Modi's Gujarat win doesn't mean he will rule India
Narendra Modi’s resounding election victory in the western Indian state of Gujarat has made Indian businessmen optimistic. Many see his win, the third in a row, as a sign that the centre-right leader with a reputation for effective administration could be ruling the nation in 2014. But a chequered past, an autocratic personality and the peculiarities of India’s coalition politics make Modi less than a shoo-in.
The result of the 2014 polls could be dramatically different from what investors are hoping for. A real possibility is that smaller regional parties come together to forge a weak, purposeless centre-left government – just to keep Modi out. Modi’s ambition to rule India has undoubtedly received a boost: His centre-right Bharatiya Janata Party’s winning tally in Gujarat, while falling just short of a two-thirds majority, was a big blow to Sonia Gandhi’s Congress party.
The Congress, which has ruled India since BJP’s shock defeat eight years ago, will most likely fight the next general election under the leadership of Sonia’s 42-year-old son Rahul, who doesn’t have a track record in governance. By contrast Modi, who is 62, has run Gujarat for 13 years, and even his detractors grudgingly admit that he hasn’t done a bad job in attracting investments to the state, creating jobs and clearing supply-side bottlenecks, especially in power.
But the BJP is reluctant to nominate Modi as its next prime ministerial candidate because of an unproven charge against him of abetting an anti-Muslim pogrom in 2002. That means he won’t be acceptable to coalition partners like Nitish Kumar, the chief minister of Bihar, for whom Muslim votes are important. If the coalition breaks up, a non-Congress, non-BJP “third front” of regional parties could emerge. Supported by the communists, the third front could undermine both the BJP and the Congress.
Modi’s Gujarat campaign was all about his achievements and his promises. His supporters believe that, as prime minister, he could craft pragmatic, pro-business policies and get them implemented by curmudgeonly bureaucrats. But in national politics, a personality cult is a liability. Modi’s autocratic style could render him unsuitable for managing a large, unwieldy coalition, which is what the next Indian government will most likely once again be.
12-15% dollar revenue growth does not justify one of 18x 1-year forward earnings: Analysts
Recent acquisitions will expand portfolio, allow cross-selling