Reuters: Indian Prime Minister Narendra Modi is expected to be sworn-in for a record-equalling third term on June 8, after key allies pledged their continued support a day after a humbling election verdict that saw his party lose its majority in parliament.
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 in 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 be attending the meeting in Delhi today,” Chandrababu Naidu, the leader of the TDP, told reporters, referring to a meeting of the BJP-led alliance scheduled to take place later in the day.
Modi tendered his resignation on Wednesday to President Droupadi Murmu after the federal cabinet met and recommended the dissolution of parliament, the first of many constitutional formalities 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 which could slow India’s fiscal tightening, ratings agency Moody’s said.
Both regional allies, the TDP and JD-(U), are considered pragmatists on economic policy, but Modi’s new government is likely to need to find money to fund more spending on welfare projects in their states.
The weakened majority for Modi’s alliance could pose challenges for the more ambitious elements of the government’s reform agenda, ratings agency Fitch said.
However, it added: “Despite the slimmer majority, we do expect broad policy continuity to persist, with the government retaining its focus on its capex push, ease of doing business measures, and gradual fiscal consolidation.”
The closer-than-expected election should increase the prospect of productive reforms, the country’s chief economic adviser the country’s chief economic adviser said on Wednesday.
