INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Narendra Modi-led BJP may retain power in the 2019 elections, but the magical majority mark may remain elusive for the saffron
This is how many of the foreign brokerages are reading India’s electoral arithmetic in a changed political climate
They see anti-incumbency and opposition unity are key threats to Modi’s ambition for a second term, as they can potentially cut on BJP
seats vis-à-vis its 2014 kitty
Brokerage CLSA has projected a loss of 10-80 seats for the BJP in the 2019 elections
Nomura India in a July pegged BJP/NDA’s total seats in a wide range of 181-308 seats, the midpoint of which stands at 245, 27 short of a
UBS in May said the stock market's multiples were probably pricing in a Modi win in 2019.
Stock investors will be keenly following the
political developments in the runup to the election, as poll outcome had often taken the market by surprise in the past
In 2004, opinion polls had indicated a repeat mandate for the Vajpayee-led NDA
BJP was so confident in 2004 and called an early election, showcasing its work through an ‘India Shining’ campaign, CLSA noted
But India elected a Manmohan Singh-led government to rule India for the next decade
In 2009 election, the Congress returned with a better
mandate than that in 2004, with the party along with its allies winning 261 of the 543 seats – the best result by any party since 1991
In 2014 too, the BJP winning 282 seats on its own surprised one and all, CLSA noted.
How the market reacted to the previous three
electionsThe brokerage said if Modi were to lose the election, it would have a big sentimental impact on domestic investors, which can also
impact domestic flows, thus becoming a negating factor for the Indian market
However, it expects the position of BJP and its allies will strengthen to 44 per cent of Upper House by 2020, which will make legislative
business tough should India vote a non-BJP government to power.
8 key states to watchCLSA says eight key states may cost BJP more than 50
Out of them, Madhya Pradesh, UP, Gujarat and Rajasthan accounted for 147 BJP seats in 2014, or 52 per cent of all that BJP won
Vote share in these four states stood at 49 per cent but they accounted for 80 per cent of the seats.
“The party clearly gained from the
Modi wave, where he was able to swing significant vote share in his/BJP’s favour
Equally, a split in non-BJP votes among several opposition parties helped, particularly in UP and partially in MP
Combined with the other large four states of Maharashtra, Jharkhand, Haryana and Chhattisgarh, the party won 201 of the 282 seats in 2014
A potential vote-share swing, either due to anti-incumbency or other reasons, could have a large overall impact,” CLSA said.
These eight
states together accounted for 201, or 71 per cent, of BJP’s seats won in last general election
Many were won with large margins and can be considered strongholds that the party is unlikely to lose, CLSA said.
“We did a simple
scenario analysis - if BJP’s vote share drops by 5 percentage points, with those votes going to the second-best candidate/party in that
particular constituency, then its tally in these eight states would fall by 39 seats
This analysis doesn’t include any impact of a possible unity among the opposition parties,” it said
Opposition unity, which is largely restricted to UP, could result in a loss of 50 seats for BJP even without any vote swing, the brokerage
The shortcoming of this analysis is that it doesn’t take into account the impact and political inclinations of an estimated 10-12 per cent
more voters who will exercise franchise in the 2019 elections, it said
The chances of a big increase in the BJP tally in Tamil Nadu, West
Bengal, Kerala, Odisha, Andhra Pradesh, Telangana and the northeast, excluding Assam, appear limited as the BJP’s expansion here is still
work in progress, CLSA said.
