The Congress was routed and with 44 seats could not manage a double digit in any state and failed to win a single seat in seven states. This is barely eight seats more than that of a regional party, J Jayalalithaas AIADMK in Tamil Nadu. Such was the Congress showing that in Assam chief minister Tarun Gogoi said he would resign as he had failed to deliver for the party.
Indias caste warriors like Mulayam Singh Yadav and Mayawati were cut to size as were the Communists. While Lalu Prasads RJD won the same number of seats that it did in 2009, Mulayam Singhs Samajwadi Party got just five seats versus the 21 in 2009 and Mayawati failed to get even a single seat compared with 21 in 2009. Even Bihars Nitish Kumar was trounced after his split with the BJP and managed just two seats versus 19 the last time around. The Communists were reduced to half their earlier presence.
Modi reached out to the opposition, seeking cooperation of all parties and leaders in running the nation and dedicated himself to serve everyone equally. In a thanksgiving speech to the electorate in Vadodara from where he won with a thumping majority of 5.7 lakh votes, he sought to allay the fears of some sections about his perceived majoritarian agenda. For a government, no one is a favourite, nor is anyone an alien, he asserted. In a democracy, there are no enemies but only competitors. That competition ends with elections, Modi, who led a high-voltage and sometimes bitter campaign, said in a pacifying tone.
Markets were riding high on expectations of a Modi win over the last week. On Friday, the Sensex rose 6.1% to 25,375.63 points, before ending the day at a record 24,121.74, up 0.9%. Deutsche Bank raised its December 2014 target for the Sensex to 28,000, predicting a structural bull market after the BJPs emphatic win. The BSEs PSU index was up 37% since the start of March, outperforming the Sensex, probably driven by Modis plan to revamp the energy and infrastructure PSUs through reforms and infusing professionalism in them.
The rupee hit a fresh 11-month high on Friday, rallying 50 paise to 58.79 against the dollar.
Corporate India cheered the victory, saying the stage was now set to revive investor confidence and said a big push to the infrastructure sector, as outlined in the BJPs manifesto, could help invigorate the economy.
Modi would, however, face a constraint in unleashing reforms that require legislative sanction as the NDA has only 62 members in the 245-strong Rajya Sabha, lower than the UPAs 82 and the larger block outside both combinations.
The current victory in the Lok Sabha elections would help the NDA gain strength in the Upper House over the next few months and acquiring the required majority in the House would hinge on the results of the assembly elections in some states over the next couple of years.
In the run-up to new government formation, the Cabinet will meet on Saturday and recommend to President Pranab Mukherjee the dissolution of the 15th Lok Sabha. The swearing in of the new government could be on May 21, sources said, although there is no official word on it so far.
The BJP's poll manifesto talked about the need to deal with tax terrorism, laying a tax policy road map and taking states into confidence in adopting the goods and services tax. With around Rs 2.1 lakh crore worth of tax cases (including those involving retrospective changes to tax laws) filed against MNCs and Rs 4.82 lakh crore worth 'tax arrears' being disputed at various judicial and quasi-judicial (as on June 2013), the Modi government would do well to make the tax administration rational, non-adversarial and investor-friendly, experts said. The tougher task for Modi would be in securing parliamentary assent for privatisation of coal mining and bringing government stake in PSU banks to below 50%.
Rating agency Fitch said on Friday: The most salient issue for the new government from a sovereign credit perspective seems to get growth back to higher sustainable levels, which would require a strong pick-up in investments.
Fitch added the investment climate can be strengthened by measures including a clear strategy for fiscal consolidation, creating a low-inflation environment and a new push towards structural reforms, including reducing red tape and easing infrastructure bottlenecks.