Bihar: A loss in the state today can turn attention to Modi govt's policies

The opposition alliance in the eastern state of Bihar looks set to win a crucial election in a blow to India’s Prime Minister Narendra Modi, whose party was a key partner in the ruling coalition.

The state will count votes from the three-stage election on Tuesday and most exit polls have shown citizens rejecting the ruling coalition in favor of a new opposition alliance led by a charismatic 31-year-old politician.

Bihar is India’s poorest state, but with a population larger than any nation in the European Union it sends 40 lawmakers to federal parliament, giving it outsize political importance. Losing the state amid soaring unemployment and an economy experiencing the sharpest dive in decades will be a setback for Modi, who invested a lot of political capital in the campaign.

The state is currently governed by Nitish Kumar of the Janata Dal (United) party who has ruled for three straight terms. But in the face of an anti-incumbency wave Modi was the main campaigner, addressing more than a dozen rallies across the province despite pandemic restrictions. His Bharatiya Janata Party entered an alliance with Kumar’s party after the last elections in 2015.

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If confirmed, the loss is likely to turn attention to Modi’s policies -- including setting in motion the world’s strictest virus lockdown -- and embolden the opposition to question his handling of India’s pandemic. The stay-at-home order and the job losses it triggered led to an exodus of poor migrant workers, over 1.5 million from Bihar alone, from India’s big cities. With more than 8.5 million cases, India’s virus infections trail only the U.S.

The spotlight is now on Tejashwi Yadav, the youthful leader of the Rashtriya Janata Dal party and the chief ministerial candidate of the opposition alliance. A one-time cricketer and the son of a former chief minister, Yadav sought to win over younger voters with the promise of a million government jobs. Bihar’s unemployment rate has climbed to 12% -- almost double that of the national average of 6.7% -- since the lockdown.

“A loss will also put pressure on the center to concentrate more on populist policies that give a fillip to job creation,” said Ajay Bodke, chief executive officer for portfolio management services at Prabhudas Lilladher Pvt. “With a massive shortfall in tax revenues and divestment proceeds due to economic slowdown as a result of Covid-19 pandemic, the government needs to expedite structural reforms hobbling medium-term growth which are bound to create backlash among sections of society.”

The BJP has been facing tougher-than-expected battles in the state polls that have followed Modi’s sweeping victory to a second term in office in May 2019. Its alliance in Maharashtra, India’s wealthiest state, fell apart soon after polls there last year. It lost power in Rajasthan and Jharkhand and had to cobble together a new coalition in the northern Haryana state.