Home >politics >policy >Assembly poll victory enhances Jayalalithaa, Mamata clout with Centre

New Delhi: Prime Minister Narendra Modi’s party was poised for a lone election victory in five Indian states holding roughly a fifth of the population, which confirmed the strength of the nation’s regional power brokers and the decline of the once-powerful Congress party.

Modi’s Bharatiya Janata Party (BJP) was leading or had won in 87 of the 126 assembly seats in Assam, according to the Election Commission of India. The plurality would be the BJP’s first-ever victory in the region, and mark a loss for the Congress party, which had ruled Assam for the last 15 years.

Regional parties wwill control four other states that fall outside the BJP’s Hindi-speaking strongholds. Two potential kingmakers in national elections—Mamata Banerjee in West Bengal and J. Jayalalithaa in Tamil Nadu—will hold onto power. The Congress party has lost the southern state of Kerala to a Communist-led bloc but earned a majority in Puducherry.

The results are a morale boost for Modi and a setback for Congress ahead of possible elections next year in seven of India’s 29 states—including Uttar Pradesh, the most populous. They also confirm that regional parties will continue to have a crucial swing vote on Modi’s economic proposals in the Rajya Sabha, the Upper House of Parliament, where members are determined by state election results.

For more than a year, the Upper House has blocked passage of a national sales tax, which aims to unify more than a dozen levies that hinder trade across state lines. Modi has been more successful with other measures, including an overhaul of bankruptcy laws that passed this month.

Modi’s party has a good working relationship with regional leaders and will seek to woo them to isolate Congress to pass the goods-and-services tax and other reforms, according to U.R. Bhat, director at Dalton Capital Advisors India Pvt., a unit of UK-based Dalton Strategic Partnership LLP.

“It will re-energize the party and the government to go ahead and do whatever they set out to achieve in a meaningful way," he said.

The election results impacted the share prices of two Chennai-based television stations. Sun TV Network Ltd, which is linked to the party losing in Tamil Nadu, fell 11% in its biggest tumble since August. By contrast, Raj Television Network Ltd surged 17%, the most on record, on speculation that it would benefit from more market share.

West Bengal’s Banerjee—whose party is leading in 161 and has won in 52 of the 294 seats—reiterated support for Modi’s goods-and-services tax. Her party, which is backed by one of India’s largest Muslim populations, has accused Modi’s BJP of policies that stoke social strife.

“We have differences in ideology with BJP which is why we cannot be with them," Banerjee said at a briefing in Kolkata on Thursday. “We will support GST and anything that benefits people." Bloomberg

Rajhkumar K. Shaaw of Bloomberg contributed to this story.

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