BREAKING NEWS

India's Modi fights to capture southern Indian state

By REUTERS

MAY 12, 2018 11:14

NEW DELHI - Polling began on Saturday in India's southern state of Karnataka, where Prime Minister Narendra Modi is seeking to wrest control over one of the few places left in the hands of the opposition Congress party.

Modi faces a general election within 12 months, and how his Bharatiya Janata Party fares in Karnataka, the only southern state where it has ever made significant inroads, could give an indication whether the tide is still with him.

The BJP and its allies are currently in power in 22 of India's 29 states, but after Karnataka, three more state elections will fall due by the end of the year.

Both Modi and Congress leader Rahul Gandhi, the scion of the Nehru-Gandhi dynasty that has dominated Indian politics since independence, have campaigned hard in Karnataka, a state of 66 million people with diverse constituencies.

Karnataka is the only place in South India where the Hindu nationalist BJP has ever managed to win control of the state government.

State capital Bengaluru is regarded as the home of India's "Silicon Valley", while voters in farming and mining areas have very different priorities from urban dwellers.

Both parties have promised farm loan waivers if they came to power, joining the states of Uttar Pradesh, Maharashtra and Punjab which have announced loan waivers estimated at $15 billion, which would increase the fiscal burden of those states over the medium term.

Opinion polls have forecast neither the BJP or Congress would emerge as a clear winner when Karnataka finalises the poll results on May 15. Such an outcome could result in Janata Dal (S), a regional group, taking the role of kingmaker in the 224-member state assembly.

Voter surveys in India are often unreliable, however.

Whereas voters elected Modi in 2014 thanks to his promise of reforms that could unlock growth in the economy there has been disquiet over his stance toward India's non-Hindu minorities, and the pain resulting from some of the economic steps taken.

The implementation of a new national Goods and Services Tax (GST) last July, was beset with problems, hurting small businesses and hitting economic growth.

"The markets will view the results as a testament of the government’s popularity in midst of wider GST-led disruptions and asset market volatility," Radhika Rao, an economist of DBS Bank said in a note earlier this week.

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