- The NDA won 293 seats in the 543-member Lok Sabha.
- Modi's own victory in Varanasi was moderate.
- “We are with the NDA,” says Chandrababu Naidu of the TDP.
Indian Prime Minister Narendra Modi is expected to be sworn in for an unprecedented third term on June 8, after key allies pledged their continued support a day after a humiliating election verdict in which his party lost its majority in the Parlament.
Modi, a populist who has dominated Indian politics since coming to power in 2014, will for the first time need the support of regional allies whose loyalties have wavered over the years, which could complicate the government's reform agenda.
On Wednesday, two allies of his National Democratic Alliance coalition, the Telugu Desam Party, a key regional player in the southern state of Andhra Pradesh, and the Janata Dal (United), which rules the northern state of Bihar, pledged their support.
“We are with the NDA, I will attend the meeting in Delhi today,” TDP leader Chandrababu Naidu told reporters, referring to a meeting of the BJP-led alliance scheduled for later in the day.
The federal cabinet met on Wednesday morning and recommended the dissolution of parliament, a constitutional formality before Modi can form a new government.
Modi and his new cabinet were scheduled to be sworn in on Saturday, local media reported.
The NDA won 293 seats in the 543-member lower house of parliament, more than the 272 needed to form a government.
Modi's BJP won 240 seats on its own, a weakened verdict that could slow India's fiscal adjustment, ratings agency Moody's said.
Modi's weakened alliance majority could pose challenges to the most ambitious elements of the government's reform agenda, ratings agency Fitch said.
However, he added: “Despite the smaller majority, we expect broad policy continuity to persist, with the government maintaining its focus on its capital spending drive, ease of doing business measures and gradual fiscal consolidation.”
Rural setbacks
With the party losing more ground in rural areas, investors say land and labor reforms, which were expected to unlock value and growth, will likely fall by the wayside.
Newspapers said Modi's aura had dimmed, with the Indian Express headline reading: “India gives NDA third term, Modi a message.”
Modi's own victory in his seat of Varanasi, considered one of the most sacred cities for Hindus, was moderate: his margin of victory fell from almost 500,000 votes in the last general election in 2019 to just over 150,000.
But this reduced victory may not necessarily mean a paralysis of reforms, said the chairman of a government finance panel, Arvind Panagariya, in an editorial in the Economic Times newspaper.
“Despite the reduced majority in parliament, the necessary reforms are entirely feasible. Achieving sustained growth at an accelerated pace can only strengthen the government's position in the years to come,” he said.
The opposition alliance INDIA, led by Rahul Gandhi's centrist Congress party, won 230 seats, more than expected. The Congress alone won 99, almost double the 52 it won in 2019, a surprise jump that is expected to improve Gandhi's position.
The INDIA alliance was also expected to meet in New Delhi on Wednesday and discuss a future course of action.
