HYDERABAD/NEW DELHI, June 5 (Reuters): Indian Prime Minister Narendra Modi’s National Democratic Alliance formally named him on Wednesday to lead a new coalition government for a third straight term, a day after it regained power with a surprisingly slim majority.
Modi, a populist who has dominated Indian politics since 2014, will for the first time head a government dependent on the support of regional allies whose loyalties have wavered over time, which could complicate the new cabinet’s reform agenda.
A day after the humbling election outcome for his Bharatiya Janata Party (BJP) became clear, Modi submitted his resignation to President Droupadi Murmu after the cabinet recommended the dissolution of parliament – the first of many formalities before Modi can form a new government.
This was followed by a meeting of 15 parties in the National Democratic Alliance (NDA) at Modi’s residence where he was formally named to lead the alliance.
Modi was set to meet Murmu again on Friday to present his claim to form a government and the swearing-in could take place over the weekend, an NDA leader told Reuters on condition of anonymity as he is not authorised to speak to the media.
Local media earlier reported that the swearing-in ceremony was scheduled for Saturday.
The NDA won 293 seats in the 543-member lower house of parliament, more than the 272 needed to form a government.
Modi’s BJP won 240 seats on its own, a weakened verdict which could slow India’s fiscal tightening, ratings agency Moody’s said.
The weakened majority for Modi’s alliance could pose challenges for the more ambitious elements of the government’s reform agenda, ratings agency Fitch said.
However, it added: “Despite the slimmer majority, we do expect broad policy continuity to persist, with the government retaining its focus on its capex push, ease of doing business measures, and gradual fiscal consolidation.”
The closer-than-expected election should increase the prospect of productive reforms, the country’s chief economic adviser said on Wednesday.