The BJP’s thumping victory in Uttar Pradesh and substantial gains made in other states will facilitate reforms as the ruling party inches closer to a majority in Upper House, Moody’s Investors Service said today.
“The 2017 state election results in India demonstrate broad-based popular support for the Indian government’s policy agenda and will facilitate the implementation of further reforms, a credit positive for the sovereign,” it said in a statement.
While the ruling NDA has an absolute majority in Lok Sabha, it currently does not have a majority in Rajya Sabha.
“…the party will increase its share of seats in the Upper House (Rajya Sabha) of India’s Parliament,” it said. However, the changes will not be immediate, Moody’s said.
“The ruling party will not feel the benefit of electoral gains immediately, because the changes in the upper house will only occur next year, when some members retire,” says William Foster, Moody’s Vice President and Senior Credit Officer.
“Nevertheless, electoral support at the state level should translate into broader support for government policy in the upper house, facilitating the passage and implementation of additional reforms,” Foster added.
In its report, ‘Government of India: State Elections Demonstrate Broad Support for Reform Agenda, a Credit Positive’, Moody’s said the BJP has won a net 294 seats in the five state assembly elections held over the past month.
“The BJP’s solid gains were despite the negative economic hit from demonetisation in late 2016,” it said.
In 2018, 69 seats in Rajya Sabha, including 10 from UP and one from Uttarakhand, will come up for re-election. Read More…