The government has said that it was willing accept any political cost for pushing through tough economic reforms.
The government will continue with its reforms agenda undeterred by the poll outcome in the assembly elections, said Shiv Pratap Shukla, minister of state for finance.
“Prime Minister had publicly stated that he was willing to accept any political cost to carry out economic reforms,” Shukla told Rajya Sabha TV.
Shukla downplayed the impact of GST and demonetisation on the party’s performance in Gujarat which is a highly industrialised state and which saw traders and businesses taking out rallies in July to protest the implementation of GST.
BJP had recorded resounding victories in Uttar Pradesh, Uttarakhand and was able to form government in Goa and Manipur immediately after the Prime Minister Modi’s decision to denotify high-value currency notes.
The party’s victory in the most populous state of the country was seen as an unmistakable sign of overwhelming public support to the Prime Minister’s shock decision to replace high value currency notes to curb black money and corruption.
However, observers were closely watching the party’s performance in Gujarat and Himachal Pradesh polls as these are the first state polls conducted after the implementation of GST in July this year.
Also, the timing of these state polls coincided with the first anniversary of the note ban decision which resulted in shrill political debate over the cost and benefit of the demonetisation decision.
As a response to the possibility of BJP’s poor performance in Gujarat, BSE Sensex tanked by over 600 points during the early morning trade on Monday when Congress seemed to be edging past BJP in the state during the initial stage of counting of votes.
During the early trade, Indian Rupee also depreciated sharply by over 60 paise against US dollar as markets reacted nervously to the possibility of a BJP defeat in the Prime Minister’s home state that might derail the party’s economic reform agenda as the country had also experienced sluggish GDP growth since the demonetisation decision in November last year.
However, both stock markets and Indian currency recovered sharply as the BJP’s tally improved in both the states during the day and the party was eventually able to hold on to its fort in Gujarat and sweep away Himachal polls.
A poll victory in both Himachal and Gujarat is also expected to be seen as the endorsement to the Prime Minister’s economic policies.