BJP's defeat in West Bengal may be seen as referendum on Centre's handling of COVID-19 : Nomura

File photo of Home Minister Amit Shah, who campaigned in Bidhannagar constituency of Kolkata on April 13, 2021. Bidhannagar goes to the polls this Saturday, April 17, 2021. (Shutterstock)

The BJP's defeat in West Bengal may be seen as a referendum on the central government’s handling of the second wave of the pandemic, according to Nomura global Global Markets Research. However, it has added that the economic and policy implications of the latest elections may be scant.

To put the Nomura statement into context, the number of new daily cases nationwide has remained above the 3-lakh mark for the past 12 straight days and an acute shortage of oxygen has dogged almost all major states.

On the other hand, even after running a spirited campaign across the 8 phases of the West Bengal elections which included dozens of roadshows by Prime Minister Narendra Modi and Home Minister Amit Shah, the BJP has been restricted to a tally of 77 in the state's 293 seat assembly. Incumbent Trinamul Congress had picked up the rest 213 seats.

However, Nomura clarified that it did not expect any major change in policy direction as a result. "Overall, the BJP’s loss in WB may be seen as a referendum on the central government’s handling of the second wave outbreak, although we believe state elections are mostly influenced by a host of local factors. We also do not expect a shift in policies (towards more populism) as a result of these state elections," it said.

On the legislative agenda, however, the latest state election results are expected to help the BJP. The composition of the Upper House (the Rajya Sabha) is influenced by the lay of the land of state legislative assemblies. Currently, the BJP holds around 95 of 245 seats (9 seats are vacant), while its coalition, the National Democratic Alliance (NDA), holds 117 seats, still shy of the halfway mark of 123 seats.

"The BJP currently holds zero seats from West Bengal’s share of 16 seats in the Rajya Sabha. Its recent performance – in which it was able to win one-third of the WB state assembly – will allow it to increase its seat count; we estimate that 11 WB seats will come up for reelection by 2024 (when the BJP’s term ends)," Nomura said.

However, Nomura has pointed out that the loss for BJP’s ally, AIADMK in Tamil Nadu will also mean some erosion in its current count of 8 seats. "Overall, we believe that the state elections will allow the NDA to incrementally increase its seat share in the Rajya Sabha, although it will probably struggle to cross the simple majority mark (of 123)," it said.

However, this may end up being a non-factor, as it has established working relationships with non-allied parties in recent legislatures, giving it the requisite numbers to pass legislative bills.