NEW DELHI: NEW DELHI: Indian financial markets took fright on Monday at the humiliating defeat suffered in the pivotal Bihar election by Prime Minister Narendra Modi and his party, whose leaders have begun meeting amid calls for a rethink of policies and priorities.
The PM will meet nearly a dozen senior colleagues of the BJP, including its president Amit Shah, Finance Minister Arun Jaitley and Home Minister Rajnath Singh at 4 pm today.
The loss in Bihar, India’s third most-populous and poorest state, is the most significant setback for PM Modi since he won a crushing victory in a general election last year.
“We have to identify what went wrong,” said Ram Madhav, a Bharatiya Janata Party (BJP) general secretary.
Indian shares, bonds and the rupee fell to six-week lows this morning as investors who had backed the PM fretted that he would struggle to push economic reforms through the parliament against an emboldened opposition. The Bihar loss may hamper the PM’s reform agenda because he needs to win most state elections in the next three years to gain full control of parliament. The government is in a minority in the Rajya Sabha, whose members are selected according to parties’ strength in state assemblies.
The election came against a background of concerns at incidents in which Muslims have been targeted by Hindu extremists. There have been protests by prominent intellectuals at what they call a climate of rising intolerance. Some BJP lawmakers have called now for the party to refocus on a more unifying agenda focusing on economic development after a campaign that used rhetoric in Bihar and was accused of attempting to polarise voters along caste and religious lines. “We have to be single mindedly focused on development, development, development,” said Chandan Mitra, a BJP member of parliament. “We can’t afford to be distracted by anything else.”
During the campaign, Mr Modi accused rival parties of snatching economic benefits from lower-caste Hindus and handing them over to a religious “minority”, a comment interpreted as veiled reference to Muslims. The Election Commission banned several party posters they said could incite hatred. One banned poster showed a young woman embracing a garlanded cow, sacred to Hindus. The BJP president was also criticised for comments suggesting that if his party lost, the result would be celebrated in neighbouring Muslim-majority Pakistan. Arun Shourie, a minister in the last BJP government, called for a change in course. “We should be grateful to the people of Bihar because the direction has been halted,” he told NDTV. Asked what went wrong with the party’s Bihar campaign, he said “everything”.