Last week’s election of a pro-growth party in India will give China a run for the money.
On Friday, India’s Election Commission announced that the Bharatiya Janata Party had swept the five-week election for the Lok Sabha, the lower house of Parliament. The BJP exceeded already high expectations by winning an absolute majority, capturing 282 of 543 seats. With coalition partners, the party will control 337 seats.
The Indian National Congress, which has dominated the world’s most populous democracy since independence in 1947, suffered its worst electoral defeat ever. Congress took just 44 seats. Prime Minister Manmohan Singh resigned on Saturday.
In the Indian political context, the biggest loser was Rahul Gandhi, who would have replaced Singh had Congress been successful at the polls. His heart obviously wasn’t in continuing his family’s hold on power, however. Gandhi’s campaigning was lackluster and a confirmation of the notion that four generations in any one line of endeavor is at least one too many. His future at the helm of the storied party is in doubt.
Gandhi is not the biggest loser overall, however. That honor belongs to Beijing, because it’s certain that in the coming years direct foreign investment will head to India instead of China. For a Chinese economy needing outside cash, the redirection will not come at a worse time.
In India, times could not be better for the BJP. Its win was the most decisive since 1984, when Congress’s Rajiv Gandhi won after the assassination of Prime Minister Indira Gandhi, his mother and Rahul’s grandmother.
As a result of the landslide, the BJP’s charismatic Narendra Modi formally takes over Wednesday as India’s 14th prime minister.
Modi ran on a platform of fundamental economic reform, promising to do for all of India what he accomplished as chief minister of the western state of Gujarat, where with liberal policies he engineered a boom. “He provided Gujarat with India’s first real free-market economy that led to new infrastructure and job creation,” says Subrata Mukherjee, a retired political science professor at Delhi University.
As the Wall Street Journal’s Geeta Anand and Gordon Fairclough report, voters like Congress Party subsidies and giveaways but voted for Modi because they wanted India to become one big Gujarat. The breath of the BJP victory, therefore, signals a change in the mentality of a country, a clear rejection of the socialism of its founders.