Game begins
The first ever opinion poll for the next general elections predicts a more fragmented verdict, greater share for regional parties - not a desirable outcome from policy / Government stability perspective. The key deciding factor as to who will form the next Government will be a function of which of NDA or UPA will form the right alliances with these regional parties. If BJP is able to win support of all its pre-2004 allies, it would be a big positive for it. These are still early days and the election would be 6-
12 months away. Also small swings in vote share can cause a large impact on the outcome. But in the interim, the risk of Government going slow on fuel / electricity price hikes exists.
12 months away. Also small swings in vote share can cause a large impact on the outcome. But in the interim, the risk of Government going slow on fuel / electricity price hikes exists.
The first opinion poll - a big loss for the ruling UPA… q Congress lead UPA (United Progressive Alliance) - the current ruling coalition - is
predicted to lose 99 seats in parliament from 227 in 2009 elections to 128 in the
next. Congress itself projected to lose 93 seats and the allies the rest. q The reduction in the number of seats for UPA should not come across as a surprise
given the growth slowdown, high inflation and a flurry of corruption charges but the
scale of the reduction is higher than expected.
predicted to lose 99 seats in parliament from 227 in 2009 elections to 128 in the
next. Congress itself projected to lose 93 seats and the allies the rest. q The reduction in the number of seats for UPA should not come across as a surprise
given the growth slowdown, high inflation and a flurry of corruption charges but the
scale of the reduction is higher than expected.
…and a small gain for NDA
q The tally of the BJP lead NDA (National Democratic Alliance) is projected to rise by
only 32 to 184, way short of the 272 mark required for the majority in the
parliament with a total no of seats of 543.
only 32 to 184, way short of the 272 mark required for the majority in the
parliament with a total no of seats of 543.
q NDA’s tally, however, will likely get impacted, if the on-going verbal war between
BJP and its key partner JD(U) over the potential prime ministerial candidate results
in JD(U) moving out of NDA with its potential 20 seats.
BJP and its key partner JD(U) over the potential prime ministerial candidate results
in JD(U) moving out of NDA with its potential 20 seats.
Need a stable Government, the first opinion poll suggests otherwise q BJP is generally considered to be more pro-development and pro-business than the
ruling Congress. Yet, we believe that any of the UPA or NDA winning 230+ seats
will be considered good by the market from the Government stability point of view. q The current opinion poll doesn’t seem to indicate the above and estimates that the
two of the largest parties Congress + BJP will together win only 47% of seats - an
all time low. This would be a cause of concern for the market.
ruling Congress. Yet, we believe that any of the UPA or NDA winning 230+ seats
will be considered good by the market from the Government stability point of view. q The current opinion poll doesn’t seem to indicate the above and estimates that the
two of the largest parties Congress + BJP will together win only 47% of seats - an
all time low. This would be a cause of concern for the market.
Intense activity around alliance formation till the elections q The biggest gainers are expected to be small /local parties viz. SP (from 23 to 35),
AIADMK (from 9 to 27), BSP (from 21 to 26), YSR Congress (from 0 to 12), TMC
(from 19 to 27)
AIADMK (from 9 to 27), BSP (from 21 to 26), YSR Congress (from 0 to 12), TMC
(from 19 to 27)
q Till the elections, we will likely see a race between UPA poll managers and NDA poll
managers to win and secure help from the smaller parties mentioned above. q BJP/NDA will need to win the support of all its pre-2004 allies viz. AIADMK, TMC,
BJD and TDP. These 4 parties are not aligned to any group as of now and put
together are expected to win 76 seats according to this poll. This can be the big
swinging factor.
managers to win and secure help from the smaller parties mentioned above. q BJP/NDA will need to win the support of all its pre-2004 allies viz. AIADMK, TMC,
BJD and TDP. These 4 parties are not aligned to any group as of now and put
together are expected to win 76 seats according to this poll. This can be the big
swinging factor.
q The upcoming Karnataka state elections (May 13) would also provide some pointers
on public opinion and potential allies would look at that before taking sides.
on public opinion and potential allies would look at that before taking sides.
No need to panic, still early days - but will the reforms process slow down?
q Elections are still 6-12 months away and several things could change. q This survey is based on responses from 40,000 people compared with the 400m+
potential voters and 700m+ of electorate.
potential voters and 700m+ of electorate.
q Due to fragmentation, a small 2-3ppts vote share swing can impact the number of
seats in the Parliament materially.
seats in the Parliament materially.
q But in the interim, the risk of the current Government going slow on fuel /
electricity price hikes exists.
electricity price hikes exists.
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