The defeat for BJP-led National Democratic Alliance in Bihar may prove to be a setback for Prime Minister Narendra Modi’s economic agenda.
The defeat, however, may prompt the govt to reach out to opposition parties to further its economic programme. Opposition parties have already offered to back the govt on important economic legislation such as the constitutional amendment bill for implementing a common goods and services tax – the GST – across the country. Former finance minister P Chidambaram said on Sunday that the defeat was an opportunity for the Prime Minister to reach out to the opposition.
The unexpected results from Bihar will also dash BJP’s hopes to improve its tally in the Rajya Sabha, where the opposition parties still enjoy an upper hand. JD(U) has 12 members and BJP 4 members in the upper house. The term of five opposition members of the Rajya Sabha is coming to an end the next year and BJP was hopeful of getting some seats by doing well in the state elections.
Industry associations feel that Bihar results may spell trouble for the government’s economic agenda.
Ved Jain, chairman of Direct Tax Committee of Industry body Assocham says that the industry and stock market have already factored-in the outcome of Bihar election.
He said, “There will be issues on economic reforms, we’re talking about the GST and FDI, they will take a back seat.”
BJP’s shock defeat in Delhi elections in January this year emboldened opposition parties to mount an attack on the Prime Minister, who was earlier on a winning streak.
Many important bills are stuck in the Rajya Sabha. Most important among them is the GST. The Lok Sabha has cleared the bill last year but it’s stuck in Rajya Sabha due to lack of majority of the ruling party.
Commenting on the election results, Chidambaram criticised the BJP saying that BJP stalled the GST during the UPA regime in an arbitrary way. He defended his party’s opposition to the GST saying it is based on specific objections. Last week, Congress general secretary Digvijay Singh had asked the BJP government to open a channel of negotiation for the passage of economic reforms in the upcoming winter session.