were still being counted, reducing its position in parliament to about 166. A BJP spokesman was unavailable for comment, and BJP leader L K Advani has yet to address the media.

These numbers will change in the next few hours, so for, a constantly updated chart see here and here. (Both links are to the websites of Indian television channels)

With the Congress coalition close to 272 seats out of the 534 contested, this is the most convincing mandate for a political party from Indian voters since 1992, a year that kicked off a series of weak coalition governments that collapsed almost as often as
they held together.

Perhaps the most cheering news for business is the new-found stability of the Indian government and the sobering defeat of the Communists in their strongholds of West Bengal and Kerala. The Communist parties in India, under a group called the Third Front, had resisted major reforms during the period from June 2004 to July 2008 as part of the previous Congress coalition. The communists abandoned the coalition July 22 protesting a landmark Indo-US nuclear deal, leaving the government scrambling for support.

“If the old relationship (between Congress and the Communists) were to be re-established we can almost certainly write off the prospect of a further opening up of key sectors of the economy to foreign competition, let alone any liberalisation of the labour market,” HSBC economist Robert Prior-Wandesforde had warned in a research report on Friday.

That possibility has pretty much vanished – the Congress coalition will need little extra support to form a government, and in television appearances, the leader of the Samajwadi Party, Amar Singh, which won about 21 seats, indicated that he was open to an alliance. The SP had rescued the Congress coalition in July after the Communists moved to the opposition.

In a surprise loss, Palaniappan Chidambaram, who has served as India’s Finance Minister twice, and is considered amongst Indian politicians to be the most friendly to market reforms, foreign investment, industrial growth and rapid urbanization, is trailing his opponent. Chidambaram’s last job was as home minister, a thankless assignment he took reluctantly after the Mumbai attacks in November 2008.

Praful Patel, India’s reform minded aviation minister, whose election travails BusinessWeek profiled this Friday, looks likely to win his first Lok Sabha (House of the People) seat since 1999.

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Reader Comments


May 16, 2009 12:25 PM

Now a days politics has become such a casual thing for everybody. I feel the person who is elected should have feel about the nation and people. Then only he can work well and do some thing for the nation.Michigan


May 16, 2009 09:58 PM

Good to see Indians made the right choice to vote-out right wing lunatics. There is a lesson here for Pakistan.


May 17, 2009 01:08 AM

The BJP has always been ahead of its times in its manifesto and campaign strategy. India is not ready for development based politics. Every great democracy needs alternatives so that the country can take giant leaps ahead with fresh perspective and strong leadership. For a country which does not have any party endorsed debates on national television and where 80% of educated middle class do not vote it will always be a stable socialistic representative party which will get elected. The ideas on development and pride of selfless service that BJP cherishes are endearing...its time will come when India is Ready for thinking big. Just read their campaign manifesto...It is the right leadership and vision....just not for the current audience..

mahendra kumar dash

May 17, 2009 09:39 AM

It implies that merger and acquisition in Banking Sector will be fast which was just delayed due to Leftist support in last coalition.The Narasingham Commmittee recomendations will be implented in full scale.Now left is gone.
Over all position is not going to change much and rather it will worsen because the Progressive Alliance has some elements with them which will not allow the majority party Congress to take strong decisions.
They name it progressive alliance,but again there will be fall out or some minor parties desire will prevail over national interest.Progeressive alliance progress towards new alliance every time.The present election is the bright example.Fact is no single party got absolute majority and it is coalition again.


May 17, 2009 02:41 PM

The BJP is a backward party. The politics of division and hate that it has fueled though its fundamentalist philosophy of Hindutva are not progressive in any way. Yes they have backed industrialization, but their philosophy is unsustainable. India deserves far better than Modi and Varun Gandhi and his fascist goons in the RSS.

Rahul Gandhi has demonstrated the possibility of a new future for India, one in which all Indians are included. I applaud him for his vision and tenacity.

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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