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India’s Congress Plots Government Shape After Election Triumph

Other News Materials 17 May 2009 14:33 (UTC +04:00)

India's triumphant Congress party discussed who to invite to join a new government, a day after storming to the biggest election victory since 1991.

Prime Minister Manmohan Singh met today with senior party leaders at the New Delhi residence of Congress leader Sonia Gandhi, spokesman Janardan Dwivedi said. Singh, 76, only needs the support of 12 lawmakers outside the current coalition for a parliamentary majority, compared with exit-poll predictions of 60 or more, reported Bloomberg.

Fewer coalition partners will give Singh a freer hand to engineer an economic recovery. Former communist allies lost more than half their seats, removing their ability to block plans to sell state-owned companies and raise foreign-investment caps.

"It's good that we will have stability," said J.J. Irani, a director at Mumbai-based Tata Steel Ltd., India's biggest steelmaker. "This time Dr. Singh will not have the coalition constraints so he will be able to pursue policies of liberalization."

Congress and its allies won 260 of the 541 lower-house seats for which results have been declared. Congress alone will have 205 lawmakers, 60 more than in 2004 and almost twice as many as the main opposition Bharatiya Janata Party. Counting in two final constituencies will be held today.

The victory margin may help extend the nation's longest stock rally in three years. India's Sensitive Index climbed 23 percent this year to 12,173.42 and the Nifty Index rose 24 percent to 3,671.65.

"The Nifty can cross 4,000 within a week and the Sensex can touch 14,000 by June-end," said Devesh Kumar, managing director of Mumbai-based Centrum Broking Pvt.

Singh's re-election ensures political continuity in India, whose support is needed by the Obama administration in its fight against militancy in Pakistan and Afghanistan. While Singh froze ties with nuclear-armed Pakistan after last November's attacks on Mumbai by 10 Pakistani gunmen, the BJP had called for a complete severing of relations.

For the BJP, led by 81-year-old Lal Krishna Advani, the defeat may force a rethink of an ideology that places Hindu values as paramount. The party built itself into a national force from the late 1980s with a campaign to construct a temple on the site of an ancient mosque, polarizing public opinion.

Changing Politics

Arun Jaitley, a BJP leader, congratulated Congress at a New Delhi press conference yesterday. The party will co-operate with the next government in opposition, he said.

Singh, who was flanked at his victory press briefing yesterday by Gandhi, said he would like her son, Rahul, to join the next Cabinet. The 38-year-old son and grandson of assassinated prime ministers was the party's most visible campaigner, picking young candidates to attract first-time voters.

"My job as I see it now is changing the politics of the country through the youngsters," who comprise 70 percent of India's 1.2 billion population, Rahul Gandhi said in remarks broadcast yesterday on Indian news channels.

The counting of 430 million ballots was the culmination of a five-week election that required 834,000 polling stations from the snow-capped Himalayas to tropical islands in the Bay of Bengal.

Congress campaigned on a pledge to supply cheap rice and wheat in a nation where 828 million people subsist on less than $2 a day, according to the World Bank. The government has waived loans for farmers, invested in rural roads and introduced special job programs to shore up popular support.

"It's a case of good economic policies getting converted into good politics," said Chandra Prakash Bhambri, a professor of politics at the Jawaharlal Nehru University in New Delhi. "Congress didn't ignore the rural areas. The rural jobs program was the best scheme, which helped about 40 million people."

Congress has emphasized rural development as a means of reviving India's $1.2 trillion economy, which has been buffeted by the global recession. The economy may grow 6 percent this year, the weakest pace since 2003, according to the central bank.

Singh will be able to proceed with plans to ease foreign investments in insurance and banking should he form a government without the support of communists, key allies in 2004. The two sides parted ways in July after four years of wrangling on issues ranging from allowing retailers including Wal-Mart Stores Inc. into the country to increased foreign ownership of insurers.

The main communist party won only 16 seats, less than 43 it gained in the last election, the commission said.

"Now the government has no excuse not to perform. It can't say it's being dragged down by the communist party," said Professor Rajat Kathuria of the Indian Council for Research on International Economic Relations

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