Spelling tough times ahead for the ruling Congress party at the Centre, the Bahujan Samaj Party (BSP) won an unexpectedly emphatic mandate to govern Uttar Pradesh, India’s most populous and politically important state.
The clear victory for the BSP and Mayawati, the head of the party that supports the United Progressive Alliance government from the outside in Parliament, “will further erode the authority of the Congress, which has been on a losing streak,” says Pratap Bhanu Mehta, head of the Centre for Policy Research, a think tank.
Analysts pointed out that even as the BSP will help keep the Congress-led coalition in power, a more assertive BSP could spell trouble.
As an immediate fallout, the government is likely to go slow on any big-ticket reform measures. It had at the beginning of the Budget session of Parliament listed a slew of such measures, including labour market reforms. Mayawati’s win could also scramble the presidential election in July.
UP sends a seventh of all lawmakers to Parliament.
For its part, the Congress party failed to win even 25 seats, which the party had secured in 2002, despite active campaigning by Rahul Gandhi, the 36-year-old son of Congress president Sonia Gandhi.
This will be Mayawati’s fourth stint as Uttar Pradesh’s chief minister, after she had to resign from the coalition government in 2003, following an indictment by the Supreme Court in an alleged corruption case relating to illegal development in the vicinity of Taj Mahal. A probe into that case by the Central Bureau of Investigation continues.
The results, delivered after a marathon polling schedule that began 7 April, saw the BSP win or take firm lead in a total of 208 seats out of the 402 assembly seats for which polls were held.
Incumbent Samajwadi Party chief minister Mulayam Singh Yadav promptly resigned on Friday.
Along with the Congress, the Bharatiya Janata Party, India’s other major national party, was also relegated to a position of political insignificance in the state.
Mayawati “doesn’t need our support,” acknowledged Congress spokesperson Abhishek Singhvi. “The mandate is clearly for Mayawati to govern and for us to sit in the opposition. That’s what we will do.”
With Rahul Gandhi having led its campaign, the post-mortem within the Congress party is likely to look for other scapegoats for its defeat, especially economic policy issues such as inflation, which was widely credited for handing the party losses in two other states recently, Punjab and Uttarkhand.
The BSP is being handed over the reins to a state that has steadily slipped on development indices against national averages over the past two decades. According to the Central Statistical Organisation, the state’s annualized growth rate of real gross state domestic product at constant prices for 2000-01 to 2005-06 was 4.58%, compared with the national average of 6.77%.
The per capita state income for the same period was Rs12,145 against the national average of Rs25,825. The literacy rate, as per Census of India 2001, was 57.36%, against a national average of 64.80%.
The Confederation of Indian Industry’s (CII) ‘State Monitor for Uttar Pradesh’ points out that the state had the second highest loss of manpower in the country last year, with 137,000 mandays lost due to strikes and various other industrial commotions, accounting for a stupendous 28% of man days lost in the whole country.
CII plans to consult again and present a fresh blueprint to the new government.
Omkar Goswami, a former chief economist with CII, was more cautious than optimistic about prospects for the industry. “Only time will tell whether Mayawati has matured to being a leader who takes economic issues seriously,” he said. “Her previous stints give no such indication.”
Sugar futures were sharply higher on Friday, ignoring weak fundamentals, on expectations that a new regime in Uttar Pradesh, which is a major producer, would give new sops for the sector.
On the National Commodity and Derivatives Exchange Ltd, May sugar futures closed at Rs1,277 per 100kg, up 2.65%, after touching a high of Rs1,319. June futures rose about 3%.
(Reuters and Bloomberg contributed to this story.)