Stock markets should be happy to see Nitish Kumar jumping back into the NDA court in the middle of the match.
Unless Nitish plans to return to the Opposition, the 2019 Lok Sabha election will be a walkover for the saffron team and Rahul Gandhi is incapable of cutting short Narendra Modi's victory march. First, for foreign investors looking at India, this may be good news. The return of Modi in 2019 will mean a continuity of key policies initiated by the NDA government, and a stable and predictable political environment at the Centre. It means a lot for the moneybags.
Secondly, the anti-corruption drive will continue. One major takeaway from Modi’s three years of rule is that there have been no corruption cases involving Central ministers. This is a relief since the UPA regime was infamous for back-to-back scams and corruption cases involving allies that put India on the back foot globally. Modi has embarked on a battle against corruption cases involving politicians, money-launderers and crony capitalists. By giving investigators a free hand to chase the corrupt, the Modi government has sent out a strong signal to the political-corporate nexus that has played a significant role in damaging the economy.
The work of this nexus can be felt in most of the ills that the economy is facing now — high bank bad loans, the consequent reluctance of banks to take fresh investment commitments and cases of missing government funds intended for public projects. Modi’s return will give hope to investors that clean-up process will continue and that there aren’t any hidden pits in the Indian economy.
Modi's idea of "cooperative federalism" will work more smoothly as BJP slowly spreads its power across more states or secures significant say in the state governments. The BJP and its allies now rule over 70 percent of the country's population and its alliance is in power in seven of the 12 states that send 20 or more MPs to the Lok Sabha. Even regional parties such as the AIADMK and BJD have been favourably disposed to the saffron camp. The influence of the Congress, meanwhile, has been reduced to just one big state: Karnataka.
The implementation of key initiatives such as Goods and Services Tax (GST), labour reforms, the Aadhaar programme, fight against bad loans, major divestment initiatives including those in sick PSUs such as Air India, will see continuity if the BJP returns to power.
Stock markets have always loved Modi. Ever since he came to power through a landslide victory in May 2014, the BSE Sensex has gained over 30 percent while Nifty has jumped by 36 percent. Foreign Institutional Investors have been net buyers (around $23 billion). In fact, stock markets began to have a great run ever since Modi was named the NDA's prime ministerial candidate.
Ever since the 2014 General Election, there has been no turning back for the former Gujarat chief minister.
The record victory in Uttar Pradesh and just-executed political sabotage in Bihar have been major moves for the saffron cadre. The Opposition dream of a 'Mahagathbandhan' as a counter to the BJP's victory march in 2019 has fallen flat with Nitish's googly. With this, the Congress-led Opposition faces the serious problem of not having a credible face to show as its prime ministerial candidate for 2019. The developments of the past week offer what looks like a near-walkover for Modi in the 2019 election.
However, the other side of the story is that India is moving towards a situation where, for all intents and purposes, there is no strong political Opposition on the national-level to question Modi’s policies. As CPM leader Sitaram Yechury said, the BJP seems to be targetting an Opposition-mukt Bharat rather than a Congress-mukt Bharat. This isn't a good scenario either as the disappearance of voices to question the government's actions and wrong policies is dangerous.
The Congress is shattered, the Left has become redundant fighting an identity crisis and regional satraps are fighting for their very survival — in most cases, haunted by the ghost of their own past deeds. There is virtually no Opposition in India to challenge Modi’s policies. This is not good news for any democracy, as it is vital to have a powerful Opposition that can scrutinise and question the government’s steps. Once again, the independent media will have to take up the role of principal scrutiniser.
Updated Date: Jul 28, 2017 13:48 PM