Indian elections go down to the wire

More than 200 million Indians have gone to the polls in the final stage of India's closely fought general election.

    Vajpayee's coalition is favourite to win the elections

    After they had done so on Monday, the future of the country's

    economic reforms hung in the balance.

    Exit and opinion polls show Prime Minister Atal Behari

    Vajpayee's ruling coalition likely to emerge as the biggest

    bloc in parliament but falling short of an outright majority.

    That result would put Vajpayee and his Hindu-nationalist

    Bharatiya Janata Party (BJP) scrambling for the support of

    smaller, populist parties to expand their existing 20-party c

    oalition.

    With the 79-year-old Vajpayee's track record as a master of

    coalition politics and his reputation as a "moderate", he remains

    the firm favourite to form a new government, analysts say.

    But they warn that a shaky coalition would struggle to

    implement the next stage of economic reforms India desperately

    needs as its starts to emerge as a major economic player in

    Asia.

    Impoverished masses

    "Vajpayee is an advantage, because he is trusted by all his

    allies, and that is a very big plus for them," said political

    analyst Mahesh Rangarajan.

    "The next government will have to tackle it (India's fiscal debt) on a war footing. This means they will have to cut back subsidies, which make the bulk of the deficit, very sharply"

    Prem Shankar Jha,
    Columnist

    "But the economic reform programme would be subject to more

    pressures and pulls, particularly when you look at

    privatisation, and labour reforms."

    Vajpayee called the election six months early to capitalise

    on a strong economy, a good monsoon and improved relations with

    old foe Pakistan.

    But his party's campaign motto "India shining" appears to

    have backfired among the country's impoverished rural masses,

    who feel excluded from an economic boom which has mainly

    benefitted the urban middle classes.

    As a result the election has become much closer to call,

    with the opposition Congress party led by Italian-born Sonia

    Gandhi gaining ground in the final weeks.

    Monday's final round of the three-week poll is the toughest

    test by far for Vajpayee's BJP, with 182 seats up for grabs

    across 16 states.

    Weak government?

    The race is concentrated in the southern state of Tamil

    Nadu and the communist bastion of West Bengal, both large

    states where the BJP has little presence and has to rely on

    regional partners.

    Opinion polls show the BJP and its allies struggling to win

    more than a third of the seats on offer on Monday.

    Television polls predict they will win anywhere between 240

    and 280 seats overall, with four out of five polls showing them

    falling just short of a majority in the 545-seat parliament.

    Political commentators say Vajpayee should be able to form

    a government if his current coalition gets 250 seats, but with 240

    or

    less and he could be in trouble.

    Columnist Prem Shankar Jha says there is only a five per cent chance

    or less of a non-BJP government, but a much

    higher chance of a shaky coalition emerging with Vajpayee at

    the helm.

    "The ruling alliance will be further weakened by the

    populist nature of the parties Vajpayee will be forced to woo,"

    he said.

    Economic reform

    "Even the capacity to continue the deliberate pace of

    economic reform, for instance, will be greatly impaired."

    Gandhi's Congress Party has
    gained ground in recent weeks

    The biggest casualty, Jha and Rangarajan agree, will be

    efforts to rein in India's stubbornly high fiscal deficit,

    running at more than 10% of gross domestic product if

    borrowing by central and state governments is added together.

    The deficit has kept interest rates high, crowded out

    private investment and cut into funds needed to repair the

    country's creaking infrastructure.

    "The next government will have to tackle it on a war

    footing," said Jha. "This means they will have to cut back

    subsidies, which make the bulk of the deficit, very sharply."

    Legislation requires the next government to bring revenues

    and spending into line by 2008. "That will require major cuts

    in subsidies," said Rangarajan. "I don't know how a government

    with even 300 seats could do it."

    But analysts see less risk of the peace process with

    Pakistan being derailed whatever the election result, even

    though efforts to repair relations have been driven mainly by

    the prime minister in the face of opposition from within his

    own party.

    "At the bazaar level a chord has been struck," said

    Rangarajan, adding that this year's Indian cricket tour of

    Pakistan has helped foster a popular desire for friendly ties.

    "It's such a deep-rooted conflict one shouldn't expect a

    rapid breakthrough," he said. "But both sides have signalled a

    willingness to accommodate the other person's mindset."

    SOURCE: Reuters


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