CLSA sees Modi momentum building in India

Foreign brokerage believes BJP may win 186 seats, up from 156 in July

The Congress-led government at the Centre may have advised foreign brokerages and research houses to mind their own business and not interfere in Indian politics, but CLSA’s Chris Wood has done it yet again.

In his weekly newsletter dated 21 November, a few days after CLSA’s India conference held in Gurgaon, he has written: “There is no doubt that what could be termed Modi momentum is building in India. There is also no doubt that politics has been the key point of focus at this week’s 16th CLSA India Forum held in Gurgaon. With a general election having to be held by the end of May next year and four key state elections due to be held by early December, India is clearly in election mood. It is also clear that perceptions of Narendra Modi’s prospects for the general election are rising by the day.”

Like many other foreign strategists, Wood is also of the opinion that the BJP needs to snap up only 200 seats to arrive at a strong majority in Parliament. Merely six months ago, the BJP could not have even imagined winning so many seats on its own, as Modi was not considered to be an acceptable face but this has changed over the last few months or so claim foreign brokerages and some domestic ones too. The wind has changed and Modi is gaining ground with every passing day.

Over the last two years, several economists, strategists and experts have been cautioning against the government’s populist programmes and its impact on growth. CLSA’s Wood says that his weekly newsletter 'GREED & fear' has taken a different view (on Modi) in  the  recent  past  “because  of  the  view  here  that India’s electorate is pining for a change and, in particular, the return of a government focused on a growth mandate rather than a mandate based on the promise of more handouts on the “alleviation of poverty theme.”

Besides opinion polls, Wood like countless other India observers has spoken to people who have a keen ear to the ground. Foreign observers like Wood are also comparing the number of people attending the rallies of Modi and Rahul Gandhi. 350,000 people attended a Narendra Modi rally in Bangalore, paying Rs 10 each while merely 30,000 people attended a Rahul Gandhi rally in Delhi. Based on such empirical evidence, Wood says that together with its alliance partners, the BJP-led NDA coalition is expected to win 186 seats, up from 156 seats predicted in July.  By contrast, Congress is predicted to win only 102 seats, down from 119 seats in the July poll.