(Bloomberg) -- Prime Minister Narendra Modi’s Bharatiya Janata Party has an edge over the opposition in two key state elections, exit polls show, giving him a boost before next year’s polls.
The BJP is poised to retain Madhya Pradesh and swing Rajasthan its way from key rival, the Indian National Congress, according to most of the exit polls Thursday. The Congress party is predicted to hold on to Chhattisgarh and clinch Telangana, a southern state currently ruled by a regional party.
While the exit polls aren’t definitive, and the state elections aren’t a proxy for the nationwide vote in 2024, a win for the BJP in the two key northern states would put Modi in a strong position in his bid to stay in power. Official results are due to be released on Dec. 3.
In Madhya Pradesh, a large agrarian state, the Congress party had hoped to capitalize on anti-incumbency sentiment among voters and unemployment concerns.
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In the northeastern state of Mizoram, it’s looking like a close fight between two regional parties, according to the poll predictions.
“A decisive BJP win will reinforce the consensus view that the party is on the front-foot for the 2024 general elections,” said Madhavi Arora, lead economist at Emkay Global Financial Services Ltd. “This is likely to add another leg of rally to the markets, as policy continuity will be viewed as a positive growth-shock in the medium term.”
Futures on India’s Nifty 50 Index climbed as much as 0.4% early on Friday.
The exit polls for Madhya Pradesh indicate a two-way contest between the BJP and the Congress. The four-time chief minister, Shivraj Singh Chouhan, is predicted to retain power. The state with a population of more than 72 million has 230 assembly seats.
In the Congress-governed state of Chhattisgarh, chief minister Bhupesh Baghel is expected to return for a second term, despite federal investigations over corruption allegations against his government. The Chhattisgarh assembly has a total of 90 seats.
Rajasthan, where anti-incumbent sentiment is common, remains a close race between the BJP and Congress. With the majority mark at 100 seats, BJP is marginally ahead in the exit polls.
Congress wasn’t able to “generate the enthusiasm” in Rajasthan, Madhya Pradesh and Chhattisgarh, where “Modi’s Hindutva factor is strong,” said Arati Jerath, a New Delhi-based author and political analyst.
In the southern state of Telangana, the Congress is predicted to flip the state, beating K. Chandrashekar Rao’s Bharat Rashtra Samithi that governed the state since its formation in 2014.
“The elections in Telangana in the south will be a game changer if Congress wins it, which will have a huge impact for the general elections next year,” Jerath said.
The BJP, which campaigned hard in the state, hasn’t made substantial gains, according to the exit polls. The BJP’s popularity in southern India continues to remain low and conceded power in Karnataka earlier this year. The Telangana assembly has a total of 119 seats.
In the state of Mizoram, the Mizo National Front has a slight edge over another regional party Zoram People’s Movement. The MNF previously formed a loose coalition with the BJP, but has lately diverged on key national policies. The Mizoram legislature has a total of 40 seats.
The five state elections are key for testing strategies ahead of next year’s national vote, when Modi will seek a third term in office. Earlier this year, more than 25 opposition parties, including Rahul Gandhi’s Congress party, formed an alliance to take on Modi and the BJP.
These five states together send a sixth of India’s parliamentarians in the national election.
--With assistance from Abhishek Vishnoi.
(Updates with comment from analyst.)
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