Modi’s Landslide Victory A stunning win in state elections gives India new reform momentum.
https://www.wsj.com/articles/modis-landslide-victory-1489446301
India’s ruling Bharatiya Janata Party and its allies won a remarkable 80% of the assembly seats in Uttar Pradesh, the country’s most populous state, in election results announced on Saturday. This political earthquake will boost Prime Minister Narendra Modi’s chances of re-election in 2019 and give him a fresh chance to advance economic reforms.
The opposition Congress Party and its allies thought Mr. Modi crippled his party’s chances when he withdrew almost 90% of the country’s banknotes last November. The resulting chaos hit the poor hard and slowed the economy. But voters saw the move as necessary to tackle corruption, crime and tax evasion.
It is tempting to attribute the BJP’s wins in Uttar Pradesh and two other states to Mr. Modi’s promises to reinvigorate manufacturing and create jobs. But Mr. Modi said little about economic reform in his stump speeches. Instead he focused on development broadly, making government more responsive to the poor and continuing the anticorruption campaign.
As always, caste played an important role. Mr. Modi’s strategist Amit Shah handpicked the candidates for each constituency rather than using the usual party loyalists and quota-fillers. Fresh faces from backward castes drew votes from these key communities, even as the BJP delivered a message of pan-Hindu unity and rejection of the incumbent Samajwadi Party’s caste-based politics.
That shrewd coordination shows the importance of a strong national leader. By contrast, Congress is saddled with Rahul Gandhi, whose indecisiveness and lack of charisma have left the party rudderless. Congress won in Punjab only because the incumbent BJP-allied Akali Dal Party saw its support collapse after communal violence.
The question is whether Mr. Modi will use some of his political capital to jump-start reform immediately or wait until after 2019. Mr. Modi has been stymied by the BJP’s lack of a majority in Parliament’s upper house, which is largely selected by state assemblies.
Saturday’s wins will increase the government’s leverage in the upper house, but only after a delay. Uttar Pradesh is not due to replace its legislators until April 2018. By then the looming general election will put much-needed but unpopular changes to labor laws and land acquisition on hold.
While big-ticket reform is unlikely in the short run, Saturday’s results suggest an ongoing shift in Indian politics. Mr. Modi continues to sell a vision of “new India” in which government removes obstacles to the poor improving their own lives. This is a clear break from Congress’s politics of handouts and special privileges.
Mr. Modi will likely use his renewed political capital over the next two years to tackle several bottlenecks in the economy. The state banks need recapitalization so that private companies can borrow and invest. Construction of roads and railways still lags demand.
But only by undertaking far-reaching deregulation can the government meet its goal of expanding manufacturing to 25% of the economy in 2020 from the current 16%. And without that industrial boom, India can’t create jobs for a labor force that adds a million new workers every month. Without bolder action he can’t deliver the opportunities he promised.
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