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Modi’s BJP Wins Two More State Elections in India

“For investment advisors only”

India’s Prime Minister Narendra Modi’s political party, the Bhartiya Janata Party (BJP) won two more state elections in India. The BJP managed to retain the state of Gujarat where it has been incumbent for over 20 years and managed to displace the Indian National Congress (INC or simply Congress) from the state of Himachal Pradesh.

As the counting of votes began on the morning of December 18, 2017, the initial trends pointed to a BJP win in Gujarat. However, the trend reversed momentarily, only to reverse again sometime later. In the end, the BJP won 99 seats in the assembly- seven more than the required number to form government. The BSE Sensex index ended the day at record high which the Indian media has credited directly to BJP’s poll wins1.

Commenting on BJP’s victory, Bhim D. Asdhir, President and CEO of Excel Funds, stated “Since Modi took over as Prime Minister, the number of states where the BJP and its allies have formed government has risen from 5 to 19 and the INC has consistently lost ground. And now, despite 22 years of incumbency, the BJP has managed to retain the state of Gujarat. This is a signal of faith people have in Modi and their desire for development.” Bhim also believes that the narrow victory margin could be a blessing in disguise for the BJP. “A result like this should keep the state government on its toes, motivating it to work hard to further the development agenda of India’s Prime Minister.”

Interestingly, the urban regions of Gujarat overwhelmingly voted for the BJP. Political commentators believe that this indicates that the pain caused by demonetization had ceased to be a factor in the elections. Moreover, the quick response of the government to the GST issues raised by businesses, may have further helped the BJP to retain the urban electorate2.

In the state of Himachal Pradesh, the BJP managed to win 44 out of 68 seats, ending 5 years of Congress rule. With these two wins, the BJP along with its allies now rules 19 out of 29 states in India.

The narrower than expected victory margin in Gujarat is expected to shift the focus of the government to rural constituencies and implement more people friendly programs and spend more on infrastructure upgrades to bring more balance to its development efforts 3.

[1] The Hindu, December 19, 2017, “BJP poll win takes Sensex, Nifty to record high”

[2] The Times of India, December 19, 2017, “GST sweeteners took sting out of Congress campaign in urban Gujarat”

[3] Bloomberg, December 18, 2017, ”Modi Gets a Reality Check in His Home State”

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