BJP's sweeping victory in the Hindi heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh has resulted in a positive opening for the stock markets. Experts speaking with Moneycontrol weigh in on the optimism in the markets a day after the saffron surge in three states and what the results mean for BJP and Congress in the upcoming 2024 General Elections.
Congress's take on state election results and 2024 strategy
Professor Rajeev Gowda, a former Rajya Sabha MP of the Congress, finds the Telangana election results significant. The faith reposed in Congress, especially after Karnataka, positions the party as a trusted one in another tech-savvy state, he said.
"Telangana result is tremendous and significant. After Karnataka, people have reposed faith in Congress to lead another tech state. Global markets look up to Bengaluru, which has a significant global presence. People have faith in Congress for job creation and innovative reforms," said Professor Rajeev Gowda speaking on whether the Telangana assembly election result is enough to cheer them.
He analysed Congress's vote share, noting that it has remained stable, and emphasised the need to work on measures that attract people. The shift in vote share from BSP to BJP is seen as an area for Congress to strategise, he stressed.
Expectations for 2024 and INDIA alliance dynamics
Discussing the upcoming 2024 elections, Professor Gowda sees a challenging situation for BJP in states where it is not dominant. He predicts difficulties for BJP in Bengal, and Karnataka, and strong resentment in Maharashtra. The focus, he suggested, should be on INDIA alliance members coming together against BJP.
Prof Rajeev Gowda said, "INDIA alliance is in many large populous states. It has several members in the Lok Sabha. What we have seen from the state assembly polls is that Congress' vote share has not diminished or changed a lot. The vote share that used to go to BSP has gone to BJP. It is for Congress to work out what measures attract the populations that do not go with BJP voters. This section of the population seems to have voted for BJP this time. BJP would find it difficult to cross double figures in Bengal. In Maharashtra, resentment against BJP is very strong over what they have conjured up there. In Karnataka, I do not see BJP coming close to last time's Lok Sabha futures. In states where BJP is not dominant, it will arise to a situation where it won't get a majority."
"In Karnataka, a very corrupt BJP government was defeated. Along with this, the schemes that we offered worked. If we see the Rajasthan result, I think voters are reverting to changing governments every five years. It is not about promises. We delivered on promises. So it is not exactly about welfare measures implementation," he added.
He also said, "We have to remember that when Modi came in 2014 he opposed GST and then changed course and implemented it. Food security is guaranteed for five more years and it means the fastest growing economy has 83 crore people who can't feed themselves. That means the majority of the population needs to have food daily. This is the reality of India under PM Modi and his brand. That means we need to do better. After the LPGs were given, how many people had to buy for a higher amount?"
On priorities for Congress for 2024, he said, "INDIA should come together. If Congress had won yesterday's state elections, all would have said it is just a state election and it won't have an impact on national elections. I reiterate these are state elections and national elections will have different results."
Saffron Surge boosts investor confidence
Nalin Mehta, Managing Editor, Moneycontrol, noted that the scale of BJP's victories in the Hindi heartland is not ordinary and that it indicated a trend for the 2024 elections. The markets interpret these results as a sign of stability. The significance of Rahul Gandhi's resurgence and Congress's win in Telangana and recently in Karnataka make these results noteworthy for the party, he said.
"The scale of BJP's victories in the Hindi heartland is not an ordinary one, it is kind of telling you about the 2024 elections. The markets are interpreting the results as stability. At the moment BJP is in pole position for 2024 elections," he said.
Brand Modi's impregnable image
Nalin Mehta also highlighted BJP's fighting-fit status in the Hindi heartland region, emphasising the impregnable image of Brand Modi.
"Often, state assembly elections are not an indicator for general elections, but this time it is significant because Rahul Gandhi has become resurgent and Congress has got its act together. It just won Karnataka and stakes were higher for Congress in the recent elections than for BJP. Congress's defeat in the Hindi heartland tells you that BJP is fighting fit in the region, brand Modi is impregnable, and Congress has not made a direct headway there. Markets are reacting to this," Mehta said on fantastic opening for the stock markets a day after a saffron surge in the state assembly election results, and whether there would be optimism going forward.
He emphasised that the victory is not necessarily a vote for Hindutva but a reflection of voters' confidence in parties that can deliver on promises. The impregnable image of brand Modi and BJP's fighting-fit position in the Hindi heartland region are seen as key factors influencing market behaviour, he added.
"I don't see this as a vote for Hindutva. It is a vote for parties voters think parties can deliver and a vote that voters think parties can't deliver. As far as welfare measures offered, every party is offering pretty much the same. Who the voter chooses depends on the momentum, motion and trustworthiness at that point in time. Those who wanted to get rid of BRS after 10 years, looked up to Congress. Congress looked like it could win the election. When there is only Modi's shadow in the state elections, imagine when he is the face of the 2024 general elections. BJP is well ahead at this moment," Nalin Mehta said.
Expectations for 2024 and INDIA alliance dynamics
Looking ahead to the 2024 elections, Mehta emphasised the importance of seat-sharing negotiations within the INDIA alliance. The recent election results are seen as reducing Congress's bargaining power, he noted. The Muslim consolidation behind Congress in Telangana and Karnataka is noted as a significant shift, he also said.
On what one big thing to watch out for before the 2024 elections, he said, "A lot of negotiations may happen over seat-sharing in the INDIA alliance. After yesterday's results, it is clear it has reduced the bargaining power of the Congress. In Telangana, we saw Muslim consolidation behind Congress. Muslim votes shifted from BRS to Congress. In Karnataka, too, Muslim votes shifted from JD(S) to Congress. Where Congress won, we saw that Muslim voters shifted from the regional part to Congress."
Analyst's take on political implications for 2024
Political analyst and psephologist Sanjay Kumar discussing the political implications of the state results, highlighted that Congress's defeat in the Hindi heartland signalled a challenging task for it to beat BJP in the region. With voters having little faith in Congress as a challenger to BJP in 2024, the saffron party will emerge even stronger in 2024, he noted.
When asked whether the state results will have political implications for the 2024 general elections for BJP and Congress, Kumar said, "If Congress had won one more state, that would have given the party confidence and acted like a morale boost. But, its defeat in the Hindi heartland states tells you that it is becoming difficult for the party to beat BJP in that region. Voters have little faith that Congress will be a challenger to BJP in 2024. Whether Congress would be resurgent for the 2024 election is out now with the state results. BJP was already strong for 2024 and now it is much stronger."
Freebies, voter preferences
On the effectiveness of freebies, Kumar noted that people seem more satisfied with welfare measures offered by the Union government than those provided by state governments. High confidence in PM Modi played a role in this preference, he emphasised and added the 2024 general election results depend on how well the INDIA alliance can work out a seat-sharing agreement.
"There are expectations from the state government generally. It seems people are more satisfied with measures offered by the central government than the freebies offered by the state government. People have high confidence in PM Modi. The PM's connect in Karnataka is not as good as it is in the Hindi heartland states. With schemes, parties no more win elections, they are just icing on the cake. Schemes have limited effect. What differentiates is that promises made by PM Modi himself have much more weight. If you look at the vote shares of the parties, everyone's declined and BJP improved its vote share," Kumar said on why the freebies worked for Congress in Karnataka and not in Rajasthan, why Ashok Gehlot's many promises did not give the party the result.
"If the INDIA alliance comes up with a good seat-sharing arrangement, it can challenge BJP in 2024. If the INDIA alliance is not able to work out on seat-sharing agreement, it will be a free-run for BJP," Kumar said on what this result means for Congress in the INDIA alliance, and if BJP will have a free run.
On what he is watching out for in 2024, he said, "How the INDIA alliance is going to fold or unfold? If they hold their act together, we can see a contest. Otherwise, it will be free-run for BJP in 2024."
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