Confidence in Narendra Modi runs high despite state poll challenges, says Jefferies

Prime Minister Narendra Modi

Confidence in Prime Minister Narendra Modi runs high ahead of the national elections in May 2024, despite the Bharatiya Janata Party's (BJP) loss in Karnataka and anticipated challenges in Chhattisgarh, Madhya Pradesh and Rajasthan polls scheduled for December 2023, suggests Jefferies.

In his Greed & Fear note, Chris Wood of Jefferies asserted that despite the recent victory of the Congress Party in Karnataka on May 10, the prevailing belief is that Modi and the BJP government will be re-elected in the upcoming elections, albeit potentially with a shrinking majority.

In the previous general elections held in 2019, the BJP won 303 out of 543 elected seats in the Lok Sabha. This time around, pundits estimate that the BJP may secure around 270 seats. It is important to note that state elections, like the one in Karnataka, often revolve around local issues and incumbents in Karnataka have not been re-elected since 1985. In contrast, national elections tend to centre around broader concerns, and Modi's transformative changes during his tenure have been widely recognised.

Wood, in his Greed & Fear newsletter, praised Prime Minister Modi's emphasis on physical infrastructure development. He highlights that voters prioritise significant issues in national elections and commends Modi's remarkable achievements during his 10 years in power. He specifically acknowledges the focus on investing in infrastructure instead of entitlements, evident in the allocation of fiscal deficits in recent years.