• Wednesday, June 19, 2024
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BusinessDay

India’s Modi takes oath as PM amid quest to transform economy

Narendra Modi

Narendra Modi has been sworn in as India’s prime minister for a historic but unexpectedly constrained third term, after a relatively weak election performance caused by citizens’ concerns over rising inflation and unemployment.

A survey published in The Hindu national newspaper on Thursday showed that concerns over inflation and a lack of decent jobs to employ India’s vast working-age population almost crushed Modi’s third term bid.

The 73-year-old performance in the over one-month long election will leave him dependent on coalition allies in the world’s biggest democracy.

Modi, flanked by officials from his Hindu-nationalist party and his coalition members, vowed in a ceremony marking his formal assumption of power to “bear true allegiance to the constitution of India”.

Modi’s Hindu-nationalist Bharatiya Janata Party (BJP) ruled outright for the past decade but failed to repeat its previous two landslide wins this time around, defying analysts’ expectations and exit polls.

While Modi is India’s first leader to secure a third straight term since independence premier Jawaharlal Nehru, his party lost 63 seats in the lower house in India’s six-week election, dramatically undershooting exit polls forecasting a landslide victory.

The BJP was shorn of its outright majority and left leaning on the 14 regional parties in its National Democratic Alliance.

It marks the biggest blow to Modi during his decade in power, and he has since made unusually conciliatory comments about ruling through consensus.

Analysts say that the domineering Modi, who centralised control in his office and rammed through legislation with strong parliamentary support, will have to learn new diplomatic skills, slow politically contentious reform plans and tame the BJP’s Hindu nationalist goals.

India’s return to multi-party haggling, not seen since Modi first stormed to national power in 2014, has fuelled concerns among economists over fiscal slippage and the likely pressures on the government to dole out financial support for political interests.

Rating agency Moody’s has warned that coalition politics could “impede progress on fiscal consolidation” and slow down economic reforms as India looks to build out a globally competitive manufacturing industry.

Thousands of dignitaries, including regional leaders such as Bangladesh’s Sheikh Hasina, Indian billionaires Gautam Adani and Mukesh Ambani, and Bollywood megastar Shah Rukh Khan attended the ceremony on the lawn of the president’s residence in New Delhi.