Dr. Manmohan Singh’s United Progress Alliance (UPA) won 206 seats in India’s lower house of Parliament (Lok Sabha) and along and their “fourth front” allies have a commanding 285 seat majority in the 543 member body. The major constituent of the UPA is the Indian National Congress and its candidates did remarkably well at the expense of the Communists and their allies (who dropped from 60 seats to 24) and the National Democratic Alliance, let by the Bharitya Janata Party (BJP), which dropped from 189 seats in 2004 to 161. Until 2004, the BJP controlled the government.
Businessmen in India were universally delighted with the results. IIT Alumnus and head of ITC, Ltd (hotels, tobacco, fishing) Yogi Deveshwar looked forward to the return of double-digit growth in the economy. Investment manager Sameer Arora, of Helios Capital, said that wiping out the left parties alone was “worth an addition of 500 points to the Sensex” (Sensex is the popular stock market index in India similar to the Dow in the USA).
Infosys Co-chairman Nandan Nilekani (and author of Imagining India) was relieved at the margin of victory: “This is the first time in many years that a government would not face any ideological barrier.” Congress supporter and Bharti Airtel Chairman Sunil Bharti Mittal said: “India has much to cheer about finally.”
The exuberance and gushing are great, but as I said in my book (Doing Business in 21st Century India) , India is an elephant, not a tiger. Governing without the thorn of the left parties will be easier. But the size of the victory may well embolden internal power struggles within the Indian National Congress. Already Dr. Singh is talking about bringing in the young (by Indian standard) Nehru-Gandhi scion, Rahul Gandhi, into the cabinet. Those whom he displaces are likely to want outlets for their ambitions. Reform architect PC Chidambaram (Harvard MBA and former Finance Minister) had a close call when it seemed he might have lost his re-election bid; a recount showed he had won.
