05/13/2014, 00.00
INDIA
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India: exit polls indicate Narendra Modi as new prime minister

Exit polls point to a landslide victory of the Hindu nationalist Bharatiya Janata Party (BJP), but the official results will be released on May 16. The regional parties – ahead in Tamil Nadu and West Bengal - can make a difference. Markets respond well to Modi’s possible success, but seem to forget the BJP’s failed economic polices.

New Delhi (AsiaNews ) - Six different exit polls give victory to the coalition led by the Hindu nationalist Bharatiya Janata Party (BJP) in the general elections which ended yesterday, and indicate its leader Narendra Modi as the new Prime Minister of India. Analysts and political commentators leave little room for doubt, and the only question seems to be how many seats the BJP will take home, with the most pessimistic putting the party at 249 seats, the best 340. They only need 272 seats to form a government: if no one formation reaches an absolute majority, regional parties will be key. The official results will be released on May 16.

According to the same exit polls the Congress Party - in government over the last 20 years - emerges badly defeated: the seats won may vary between a minimum of 70 to a maximum of 148.

The markets seem ready to dialogue with the new government whose power base rests on Hindu nationalists. After the exit polls Indian equities rose in record time: now the S&P BSE Sensex (India's main stock index - ed) is up by 1.7% and the rupee has reached the highest value in the last nine months. Analysts explain that many investors believe Modi will boost the third largest economy - and the second for inflation - in Asia.

This confidence depends on two factors. On the one hand there is the so-called "Gujarat model" that the leader of the BJP has promised to establish at the national level. In his 13 years as chief minister of the western state, Modi has made pro - investor economic growth his trademark. But these successes coincided with the economic boom of the whole nation, when the Gujarat already enjoyed a general well-being. Also in the same period the State recorded one of the lowest levels in the field of social development: the large investment came at the expense of the majority of the population, further marginalizing and penalizing lower castes and religious minorities.

On the other hand there are the promises betrayed by the outgoing government, which has failed to implement key reforms in economic matters and effective measures to curb the rampant corruption. However, to be fair in many cases, it was the BJP - now acclaimed by the market - that obstructed the passage of some economic reforms: the case of the opening of the retail market to foreign supermarkets, or approval of the Food Security Bill, to reduce hunger in the country.

Interviewed by Bloomberg S. Chandrasekharan, director of the South Asia Analysis Group, however, recommend people wait for the official results before celebrating. "There has to be an element of caution because their track record at previous elections has been poor. They're better at predicting the direction rather than the precise number of seats "

This analysis rings true if you look more closely at these predictions. In important states (for size and number of seats) like Tamil Nadu or West Bengal neither the Congress nor the BJP seem to have gained the majority. In the first head of state, the All India Dravida Munnetra Kazhagam (AIADMK ) led by J. Jayalalithaa , the current chief minister is ahead . In the second the All India Trinamool Congress, of the current Chief Minister Mamata Banerjee has taken the majority.

 

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