It’s vote counting day in India’s election, the most hotly contested in decades and the world’s biggest festival of democracy.
We’re bringing you live updates through the day as the results come in. Narendra Modi of the Hindu nationalist Bharatiya Janata Party is celebrating what looks like a landslide victory, with the latest count putting the BJP ahead in 277 seats, beyond the 272 required for a majority in the lower house. Outgoing PM Manmohan Singh has congratulated Modi on his victory.
Updates by Avantika Chilkoti, Mumbai reporter, with the FT India team.
Good morning, votes are now being counted and we will keep you updated throughout the day as results trickle in from across India.
India’s vast and powerful diaspora has watched the election closely. This from the FT’s Anjli Raval, in New York :
At Times Square in New York dozens of non-resident Indians are gathered under a big screen television and an “India’s future is being decided” banner waiting for the count. The group of mainly businessmen, some wearing saffron, are largely supporters of Narendra Modi.
“India is ready for change. We’ve seen what’s happened in Gujarat and we need that for the rest of India. A strong leadership is needed,” said Sanjay Amin, 50, who works in the IT sector and has lived in New York for the last 27 years. “India has great talent, and lots of resources that need to be put to use. We will get there.”
“Modi saab zindabaad,” shouted another. “Modi is going to win”.
For those who want to quickly catch up on the unpredictable politics in the world’s largest democracy, here is some recommended reading :
- A graphic that walks you through the basics
- An opinion piece from the Indian Express this morning
- An old but insightful piece on Narendra Modi, who is expected to usher in a new age of development in India
- And the controversial views of the Economist, which had India up in arms just weeks ago.
Very early reports have begun to filter in from particular seats, with news channels extrapolating what they might mean, as in this tweet from the chief executive of cable channel NDTV:
A word of caution from Rajeeva Karandikar, a pollster, who says these early reports can be a badly misleading representation of the overall result:
“You can’t read too much into these early reports…Many of the early trends being reported are based on postal ballot counts, which are highly non-representative and often are less than 100 – armed forces personnel and those on election duty cast their votes by postal ballot,” he says.
“So until 10 or 11 o’clock you have to be very careful. There was one concrete instance a few years ago in a state election where the trends were completely wrong until 11am, when everything turned around and showed something different.”
The equity markets are at record highs, rallying the most in five years, and the rupee is up sharply – let the tamasha (madness) begin.
The benchmark Sensex is up 4.5 per cent at 24,997.47 , while the Nifty is up 4.6 per cent at 7,453.50 . And the rupee has crossed 59 to the US dollar.
From the FT’s David Keohane:
The Nifty has crossed the 7,500 mark. Modi mania.
For those who think the market’s reaction may be premature. Rajeeva Karandikar , a pollster, says it straight:
“Based on what is now reported on the Election Commission website, the National Democratic Alliance is now sure to cross half way mark of 272 seats. This means Modi is sure to be Prime Minister.”
For those who don’t know what to make of the seat counts as they begin to trickle in, Barclays explains the possible outcomes for the BJP-led National Democratic Alliance. Remember, there are 543 elected seats in the lower house of parliament:
As votes come in, we are keeping track of the Election Commission count, which says the opposition BJP is leading in 250 of 485 constituencies. At the moment it looks like a landslide, with the Congress leading in just 49 .
The Times of India says the race is over:
Economists are cheering. Shubhada Rao , chief economist of Yes Bank, told us:
“A spectacular outcome. A three decade long wait for such a stupendous majority spells great things for the economy… The government now needs to step on the gas in taking sensible decisions, something that has been missing for years now.”
Amitabh Dubey , director of India research at Trusted Sources, the emerging market researchers:
“It’s quite clear the BJP is heading for a historic performance at a scale that is at the high end of its hopes. It shows there has been a massive vote shift in their favour. I would say this is a combination of economic aspiration but also communal polarisation in the Hindi heartland.”
The Election Commission says that – so far – the BJP has vote share of 36 per cent and the Congress 24.6 per cent.
Arnab Goswami on Times Now says that Rahul Gandhi is leading by only 2,179 votes in Amethi – which has successively chosen members of Congress’ Gandhi family to represent it in parliament. Dynastic politics is dying in India.
High praise for Modi before the count is even over:
The fan mail streams in:
“We concede that the people of India have spoken and we will humbly accept the verdict and perform the role assigned to us as a responsible opposition,” Randeep Surjewala, a Congress spokesman, told Headlines Today.
And Narendra Modi gracefully accepts:
And the Election Commission agrees too, with that golden number of 272 shining bright for the BJP.
The latest updates show that the BJP is ahead in 275 constituencies of 533, while the Congress is leading in just 52. With 543 elected seats in the lower house of parliament, it looks like the opposition is set to come to power with a strong mandate.
India’s business tycoons are cheering for the pro-business Narendra Modi. Leading the pack is Vijay Mallya , the mercurial Indian alcohol baron:
The FT’s India team remind us, however, that not everyone will be celebrating this evening.
Indian liberals and many members of its Muslim minority are anxious about Mr Modi’s rapid rise to power, recalling the murder of hundreds of Muslims by Hindu mobs in the 2002 riots in Gujarat, where Mr Modi had just become chief minister.
Mr Modi and the BJP, however, have played down exclusively Hindu causes in the campaign and focused largely on the need for an economic revival in India after years of high inflation and slowing growth.
“This election surely is a tectonic shift in the polity of India,” said Ravi Shankar Prasad, a BJP spokesman. “I have rarely seen this overpowering desire for change. There was a deep sense of agony, distress and dismay among the people of India over how they were governed.”
Narendra Modi has called on his mother, Heeraben, to seek her blessing. He touched her feet, in front of neighbours and other family members.
Modi is known to have rather limited, and somewhat strained relations with his family. But the live TV feed appeared to show Heeraben taking the opportunity of the rare visit to deliver a vigorous message to her son.
“No matter how much a son rises, he always has to get a lecture from his mother,” a TV anchor quipped.
For those further west, just waking up and keen to catch up on Indian politics – the fat lady is yet to sing but the leading man has, indeed, tweeted.
Narendra Modi is rejoicing on Twitter, as the vote count streams in and India’s mammoth general election draws to a close.
By the latest tally from the Election Commission data, the BJP is leading in 275 of 534 constituencies as the counting continues, while the Congress is ahead in just 50 .
That puts the BJP comfortably across the 272 figure, which marks a majority in India’s lower house of parliament.
India’s economists and tycoons are cheering on the pro-business leader, while the market rallies.
The benchmark Sensex index is up 3.6 per cent at 24,770.78 and the rupee is at 58.92 to the US dollar.
The analysts have begun to chime in, commenting on the prospect of a strong BJP-led government. This just landed in our inbox from HSBC :
From a macroeconomic perspective this is a positive outcome. The strong mandate will enable the new government to be formed relatively quickly, which will help reduce political uncertainty. The mandate also gives the government the political muscle to move forward structural reforms, desperately needed to bring about a sustained recovery in growth. Given the Modi-led government’s likely emphasis on enhancing infrastructure, we also expect that investment projects will be rolled out at a somewhat faster pace, which will help gradually de-bottleneck the economy.
However, it is important to be realistic about the pace of political and economic change, at least in the nearer term. The new government will not be able to change things overnight and the recovery in GDP growth will likely prove protracted, possibly even move sideways in the near term until we have measurable progress on reforms and investment projects. The reason for this slow turnaround is that the economy is saddled with structural constraints and it is a lengthy process to lift these.
The FT’s James Crabtree and David Keohane are at BJP HQ in Gujarat, reporting on the celebrations:
And celebrate they will:
No pressure, Modi-ji:
“A clear mandate is positive for India”, Sidharth Birla, president of the The Federation of Indian Chambers of Commerce and Industry, said in an emailed statement.
“It is amply clear that the country, especially the youth, wants development and good governance… FICCI hopes that this mandate will help the leadership restore much needed investor confidence, attract higher investments and generate employment, especially in the manufacturing sector.”
The BJP’s trademark saffron and lotus symbol colour the scene, at the party HQ in Gujarat:
This from the FT’s James Crabtree and David Keohane at BJP HQ:
The mood at BJP headquarters in Gandhinagar, just outside of Ahmedebad, was predictably raucous as supporters of India’s BJP celebrated a landslide result for the party and the country’s next prime minister Narendra Modi. At one stage a man wearing a Narendra Modi mask told your correspondents that Modi-ji would be making a visit to the hq later in the afternoon. We took him at face value and will report back later.
Ecstatic scenes at BJP HQ
It’s not the real Narendra Modi, but he’s just as happy…
Incoming, from the FT’s Victor Mallet in New Delhi:
Jubilant supporters of Narendra Modi have massed at the Bharatiya Janata Party’s headquarters on Ashoka road in the wealthy part of the capital known as Lutyens Delhi. As well as drummers and brass bands, a pair of elephants – with the BJP’s lotus symbol painted on their ears – have been brought in to join the celebrations.
The latest dispatch from the FT’s James Crabtree in Gujarat:
Scenes of noisy celebration began early at the BJP’s headquarters close to Narendra Modi’s residence in Gandhinagar, just outside Ahmedabad, capital of his home state of Gujarat.
Party workers gathered inside dressed in saffron scarfs and bright orange t-shirts bearing Modi’s image, cheering as television screens showed their party passing the crucial 272 seat mark, ensuring victory in the nationwide vote.
“He [Modi] has caught the mood and expectation of the people like no leader since 1947,” said Hamanth Bhatt, a party supporter from the state. “People were fed up with Congress… now the people are delighted, they have never seen a victory like this.”
Hundreds of supporters danced outside, waving flags and chanting songs outside the recently-opened four story building, celebrating an unexpectedly resounding victory against a backdrop of exploding firecrackers and confetti.
Vipin Joshi, president of a local division of the BJP, said the victory would have particular resonance in Gujarat, where Modi has presided over years of strong economic growth as chief minister, and where he is projected to win a clean sweep of all 26 parliamentary seats.
“Modi has done well for development in Gujarat, and he will do the same for India,” he said. “A son of Gujarat will become Prime Minister, and this has released huge pride among the people.”
The FT’s David Keohane is just about keeping his act together
The party mood at BJP HQ
Nandan Nilekani, the billionaire founder of IT outsourcing group Infosys, made headlines when he announced he would stand for the Congress party in Bangalore South. Now, he has conceded defeat, according to local TV channel, Times Now.
This from the FT’s James Crabtree some weeks ago:
Some believe Nilekani has his sights set on the very highest office, and though he denies that his ultimate aspiration is to lead India, he talks like a man eager for the national stage. “The fundamental strategic benefits of India are still there,” he says, reeling off a familiar list of the country’s strengths that includes its youthful population and widespread English-language skills. “India’s challenge is more execution.” He cites another billionaire-turned-politician, Michael Bloomberg, the former mayor of New York, as his inspiration. “It’s all about the plumbing … You can’t be an agitator, you have got to get in and solve the whole problem, knock heads together.”
If you’re a journalist at BHP HQ, you WILL get decked out in safron
Victor Mallet sends us some street scenes from New Delhi. The Modi party is in full swing.
The election commission has the BJP ahead in 277 seats. A thumping victory and what should be a powerful mandate. In those constituencies where the count has been completed, the BJP has won 7.
A flavour of the celebrations at BJP HQ, courtesy of David Keohane
Everyone’s celebrating – especially those who own shares in Adani Enterprises.
This from the FT’s James Crabtree some weeks back:
There is an easy conspiratorial conclusion here. Mr Adani’s business empire is based mostly in the western state of Gujarat, where Mr Modi is chief minister. The rapid rise in Mr Adani’s fortunes over the last decade, meanwhile, has dovetailed nicely with that of his state’s most senior politician.
Enough with the ever-changing data on who’s leading where. Now the Election Commission is coming out with solid results and the BJP has won seven of the 10 seats where we currently have a final tally.
The Congress has a single seat so far.
Wondering whose win everyone in India is celebrating? Check out some of the FT’s coverage of the controversial Narendra Modi over time. From the top:
At the BJP headquarters in New Delhi, Rajnath Singh, the party president, appealed to the organisation’s grassroots workers to be magnanimous in victory. “Don’t shout any provocative slogans. Celebrate with decency and humility,” he said.
In the last fiscal year New Delhi was doing all it could to meet financial targets on everything from the fiscal deficit to the current account. The big fear was that the rating agencies would downgrade Indian paper ahead of the polls.
Now we have reaction to today’s events from Thomas Rookmaaker, director of the sovereign ratings group at Fitch Ratings.
While Fitch has never taken a view on the next government’s party colour, a government with a clear mandate reduces uncertainty and increases the chances of decisive policy action to address the economic challenges India faces. We will see whether the new government takes those chances.
The most salient issue for the new government from a sovereign credit perspective seems to get growth back to higher sustainable levels, which would require a strong pick up in investments. The investment climate could be strengthened by a number of measures, including: i) a clear strategy for fiscal consolidation, enhancing fiscal credibility, ii) creation of a low-inflation environment, and iii) a new structural reform push, that could include reforms related to governance, infrastructure bottlenecks and reduction of red tape.
With all the excitement around Narendra Modi, let’s not forget the other big story in Indian politics. The anti-corruption Aam Aadmi , or Common Man, Party.
And it looks disappointing for them, as the fledgling party is leading in only four of 526 seats, according to the Election Commission. Still to win a seat.
Was that a short honeymoon? Investors seem to be grabbing profits after Friday’s huge ramp up in share prices. Here’s the Sensex index, courtesy of S&P Capital IQ:
The demise of the Congress party is being seen as India’s rejection of corruption and dynastic politics:
“After 1984 this is the first time that a political party has a clear majority in India,” Rajnath Singh, the BJP president, said at a press conference. “The time has come to rewrite the India success story.”
The international arena once frowned on Narendra Modi, after anti-Muslim riots in 2002 under his watch in Gujarat. Today, that seems to be forgotten:
It was up, up and up for Narendra Modi, the pro-business BJP candidate, today. Not quite the same for India’s cheering markets. With markets closed, time for another chart:
Rahul Gandhi is making a statement to the public, with his mother Sonia Gandhi , wishing the new government all the best and blaming himself, as vice-president of the Congress party, for the defeat.
Rahul Gandhi said in English: “The Congress party has done pretty badly and there’s a lot for us to think about.”
His mother Sonia, speaking in Hindi, also accepted defeat and urged the incoming BJP government to uphold national unity. “We believe victory and defeat are part of life in a democracy,” she said. “The mandate is against us and our party, and we accept the defeat with humility but we hope that the government that comes into power in the centre will not compromise the country’s unity and social fabric.”
The victory of Narendra Modi and the BJP has been discussed at length for weeks. Now is the time to look forward. What does India need? And how will Modi govern this vast and troubled economy?
“Equity is about faith in future, and faith in future can not rest on anything but governance – on predictability,” Vallabh Bhansali of Enam Securities, told Bloomberg TV.
Having led Gujarat for over a decade, Modi will change the relationship between the states and the centre:
“India is only the states, there is no India beyond the states, so how can you rule like the owner of states?” Bhansali added. “There is a tectonic shift and you are going to see change.”
The success of Gujarat under his leadership may be replicated in the centre.
“The point was that the bureaucracy worked in Gujarat and people who wanted to get something done could get it done.”
How about Modi’s leadership style?
“He seems to say – I’m not a policy champion, I am an implementation champion,” according to Bhansali. “He believes that most of the bureaucrats are competent… So he is going to say, look, let’s all decide policy together, I’m not someone with divine knowledge.”
Reaction just in from ANZ :
Now that the BJP party seems to have comfortably crossed the half-way mark (i.e 272 of total 543) by itself, it won’t have to rely on additional tricky partners (other than some of the existing partners that form the NDA coalition) to form the government. The new government will have to tread carefully because expectations will move higher and there’ll be few excuses for them to shirk away from implementing at least some ‘big bang’ reforms…
What will be key is for this win to be followed up with sound policy actions. As highlighted in the note, we believe that the initial moves by the new government are likely to pick ‘low-hanging fruit’ for eg. Speeding up clearances for some large, stalled projects.
Nice chart from ANZ :
An update from the Election Commission: results out for 108 constituencies and the BJP has 71 .
From Dinesh Thakkar, chairman of Mumbai-based Angel Broking:
This is an unprecedented election result and something that the markets are rightly rejoicing. A strong stable mandate was the need of the hour and it has been delivered even more decisively than the markets had hoped for. There is well-grounded expectation that the new government will usher in strong pro-reform policies and kick-start the investment cycle. More importantly, given the crucial phase that we are in of India’s demographic dividend, the key now is that the new government delivers on the aspirations of one of the largest and fastest growing youth populations in the world and catalyses a meaningful and long-term up-move in the economy’s GDP growth trajectory. In this backdrop, Indian equities are likely to be amongst the best-performing asset classes over the medium-term.
Alternate title: three hours in the sun and all I got was this lousy photo.
Alternate by-line: David Keohane, somewhere extremely close to Narendra Modi, Gujarat.
The huge crowd of Modi supporters who waited for hours in the Gujarati sun were finally rewarded just before 5pm when Narendra Modi, India’s new prime minister, pulled up at BJP HQ in Gandhinagar. He looked calm amid a throng who surged forward at the sight of him, chanting his name and throwing your correspondent’s camera angle off.
Tick-tock, tick-tock…that’s the BJP gaining seats. The official count is now 103 seats for the BJP of the 152 constituencies where we have results already. Just 12 for the Congress.
Vote shares: 32.3 per cent versus 20 per cent.
What’s the Hindi for ‘rout’?
Most retweeted selfie of the day, apparently. For all those who remember Andy Murray’s little gaffe when he won the Wimbledon title:
S&P chimes in:
Standard & Poor’s Ratings Services expects the new India government’s reform initiatives in economic and fiscal policies in the next two to three months may have significant implications on the sovereign credit rating on India (BBB-/Negative/A-3)…
In our view, NDA’s strong showing indicates that it will have a reasonably good political platform to tackle structural issues.
“What the next government says and does in the coming months is crucial to boosting confidence in the policy settings and the economy,” said Standard & Poor’s credit analyst Takahira Ogawa. “If confidence rises, investment and consumption in India could strengthen, after being held back by the uncertainty surrounding the election.”
Victorious Narendra Modi addresses a roaring crowd: “I thank people of Vadodara for helping me win with a record margin of 570,000 votes,” he says. “I salute people of Vadodara.”
This, from UBS:
The question now is whether there is still room for Indian assets to push higher. In a market where positions across EM are as close to neutral as we have seen in a long time, investors’ positioning in Indian equities and FX is already long (less so in Indian debt). The central bank has indicated that it doesn’t intend to use the rupee to fight inflation and will instead build FX reserves. As UBS’ India economist, Ed Teather has noted, the INR is not cheap any longer in real effective exchange rate terms.Combined, do these factors close out the case for rally? We would have thought so, but not with this political mandate.The ‘hope’ is that a strong and reform oriented government at the centre (along with a very able central bank) will be able to reverse the low growth, high inflation mix that India has suffered in the last few years.
“No matter where Modi is he is aware of your problems,” India’s incoming leader, Narendra Modi, bellows at a chanting crowd.
Next up, Moody’s:
Expectations that the BJP would win a considerable majority and pursue policies conducive to investment and economic growth contributed to the more than 17% rise in the BSE Sensex in the three months leading up to the announcement of election results. Foreign portfolio inflows appear to have helped drive this increase, as well as the 4% appreciation of the rupee against the US dollar since the beginning of the year. Both equity markets and the value of the rupee rose further as election results were announced on May 16.
However, economic trends will take longer to improve than sentiment did. Economic data published so far this year reveals that industrial output is still weak (it declined by 0.5% on an annual basis in March). Moreover, inflation remains elevated (at 8.6% in April), limiting the scope for monetary stimulus to revive growth. Nonetheless, industrial momentum could pick up in the second half of the year, as stalled investment resumes and consumer confidence increases.
Clean sweep for the BJP in Modi’s home state of Gujarat, says Times Now, the local TV channel.
Cheer from Ajay Argal, investment manager, Baring India Fund:
Once formed, we expect the new government will move early to capitalise on the momentum of its victory to push forward a policy agenda that includes a raft of reforms to improve social equality, governance and the overall economic and business environment. That said, Mr Modi is likely to take a pragmatic, long-term view with his plans for reform. He has continually employed the slogan “Give me 60 months” throughout the campaign, and he may even be thinking longer term than this.
We are encouraged by the election result and believe that it supports India’s economic growth story. After a period of exuberance surrounding the election, we may see consolidation in the Indian equity market over the short term as investors adjust to the post-election landscape. The immediate reaction of the market was to rise on the news of the election result, followed by a degree of profit taking. Regardless of such short-term movements, it is our view that the economy and financial markets will benefit from an economic upturn over the next 18 to 24 months.
“The people of India have hit a triple century,” Narendra Modi says in his first address after the Congress accepted defeat. “They have given 300 plus [seats] to NDA [National Democratic Alliance].”
“I am labourer number one,” says Narendra Modi, the tea stall worker who has toppled India’s Nehru-Gandhi dynasty in one of the biggest wins in India’s political history.
The Eurasia Group’s take:
The BJP today became the first party to win an outright majority in a general election since 1984, when the Congress party won a landslide victory in the wake of the assassination of Prime Minister Indira Gandhi. In stark contrast to the BJP’s best-ever performance – winning or leading in 283 seats – Congress, hitherto India’s dominant political force, was humiliatingly rejected, turning in its worst-ever performance by winning or leading in only 45 seats. The BJP’s resounding mandate means that it will not have to rely on opportunistic state and regional governments to form a coalition government, brightening the prospects for constructive cabinet decision-making. But while the BJP will now also easily pass reform legislation in the lower house, Congress will retain a plurality in the upper house for at least two years. Dynamics in the upper house, where the state and regional parties provide swing votes, will now be a key variable determining the advancement of the new government’s reform agenda.
An update from the official Election Commission count, though the Indian media have been flashing complete figures for hours:
The BJP has 204 of the 327 seats where final results have been announced, while the Congress has only 31.
The BJP’s vote share currently stands at 31.5 per cent while the Congress trail behind with 19.6 per cent.
In India’s commercial capital of Mumbai, analysts and economists are excitedly emailing around their views on the staggering election results.
Go out into the historical centre of the city and the largely Muslim neighbourhood around the FT bureau, however, and it’s just a quiet Friday night. A stark comparison with the excitement around the political centres in New Delhi and Gujarat:
Sam Gupta, chief executive of Grand Trunk Capital Management, says:
This is comparable to the election of Ronald Reagan in the U.S. or Margaret Thatcher in the U.K. in terms if the pro-business stance we expect the Modi government will take. For investors in India like us, we are very excited about the opportunities this presents. India is still an emerging market and will be volatile, but as change takes shape there are some very promising investment opportunities in the short to medium term.
This from David Keohane:
After the celebration, noise and enthusiasm of the pro-Modi rally at BJP headquarters in Gandhinagar near Ahmedabad in Gujarat, the disquiet in Juhapura, the city’s largest Muslim area, was particularly noticeable.
In comparison with the Modi supporters we had spoken to earlier, the people we met in Juhapura talked of polarised communities, fear, and economic opportunity which had passed them by. Memories of communal riots in 2002 and fears of the BJP’s Hindu nationalist side were close to the surface.
Modi’s victory both reminded them of the limited political choices that faced them and, in a darkly comic way, allowed them to cheer his departure from the job of chief minister of the state.
Time to sign off. As the sun goes down in Mumbai, it has been a thrilling day in India. If you caught a whiff of any conversation on any street, it involved a number: ’272′, ’543′, ’100′.
But as we all wind down and look for a quiet corner to take stock of this labyrinthine and unpredictable democracy, we will have to do it without the lubrication of a drink. Few bars in few cities are serving liquor, in an attempt to maintain public order.
So a quick glance of what’s changed in the last 12 hours will do, in that case:
- The Nehru-Gandhi dynasty has crumbled, suggesting that India is done with dynastic politics and won’t stand for weak governance and widespread corruption.
- Narendra Modi, the controversial candidate for the Hindu nationalist BJP, has secured the largest majority in the lower house of parliament in 30 years, fuelling hopes of a strong turnaround for India’s crippled economy.
- The urban middle-class who had such high hopes for the anti-corruption Aam Aadmi Party and its leader, Arvind Kejriwal, have been reminded that this is just a fledgling party which failed to govern in the state of Delhi. The party currently has just 4 of the 349 constituencies where the Election Commission has provided a final result.
- The importance of social media in the world’s largest democracy is no longer open for debate, as Narendra Modi’s first acknowledgment of victory came via Twitter, and a photograph of him and his mother became the most retweeted post of the day.
- (Oh, plus the stock market is up 1 per cent, and one dollar is worth just 58.78 rupees.)