Narendra Modi pledged to work for the poor in an emotional speech yesterday as he moved a step closer to becoming India’s prime minister.
“The government should think of the poor, hear them and live for them,” Modi told Bharatiya Janata Party (BJP) MPs in New Delhi, pausing to wipe away tears at one point.
Modi’s party won the first majority in 30 years last week after his message of development resonated across social divisions in a country with a third of the world’s poor.
Subdued economic growth and Asia’s second-fastest rate of inflation have eroded the purchasing power of the more than 800 million Indians who live on less than $2 (about R20) a day, according to the World Bank.
Modi would probably be sworn in on Saturday because the date coincided with a day Hindus considered auspicious, the Hindustan Times reported on Monday,
“It’s a historic day for us,” BJP President Rajnath Singh told MPs.
India’s Sensex stock index closed little changed yesterday and the rupee fell 0.1 percent to 58.6625 to the dollar. The yield on the 10-year government bond eased to 8.84 percent from 8.86 percent the previous day.
Backroom talks are continuing for cabinet positions. Modi’s government will face the challenge of boosting an economy growing at close to the slowest pace in a decade while averting a sovereign rating downgrade and handling territorial disputes with neighbouring nations.
Arun Jaitley, a former trade minister, is the frontrunner to become finance minister even though he failed to win a seat in the lower house of parliament, according to two senior party leaders, who asked not to be identified because the discussions were private.
The BJP-led bloc won 336 of the 543 seats up for grabs, with the party alone winning 282. The outgoing Congress-led alliance garnered 59 and smaller regional parties took 148 seats.
“The overwhelming election mandate implies a stable government, significant legislative firepower and no excuses,” Rohini Malkani, an economist at Citigroup in Mumbai, wrote in a research report.
“The government now needs to deliver and we believe it can, given its economic emphasis, stable composition and decisive governing structure.”
Economic growth would accelerate to 5.4 percent in the year to March from 4.4 percent in the previous 12 months, the International Monetary Fund predicted last month.
The Indian government estimated that gross domestic product grew 4.9 percent in the 12 months to March, near the previous year’s 4.5 percent, the slowest in a decade.
Voters punished the Congress party for the slowdown, as well as for an inflation rate exceeding 8 percent and corruption scandals. Modi campaigned on his record of bringing stronger-than-average economic growth to Gujarat, the state he has run since 2001.
The Gandhi family retained control of the Congress party despite its worst electoral defeat, underscoring the lack of alternatives in an organisation that has governed the country for most of its history.
Congress’s highest decision-making body on Monday rejected offers to resign from Sonia Gandhi, the party’s president, and her son Rahul Gandhi, its vice-president.
Modi’s policies over the next few months would have significant implications for the nation’s credit rating, Standard & Poor’s said last week.
The rating agency had said it might downgrade India’s sovereign rating to junk status if the next government was unable to revive growth.
“The agenda of the government in the first 100 days will be important to maintain positive momentum,” Radhika Rao, an economist at DBS Bank in Singapore, said on Monday.
The BJP’s decisive win “will pave the way for swift decision-making and implementation of reform measures”, she said.
– Bloomberg