The impact of Bihar election results

Bihar election this time has been a political loss for Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) but may well pave the way for the core agenda of Indian economic growth. The result is a rude wake-up call for the party and the Government and may see certain course corrections before the coming winter session of the Parliament which is expected to commence on November 26.

The keenly contested election to the state Assembly of Bihar saw the coalition of caste-based regional political parties defeating the BJP, the Hindu right wing party that swept to rule India in May 2014. The result of this election is important both politically and economically for the country.

The Grand Coalition of JD (U), RJD, & Congress:   156

NDA led by BJP:    76

Others:    11

Nitish Kumar will continue to be Bihar Chief Minister for the third successive term.

Nitish Kumar will emerge as the principal opponent of Prime Minister Narendra Modi in the national election 2019. There will be a strong anti-BJP group in the Parliament. Nitish will be supported by the opposition Chief Ministers like Mamata Banerjee and Arvind Kejriwal.

Prime Minister Modi and BJP President Amit Shah will have to accommodate dissenters within the party as their ability to win an election has been considerably diluted with the Bihar result. Elections are due in Uttar Pradesh (2017), West Bengal and Assam (2016), and Kerala (2016).

Narendra Modi clearly lost his appeal to voters during the last 18 months in power. He needs to give a fresh look into his governance model. By addressing 31 rallies, Modi had in effect placed himself as the principal face against Chief Minister Nitish.

The regional parties in states like West Bengal, Uttar Pradesh, TamilNadu will bargain hard with the central government on policy matters. The Union Government will find it difficult to pass reform measures requiringParliamentary approval.

Prime Minister Modi will act fast on economic reforms and pay attention to implementation and less on announcing new schemes. The Government has three and half years more to deliver.

Drastic Cabinet reshuffle is expected with induction of capable ministers with a focus on delivery taking precedence.

Measures to bring in feel-good factor in the economy will see market sentiment improving and growth rate boosted. The much-needed speeding up of reform measures is expected.

The ongoing focus on “Ease of Doing Business” will intensify. Serious investors in India may now hope for a proactive Government machinery so as to invigorate the “Make in India” drive.

Some big but pending reforms like the introduction of GST will have to be pushed through with political consensus. The government will depend on good officers of Nitish Kumar to bring all on board.

There will be a rethinking on the Government’s media strategy. The constant negative reports have hurt BJP politically and are negating Modi’s effort to win foreign investment. Unless mature communication with quick response to any crisis situation is adopted Modi Government will lose its shine fast.

Policy measures will have more deliberations. The Government had been giving the impression that all measures are pushed through by a strong centrally-controlled authority. This does not go well in a democracy like India where media is powerful.

Prime Minister Modi won the national election in 2014 on the promise of bringing in development. The Government will fast track the measures and is expected to check suitably non-development related agenda sponsored by a culturally entrenched section of the party.