India’s Modi Wins Decisive Mandate for Economic Reform

India’s conservative opposition wins an historic election victory under Narendra Modi’s leadership.

India’s conservative opposition decisively ousted the ruling Congress party in an election that concluded on Monday, results released on Friday showed. Narendra Modi, the chief minister of the western state Gujarat, won an absolute majority of the seats in the lower house of parliament for his Bharatiya Janata Party, giving him a clear mandate to push through economic reforms.

With most of the votes counted, Modi’s party had crossed the 272 seats needed for a majority in parliament. His alliance, which includes smaller right-wing parties, won almost 38 percent of the votes, giving it 318 seats.

Congress, by contrast, looked set to win less than fifty seats of its own, down from 206. Its United Progressive Alliance got less than 24 percent support nationwide.

The result was the party’s worst since India became independent in 1947 and a blow to the Nehru-Gandhi dynasty that has ruled the country almost without interruption since. A series of graft scandals, high inflation, at 8 percent, and a feeble economic policy turned voters to the Bharatiya Janata Party which promised to replicate Modi’s growth policies in Gujarat nationwide.

Unlike in other parts of India, electricity in Gujarat, which has a population of more than sixty million, runs 24 hours per day. With some forty ports and a prosperous petrochemical industry, the state handles 20 percent of India’s cargo and 80 percent of its oil imports. Its infrastructure is modern and reliable and consistently hailed by businessmen as one of the reasons for investing in the state; the others being its efficient regulatory regime and the absence of major corruption.

Being able to govern without coalition partners, Modi is expected to usher in sweeping economic reforms, including infrastructure investments and opening the country up to international investment and trade.

Betting on a Modi victory, foreign investors had poured more than $16 billion into Indian stocks and bonds before the results were announced. The country’s benchmark stock index jumped 6 percent on Friday and the rupee broke below 59 to the dollar, an eleven month high.

The Bharatiya Janata Party does lack a majority in the upper house of parliament where it will need the backing of centrist and leftist parties to enact legislation.

With turnout over 66 percent, more than 551 million Indians participated in the election, making it the largest in history.