BJP falls short of majority in tight race

The Bharatiya Janata Party (BJP) fell short of the majority mark of 272 out of the total 543 seats on Tuesday but appeared set to return for a third term in power.

The National Democratic Alliance (NDA), led by the BJP, which had made the “abki baar, 400 paar” (400 seats this time) slogan its poll plank, fell way short of target, with its leads and wins hovering around the 300-mark.

The opposition INDIA bloc, led by the Indian National Congress, was leading in about 230 seats, defying most exit poll projections.

At 4pm on Tuesday, the BJP alone was leading in 244 seats, lower than the 303 that it had won in the 2019 general election. The party lost most seats in Uttar Pradesh, Haryana, and Rajasthan, while making strong gains in Odisha and Telangana. The party won or was leading in all seats in Himachal Pradesh, Uttarakhand, and Delhi.

In Varanasi, Modi was leading with a margin of 152,355 votes, while Congress leader Rahul Gandhi, who contested from two seats, was leading by 388,742 votes in Raebareli and 364,422 votes in Wayanad.

In 2019, Modi had won Varanasi with a margin of about 480,000 votes.

The possibility of a lack of a majority by the BJP on its own spooked investors as the benchmark indices Sensex and Nifty declined about 6% each in Tuesday’s session. While the Sensex index of 30 stocks slipped 5.74% to 72,079.05, the broader Nifty 50 index fell 5.93% to 21,884.5. Bonds and the rupee also tumbled as the actual results failed to match up to exit poll predictions.

Support from two key pre-poll allies of the BJP — the Telugu Desam Party (TDP) in Andhra Pradesh state and the Janata Dal-United (JDU) in Bihar — is key if the party is to retain power.

As of 4pm, the TDP was leading in 16 seats and the JDU in 14, taking the trio’s combined seat share past the halfway mark.

Incumbent Prime Minister Narendra Modi and home minister Amit Shah reportedly spoke to TDP chief Chandrababu Naidu on Tuesday afternoon in a bid to shore up support for the alliance.

The leader of the JDU and Bihar chief minister Nitish Kumar had arrived in Delhi on Monday and met Modi at his residence to discuss the state government’s demand for special status and a special package for the state.

The lack of a majority for the BJP could pose a major hurdle for the incoming government’s reforms push.

Government estimates showed the economy grew by a higher-than-expected 8.2% in fiscal 2024, while GDP growth in the January-to-March quarter eased to a four-quarter low of 7.8%.

The government’s fiscal deficit for FY24 was recorded at 5.6% of gross domestic product (GDP), lower than the revised estimate of 5.8%.

Last month, the board of the Reserve Bank of India (RBI) had approved the transfer of a record ₹2.11 trillion (about $25 billion), more than double of what was budgeted, as surplus to the central government for accounting year 2023-24.

The higher RBI dividend is expected to help the new government that is expected to come in next month fund the fiscal deficit of 5.1% of gross domestic product in the current fiscal. The windfall is also expected to boost government spending to spur growth.

Meanwhile, in the assembly polls of Odisha and Andhra Pradesh, the TDP, allied with the BJP and the Jana Sena Party, won a landslide victory. The alliance has won or is leading in 164 seats of the total 175 seats in the state.

In Odisha state, the BJP is seen gaining power for the first time by winning 80 of the 140 seats in the state on its own. It broke with its former alliance partner the Biju Janata Dal (BJD) just ahead of polls. The BJD won 47 seats, the Congress 15, independent candidates three and the Communist Party of India-Marxist (CPM) one seat.