BJP-led NDA crossed the majority mark but failed to surpass the "400 paar" expectations as the INDIA bloc was able to garner voters' attention. The rise in the opposition party's vote bank also came as the Samajwadi Party was able to gain momentum with 37 seats.
Both parties will be holding separate meetings today since there is a chance of tables getting turned from either side. If the BJP-led NDA forms the government again, it would be the first to secure a third consecutive term since 1962.
While the results have already been declared, the nation still remains on the edge of the seat. Here are the key highlights of this year's election:
1. BJP's faltering majority, spooks market
After exit polls declared an easy win for the BJP government, bullish sentiment roared in the market. However, the optimism didn't last for long as bears took charge during the counting process, sending the markets into a freefall. Sensex plunged by nearly 5000 points on the result day whereas NSE Nifty was down by more than 5 per cent or 1,379 points.
Initially, the results differed greatly from exit polls, which came as a surprise for the D-street. Eventually, as it became evident that a strong BJP majority wasn't likely, market sentiment took a sharp fall. FIIs remained the major driver of market mood.
2. First Government Since 1962 to Win Third Term
Despite a narrow winning margin, the BJP secured more votes than any other party. NDA surpassed the majority mark of 272 by winning close to 292 seats out of the total 543 contested. "After 1962, for the first time, a government has won the mandate for a third consecutive term," PM Narender Modi said.
The NDA received massive backing from Chandrababu Naidu (Andhra Pradesh) and Nitish Kumar (Bihar). On top of it, the party received a strong victory in the capital as well, with BJP leaders like Manoj Tiwari and Basuri Swaraj calling wins.
The party also defeated Odisha's CM Naveen Patnaik of the Biju Janata Dal, who had held power in the state since 2000.
3. Rural Vote Swings impacting the vote bank
The saffron party failed to garner votes in rural regions of the nation as the India Bloc got a major chunk of the voter share. Unlike the metro cities like Delhi and Bangalore, BJP suffered heavy losses in the rural belts of the country.
While the latest GDP growth figure of 8.2 per cent (for FY24) impressed many, the figures of the agriculture story were concerning. Despite the overall positive outlook, the agriculture sector displayed subdued growth, with an increase of only 0.6 per cent in Q4, slightly up from 0.4 per cent in Q3. The setback was largely the result of extreme weather and the El Nino phenomenon.
What came as a major hit, was BJP's loss in UP's Faizabad constituency, where Ram Mandir has been built.
4. Return of the coalition era
The NDA has no doubt secured a historic third consecutive term in power at the Centre, yet the BJP alone has not reached the majority threshold of 272 seats.
"It is likely that Narendra Modi will return as PM for a third term. However, he will have to contend with changed circumstances. First, the BJP will be dependent on regional allies and make policy adjustments accordingly. Second, there will be a greater demand to stimulate consumption in the economy from both, the BJP and its allies," Emkay Global stated in a report.
Both the NDA and the India Bloc have called for separate meetings today. So even if the final verdict might take some more time, what is clear is that a coalition power will be taking center stage in either case.
"There is an outlier possibility that the opposition could form the government if some of the BJP's existing allies cross over, while this would be unlikely," the report added.
Brokerage firm Motilal Oswal noted that despite the reduced majority, the policy agenda of Modi 2.0 (Investment-led growth, Capex, Infrastructure creation, Manufacturing, etc.) will continue, although with some tweaks.
The government might introduce populist measures to alleviate rural stress and improve public sentiment, given the nature of the verdict. "While the broad thrust on capex and investment-led growth continues, the agenda going forward could also include measures for reviving consumption at the bottom-of-the-pyramid, some relief in taxation measures, and indeed the rationalization in the GST structure," the brokerage firm added.
