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HYDERABAD, India: Indian Prime Minister Narendra Modi is set to be sworn in for a record-breaking third term on June 8 after key allies pledged their continued support a day after a humiliating election result that saw his party lose its majority in parliament.
Modi, a populist who has dominated Indian politics since taking office in 2014, will for the first time need the support of regional allies whose loyalties have wavered over the years, which could complicate the government’s reform agenda.
On Wednesday, two allies of his National Democratic Alliance coalition pledged their support: the Telugu Desam Party, a major regional player in the southern state of Andhra Pradesh, and the Janata Dal (United), which governs the northern state of Bihar.
“We are with the NDA, I will attend the meeting in Delhi today,” TDP leader Chandrababu Naidu told reporters, referring to a meeting of the BJP-led alliance scheduled to take place later in the day.
Modi submitted his resignation to President Droupadi Murmu on Wednesday after the federal cabinet met and recommended the dissolution of parliament, the first of many constitutional formalities before Modi can form a new government.
Modi and his new cabinet were due to be sworn in on Saturday, local media reported.
In the 543-member lower house, the NDA won 293 seats, more than the 272 needed to form a government.

Modi’s BJP won 240 seats alone, a weakened result that could slow down austerity measures in India, said rating agency Moody’s.
Both regional allies, the TDP and the JD-(U), are seen as pragmatists on economic policy, but Modi’s new government will likely have to raise money to finance more spending on social projects in their states.
The weakened majority for Modi’s alliance could pose challenges to the more ambitious elements of the government’s reform agenda, said rating agency Fitch.
However, it continued: “Despite the narrower majority, we expect the policy to largely continue. The government will continue to focus on its investment offensive, measures to facilitate business and gradual fiscal consolidation.”
The closer-than-expected election result is likely to increase the prospect of productive reforms, the country’s top economic adviser said on Wednesday.

Setbacks in rural areas
With the party losing most ground in rural areas, the land and labor market reforms that were hoped to boost value creation and growth are likely to fall by the wayside, investors say.
Newspapers reported that Modi’s aura had faded. The Indian Express headline read: “India gives NDA a third term, Modi a message.”
In the final stages of his election campaign, Modi again tried to appeal to India’s Hindu majority population by accusing the opposition of favoring the Muslim minority.
But without a majority of his own, some of the policy demands of his Hindu nationalist BJP, such as a uniform civil code for all religions, which has met with resistance from some Muslims, are likely to be put on hold because Modi’s allies in the region are seen as more accommodating to minorities.
The BJP suffered heavy defeats in the two states with the most MPs in parliament: in its northern stronghold of Uttar Pradesh with 80 seats and in the western state of Maharashtra, which sends 48 MPs to the decision-making lower house.
In Uttar Pradesh, the party lost almost half of its seats, falling from 62 in 2019 to 33. In Maharashtra, India’s richest state, which includes the financial metropolis of Mumbai, it fell from 23 seats to a pitiful nine seats.
Modi’s own victory in his constituency of Varanasi in the Indian state of Uttar Pradesh, which is considered one of the holiest cities for Hindus, was modest: his lead narrowed from almost 500,000 votes in the last parliamentary election in 2019 to just over 150,000.
However, this reduced victory does not necessarily mean paralysis of reforms, said the chairman of the state finance board, Arvind Panagariya, in an editorial in the newspaper “Economic Times”.
“Despite the shrinking majority in parliament, the necessary reforms are certainly feasible. Sustained and accelerated growth can only strengthen the government’s position in the coming years,” he said.
The opposition INDIA alliance led by Rahul Gandhi’s centrist Congress party won 230 seats, more than forecast. The Congress party alone won 99, almost double the 52 it won in 2019 – a surprising jump that is likely to boost Gandhi’s standing.
The INDIA alliance is expected to meet in New Delhi on Wednesday to discuss further action.

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