Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) saw its seat count dip to 240 as per trends late evening—a loss of 63 seats from the 303 it won five years earlier. While BJP is far from a simple majority of 272 seats in the 543-member Lok Sabha, the National Democratic Alliance (NDA) is set to cross the half-way mark with 293 seats, which entitles it to a clear third term.

The opposition INDIA alliance is likely to secure 233 seats, led by the Indian National Congress which nearly doubled its Parliament strength to 99 seats. INDIA is short for Indian National Development Inclusive Alliance.

“People have placed their faith in NDA, for a third consecutive time! This is a historical feat in India’s history,” Prime Minister Narendra Modi said on X, formerly Twitter. “I bow to the Janata Janardan (people of India) for this affection and assure them that we will continue the good work done in the last decade to keep fulfilling the aspirations of people,” he added.

“Our third term will be witness to big decisions… This is Modi’s guarantee. We will strengthen the future of our youth with education and jobs. For farmers we will bring new policies… we will invest in green economy and green mobility. We will make India the world’s third largest economy,” Modi said.

Hindi heartland  

The BJP broke into new territories in the east, notably Odisha, where it won the state elections decisively—but its overall numbers were impacted due to a slide in Hindi heartland states of Uttar Pradesh, Rajasthan and Haryana, and the western state of Maharashtra. It looks set to lose 57 seats in these four states, compared to 2019.

BJP’s significant losses are more a result of pre-poll alliances not working in its favour, rather than any heavy anti-incumbency nationally, said Rahul Verma, a political scientist and fellow at the Delhi-based Centre for Policy Research.

“The BJP continues to be a dominant force in states like Gujarat, Madhya Pradesh, and Chhattisgarh and to some extent in Karnataka… the massive slide in Uttar Pradesh is due to multiple factors including economic distress. It also lost out in the farm agitation belt and due to the counter-offensive created by the opposition that a 400-seat strong NDA can lead to changes in the constitution and removal of reservation benefits (to socially backward classes).”

Verma added that while the Congress improved its national vote share by 5%, the road to recovery where it becomes a serious force to challenge the BJP on its own is still a long one.

Wrong exit polls    

The outcome of the general elections is starkly different from most exit polls which forecast NDA to win between 350 and 400 seats. The pollsters got it spectacularly wrong in states like Uttar Pradesh, Maharashtra and West Bengal, which account for a third of all Parliament seats.

The results imply that BJP will have to depend on its allies, primarily the Telegu Desam Party (TDP) led by N. Chandrababu Naidu, who likely to win as many as 16 seats in the Lok Sabha, besides winning the state elections in Andhra Pradesh. The other NDA ally is Janata Dal (United) led by Bihar chief minister Nitish Kumar, which had either won or was ahead in 12 seats.

“The election results signify the victory of democracy… the people of India did not give a clear mandate to any political party. The BJP sought votes in the name of one person, one face (Prime Minister Narendra Modi). It is clear, this is not a mandate for Modi ji,” Congress president Mallikarjun Kharge said at a press meet.

“I applaud the political wisdom displayed by voters of Uttar Pradesh (UP),” said Rahul Gandhi, Congress leader and its former president, responding to the results. “The UP voter understood the politics of India, realized the threat to the Constitution and voted to protect it,” he added.

Pitched battle

The 2024 general elections were a pitched battle which the BJP contested with its usual nationalist-religious pitch coupled with ‘Modi’s Guarantee’—a slogan showcasing signature welfare schemes around housing, cooking fuel and free food. The Congress promised an annual cash transfer of 1 lakh to a woman member of every poor family and a farm loan waiver, among others.

BJP’s sub-optimal show comes at a time when Indian economy has put up an enviable show. It continues to be the fastest growing large economy in the world, clocking a gross domestic product (GDP) growth of 8.2% in FY24.

But this growth, if the electoral outcome is any indication, has not positively impacted everyone. Consumption demand has been skewed pointing to an unequal post-covid recovery and private consumption growth at 4% is lowest in two decades, excluding the pandemic years.

The import of the verdict is more political and economic, said Sunil Kumar Sinha, senior director and principal economist, India Ratings. “The new government will have to focus not just on headline growth numbers but whether this growth is reaching all strata of the society. Consumption is happening among the top 50% but for sustained economic growth it should reach all. People are looking for jobs and those opportunities should be created.”

Eyes on reforms 

Economists expect growth to slow down to around 6.5% in FY25 due to headwinds and a high base effect. For India’s rapid growth to sustain, strong policy interventions are needed. “With the economy doing well on all fronts, it does appear that it will be business as usual for the country,” said Madan Sabnavis, chief economist, Bank of Baroda. Existing policies and reforms will continue and there is fiscal space to accommodate extra expense on social welfare or capital expenditure, without compromising on fiscal deficit, he added.

Emkay Global in its research report, however, said that “reforms like those related to land, agriculture and labour are now off the table”. Not surprisingly, the stock markets took a beating. The BSE Sensex fell by 4389 points to close at 72,079, worried over the stability of the new government and its impact on the Indian economy, and making investors poorer by 31 trillion. Emkay Global expects the market derating to continue in the short term as risks are higher.

While BJP may have under-performed nationally, it did make significant gains in some states. In Odisha, it has not only swept the Lok Sabha seats, but is for the first time set to form the government in the state after the party conclusively defeated Biju Janata Dal. In Andhra Pradesh, it has swept the state in alliance with Telugu Desam Party and Jana Sena.

In Tamil Nadu, BJP failed to open its account, but saw its vote share rise to 11% from earlier 3.7% (2019). The party also won its first ever Lok Sabha seat from Kerala.

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