Implications of Indian Elections

The parliamentary elections in India are coming to a close next week, and the results will be out on the 16th May.

It is the world’s largest elections with 814M registered voters, and capable of completely transforming the future of India which has been at its inflection point (in terms of economy) over the past year, having slid from well over 7% to just under 5% in GDP growth rate – a massive slide for what could become the world’s third largest economy. More than that statistics, what is important is the figure on the number of millions of poor folks that a faster economic growth could potentially lift out of poverty.

While the implications for India itself are huge in terms of what happens with the election results, the external implications cannot be ignored.

For one, The U.S. will be forced to deal with a prime minister who has been declined a visa to visit the U.S. for the past 9 years. China would encounter that the new prime minister could be a tougher nut to crack than the incumbent, and far more openly assertive. South East Asia would have a new friend in place. European Union would have a tougher time, as its focus on the environment would cross swords with a development-minded prime minister who would pull no punches. Russia may not be happy, as the new prime minister would be a rightist liberal with more inclination to work with democracies such as Israel and the U.K.

While it would be very interesting to see how Mr Modi defines his new job in the days to come, one of my assessments is that he would not succumb to entreaties from Pakistan. He will take a very firm anti-terror line that would put the Chief Minister of Jammu & Kashmir State into trouble. Another assessment is that he would not push for the Ram Temple construction, contrary to popular perceptions. He would seek out broader support from society as he intends to re-build the country from the disasters which have afflicted over the past decade or so.

The country would find itself more assertive on the world stage.

A permanent seat in the UN Security Council would not be a far-fetched idea anymore.

Secularism will come to the forefront again contrary to popular misconceptions. India is a secular country and will always remain so. There is a clear possibility that the GDP growth rate will rise towards 8%, the foreign exchange reserves will move towards the USD 500B mark, and trade will shift in India’s favour. Manufacturing and infrastructure investments will multiply very soon.

There is one downside though. And, that is, it will be a one-man rule. Mr Modi is unlikely to brook dissent and tolerate interference from whoever it is. He will set a goal and relentlessly chase it. Good or bad, that’s how it is going to be for the next few years. Especially so, if he manages to win absolute majority in the Parliament.

The Indian elections have huge implications. Let us see how these play out in the coming days.

(Note: I am an apolitical observer of India – I support neither Congress nor the BJP. I also do not support the AAP – Coomon Man’s Party).


Vijay Srinivasan
11th May 2014


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