Bloomberg News

Gandhi Fails to Revive Congress in Indian Election, Polls Show

March 03, 2012

India’s ruling Congress party failed to gain ground in elections in the nation’s most populous state, voter surveys forecast, a result that may dent the leadership credentials of the party’s touted next chief, Rahul Gandhi.

Three separate post-vote polls by the CNN-IBN television channel and The Week magazine, Headlines Today and India TV showed Congress in fourth position after a monthlong ballot in Uttar Pradesh. Projected victories in Uttarakhand and Punjab states provided better news for Prime Minister Manmohan Singh after a year of policy setbacks.

Congress will win between 38 and 55 of 403 seats in the regional assembly of Uttar Pradesh, home to 200 million people, Headlines Today and India TV showed. While CNN-IBN didn’t give a seat breakdown, it showed Congress winning just 12 percent of the vote. The party secured 22 members in 2007.

“Rahul Gandhi hasn’t delivered” the result Congress wanted, said Satish Misra, a political analyst at the New Delhi- based Observer Research Foundation. “It’s a mixed picture though as Congress has the edge in at least two states, while it has not gained much in Uttar Pradesh.”

The Samajwadi Party will oust the state administration of low-caste leader Mayawati, all three channels forecast, winning as many as 210 seats in the legislature. Congress trailed its biggest national rival, the Bharatiya Janata Party, in the state. Results will be released March 6.

Policy Blocks

If the Samajwadi Party fails to win an outright majority, it may have to consider an alliance with Congress to rule the state. Its 22 members in the lower house of India’s federal parliament would be a boon for Singh’s minority government that has been hobbled by opposition from a key coalition partner, Mamata Banerjee’s Trinamool Congress.

Banerjee has blocked proposals to allow foreign retailers to open supermarkets in India, pass an anti-corruption law, build a nationwide counter-terrorism center and change rules on land purchases for industry.

Singh said in a December interview that he would seek to revive plans to permit the arrival of Wal-Mart Stores Inc. (WMT) and others after the state elections. Leaders of Congress and the Samajwadi Party ruled out a post-poll tie up during campaigning.

Congress’s fight in Uttar Pradesh was led by Gandhi, 41, the son of current party President Sonia Gandhi and scion of a political dynasty that has dominated Indian governments for more than 45 of the 64 years since independence from British rule. Sonia Gandhi, who went overseas for a post-surgery medical checkup late last month, may hand the party leadership to Rahul this year, New York-based Eurasia Group has said.

Corruption Protests

The results of five state elections, that also included Manipur and Goa, are a key test of support for Singh after he endured one of the most challenging periods of his eight-year premiership in 2011.

Indians took to the streets to protest alleged graft in an award of mobile-phone licenses and inflation that stayed above 9 percent for most of the year.

Business leaders have called on Singh to accelerate policy changes as growth moderates. India’s economy grew 6.1 percent in the last quarter, the slowest pace in more than two years, as domestic demand weakened and the global recovery faltered.

Inflation eased to a 26-month low of 6.55 percent in January (INFINFY). It remains the fastest in the so-called BRIC group that also includes Brazil, Russia and China.

The benchmark 30-member Sensex share index has rallied 14 percent this year as overseas investors poured $7.4 billion into local stocks after inflation eased and the rupee jumped from a record low.

During her five-year term, Mayawati has been criticized by rivals for displays of wealth such as raising statues of her political heroes in a state that is home to the highest number of people living in poverty in India.

In Punjab, Congress is set to oust the alliance of the Shiromani Akali Dal and BJP, according to Headlines Today and India TV. The CNN-IBN survey put the sides in a dead heat. In Uttarakhand, Congress will defeat the ruling BJP, securing 31 to 41 of 70 members of the assembly, according to CNN-IBN.

To contact the reporters on this story: Andrew Macaskill in New Delhi at amacaskill@bloomberg.net; Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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