India’s National Election: Surprise and Stability

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The results of the election for India’s powerful lower house of parliament, or Lok Sabha, were released today. The winning party or coalition of parties in this election choose the prime minister and form the government. Contrary to expectations and polling, the incumbent Bharatiya Janata Party (BJP) government, led by Prime Minister Narendra Modi, will fall short of a third consecutive single-party majority. Still, Modi is expected to remain head of government as leader of a coalition, though there is a scramble underway by opposition parties to try and pull away the BJP’s likely coalition partners.

India’s economic and security drivers will remain unchanged. However, a coalition government will often take big decisions more slowly and be less inclined to push states to meet national objectives in areas like the energy transition.

Q1: What would a BJP-led coalition government mean for India’s economic reform priorities?

A1: The core drivers behind the Modi government’s economic strategy of the last decade will remain unchanged, irrespective of who holds key positions in the government. India has a very high goods trade deficit, touching 10 percent of gross domestic product (GDP) some years. And India’s agriculture labor force—nearly half of all labor in the nation—is shifting to cities and seeking formal, low-skilled employment. Whatever the final result of this election and cabinet formation, any government would need to look at policies that meet these driving concerns.

Pushing tough reforms, especially those requiring legislative change, will likely be more difficult for a coalition government. An example includes a much-needed streamlining of India’s relatively new Goods and Services Tax (GST), which created a national value-added tax but did not initially include key sectors like petroleum, alcohol, and real estate.

Q2: Will this result change India’s evolving security partnerships, particularly its closer cooperation with the United States?

A2: The key driver behind India’s evolving web of security partnerships will remain the same—an increasingly belligerent China. The United States’ willingness to share advanced weapons systems, contribute to India’s domestic defense manufacturing, and offer assistance during periods of military tension with China provides a strong foundation that should withstand political change.

The Modi government’s likely coalition partners do not tend to have strong anti-Western sentiments, unlike some of the coalition partners of the National Congress–led United Progressive Alliance (UPA) government in its first term (2004–2009). These parties do not attempt to have separate policies related to neighbors, unlike political parties in some of India’s states with international borders, such as the Trinamool Congress in West Bengal or the DMK and AIADMK parties in Tamil Nadu.

Q3: What impact will these results have on India’s development trajectory?

A3: This election result will likely slow India’s overall development trajectory in two key ways. First, the Modi government has done well in rolling out major national programs to improve the delivery of basic services like digital payments, access to toilets, drinking water, and electric power. A weaker government may have less ability to drive such major projects.

Second, the Modi government’s attempts to push states to compete, called “cooperative-competitive federalism,” will be more difficult to push in a coalition environment. Regional parties that are vital to the coalition may not like to see their independence eroded in such a way, or to find themselves at the bottom of different development rankings the government has published in the past.

In particular, the Modi government’s goal of installing 450 gigawatts of renewable electric power by 2030 may be more difficult. Ultimately, state governments have the final say on the types of electric power that feed into their grids. And attempts by the central government to reform India’s poorly performing state-run electricity utilities may face fiercer headwinds.

Q4: Is this good news for champions of India’s liberal values?

A4: This election, even if Prime Minister Modi retains power, shows the power of India’s democracy. Despite the Modi government’s control over key levers of power in the nation for a decade and its world-class political marketing program, voters can be difficult to hold for long periods.

Another positive aspect is that this election should blunt any attempts by the BJP to push ahead with any messaging or policy actions that contribute to religious tensions. Some of the BJP’s more significant coalition partners rely partly on Muslim votes.

Richard M. Rossow is a senior adviser and holds the Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies in Washington, D.C.