India Strategy : Clean sweep for NDA; JDU in commanding position by JM Financial Services Ltd
Exceeding most exit poll predictions, the NDA stormed back to power in the Bihar assembly election with a commanding mandate of 202 seats, far higher than 122 it won in the previous election. The recently launched women-centric cash transfer scheme played a major role in improving the voter turnout – especially among women, which reflected in the results as well. The Nitish Kumar-led JDU was a clear winner, snatching 40+ seats from the RJD, while the BJP (the single-largest party in terms of seats won) gained at the cost of the Congress (-13 seats). Although the results of the Bihar election send a clear signal of the political appeal of the BJP and its allies, we believe the JDU with 85 seats is currently in a commanding position at the Centre.
* Clean sweep by NDA: The National Democratic Alliance (NDA) made a clean sweep with 202 seat wins in the Bihar assembly elections vs 122 seats in the previous election. Unlike the past trend, the actual results were in line with the exit polls but the mandate was stronger this time vs 146 seats predicted by exit polls for the NDA. There is a clear shift in seats from the RJD to the Nitish Kumar led JD(U), with a gain of 42 seats, while the BJP gained 15 seats at the cost of the Congress (-13 seats) vs the previous election. The Lok Jan Shakti Party garnered a sizable chunk of 19 seats for the NDA alliance. The Jan Suraaj Party did not win even a single seat in its debut election; the exit polls had predicted it could win two seats. Although the BJP is the single largest party (89), the opposition RJD had the highest vote share of 23% vs. 20% for BJP.
* Women made their presence felt: In the run-up to the election results, the highest voter turnout of 66.91% in both phases gathered eyeballs as it generally indicates antiincumbency. In hindsight, it is clear that the extensive review of the voter list, which removed ~6.5nn inactive names, may have been the main reason. The highest turnout (71.6%) among women was also the key highlight in this election, as it exceeded male turnout by ~9ppts. The recently launched “Mukhyamantri Mahila Rozgar Yojana” wherein INR 10,000 was transferred to one women per family played its role in increasing the turnout among women. It is worth highlighting that 11mn women were identified for this scheme, which is one-third of the total women voters in the state.
* Decisive mandate to add stability at the centre: The decisive mandate in Bihar in favour of the NDA and the magnitude of shift in votes from the opposition parties (RJD & Congress) sends a clear signal of the political appeal of the BJP and its allies. However, we believe that with 85 seats the JDU is currently in a commanding position in the alliance, which will provide it greater negotiating power at the Centre. We expect the markets to react positively to this victory, considering that it will add stability to the coalition at the Centre.
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