India's 2004 National Elections
Released: 2004-07-12T00:00:00

Summary:
U.S. relations with India depend largely on India's political leadership. India's 2004 nationalelections ended governance by the center-right coalition headed by Prime Minister Atal BihariVajpayee and brought in a new center-left coalition led by Prime Minister Manmohan Singh. Following the upset victory for the historically-dominant Indian National Congress Party led bySonia Gandhi, Gandhi declined the post of Prime Minister in the new left-leaning United ProgressiveAlliance (UPA) coalition government, instead nominating her party lieutenant, Oxford-educatedeconomist Manmohan Singh, for the job. As Finance Minister from 1991-1996, Singh was thearchitect of major Indian economic reform and liberalization efforts. On May 22, thewidely-esteemed Sikh became India's first-ever non-Hindu Prime Minister. The defeated BharatiyaJanata Party now sits in opposition at the national level, led in Parliament by former Deputy PrimeMinister Lal Advani. A coalition of communist parties supports the UPA, but New Delhi'seconomic, foreign, and security policies are not expected to be significantly altered. The newgovernment has vowed to continue close and positive engagement with the United States in all areas. This report, which will not be updated, provides an overview of the elections, key parties, and U.S.policy interests.

subsections: section_title: Overview
paragraphs: India is a federal republic of more than one billion inhabitants. The bulk of executive powerrests with the prime minister and his or her cabinet (the Indian president is a ceremonial chief of statewith limited executive powers). Most of India's prime ministers have come from the country'sHindi-speaking northern regions and, until 2004, all but one had been upper-caste Hindus. (2) The 543-seat Lok Sabha(People's House) is the locus of national power, with directly-elected representatives from each ofthe country's 28 states and seven union territories. A smaller upper house, the Rajya Sabha (Councilof States), may review, but not veto, most legislation, and has no power over the prime minister orthe cabinet. National and state legislators are elected to five-year terms. The previous nationalelection was held in October 1999. Although India's political stage is crowded with numerousregional and caste-based parties, recent years have seen an increasingly dyadic battle between twomajor parties that vie for smaller allies in a system that now requires coalitional politics (no partyhas won a national election outright since 1984). Since 1998, the Bharatiya Janata Party (BJP) hadled a ruling National Democratic Alliance (NDA) coalition of more than 20 parties working underthe leadership of Prime Minister Atal Bihari Vajpayee. The October 1999 Lok Sabha electionssolidified the BJP's standing. The key opposition party during this time was the CongressParty. (3) 
During April and May 2004, India held a four-phase national election to seat a new LokSabha. The NDA called elections six months early in an apparent effort to capitalize on perceivedmomentum from positive economic news and from three convincing state-level victories overCongress in December 2003. Some 380 million Indians cast ballots at nearly 700,000 pollingstations. When results were announced on May 13, nearly all observers and participants -- includingPrime Minister Atal Vajpayee -- were surprised by the upset defeat of the NDA, and by asimultaneous resurgence of the Congress Party led by Sonia Gandhi, the Italian-born widow offormer Prime Minister Rajiv Gandhi, which had forged strategic and unprecedented alliances withpowerful regional parties. On May 18, Gandhi stunned her supporters by declining the position ofprime minister in a new United Progressive Alliance (UPA) coalition government, insteadnominating her party lieutenant, Oxford-educated economist Manmohan Singh, for the job. AsFinance Minister from 1991-1996, Singh was the architect of major Indian economic reform andliberalization efforts. On May 22, the widely-esteemed Sikh became India's first-ever non-HinduPrime Minister. 
Poll results also were notable for the best-ever showing of a leftist alliance led by theCommunist Party of India (Marxist), which won a total of 62 seats, nearly all of them from WestBengal and Kerala. Although this Left Front is not part of the new UPA government, it is supportingthe UPA from outside. Investor fears that a new coalition government including communists mightcurtail or halt India's economic reform and liberalization process apparently led to huge losses in thecountry's stock markets: Bombay's benchmark Sensex index lost 11% of its value on May 17, thesecond-largest daily loss ever, and the value of India's largest companies reportedly declined by some$40 billion over seven days, with state-owned businesses slated for public sale taking the greatesthits. Market recovery began after Congress Party leaders offered assurances that the newgovernment would be "pro-growth, pro-savings, and pro-investment." (4) 
Numerous analysts weighed in on the meaning of the complex electoral results. A longtradition of anti-incumbency was only partly apparent in 2004, as many states re-elected sittingparliamentarians. It also is notable that the BJP-led coalition received slightly more total votes thandid the Congress-led alliance. However, huge reversals for the incumbent NDA-allied TeluguDesam Party of the Andhra Pradesh state -- as well as for the BJP, which fell from 181 seats inparliament to only 138 -- were seen by many as evidence that India's rural poor were not persuadedby the NDA's "India Shining" campaign that sought to highlight the country's economic gains(Andhra Pradesh's capital, Hyderabad, has been touted as an information technologyboom-town (5) ). It may bethat voters found the NDA insufficiently attentive to the core issues of " bijli, sadak, pani " (power,roads, water) and voiced a rejection of neo-liberal economic reforms that were seen to benefit India'smiddle- and upper-classes only. (6) 
Other analysts saw in the results a rejection of the Hindu nationalism associated with the BJP(just days after a December 2002 state election victory in Gujarat, the BJP's president declared thathis party would "duplicate the Gujarat experience everywhere" as it represented a "mandate for the[Hindutva] ideology" (7) ). Sonia Gandhi's foreign origin had become a key point of criticism for these groups and it is likelythat her decision to pass on the prime ministership was in part a result of her not wanting to becomea subject of controversy, as Hindu nationalist groups had threatened to launch a nationwide protestcampaign if she took the prime ministership. It also is widely held that Gandhi's action was drivenby a perceived interest in establishing circumstances in which her son Rahul, who ran for and wona parliamentary seat for the first time this year, can assume the family "dynasty" mantle later in thedecade. (8) 
section_title: Key Parties
subsections: section_title: Indian National Congress
paragraphs: The dynastic Congress Party of Jawaharlal Nehru, his daughter, Indira Gandhi, and her son,Rajiv, had dominated India's political stage for 45 of its first 56 years of independence, but did nothold the prime ministership after May 1996. Never before had Congress been out of power in NewDelhi for such a long period (although it continued to hold power in 11 states). After 1998,Congress's national leader was Rajiv's widow, the Italian-born Catholic Sonia Gandhi, who took topolitics only with reluctance. Factors in the decline of support for Congress included neglect of itsgrassroots political organizations by the leadership, a perceived lack of responsiveness to such majorconstituent groups as Muslims and lower castes, the rise of regional and issue-based parties, andallegations of widespread corruption involving party leaders. Gandhi herself, while enjoying theloyalty of most party leaders, came under fire for allegedly poor campaign skills and for her foreignorigins. 
In the wake of three surprise state-level losses in December 2003, Gandhi called on India'ssecular forces to close ranks in resisting the BJP's "development" emphasis, insisting that it wasmerely a cover for the BJP's ongoing "agenda of hatred and divisiveness." Motivated by a belief thatsecular forces would hang together or be hanged separately, Congress began actively seekingalliance partners. (9) Manyanalysts had argued that Gandhi represented a net liability for the party, (10) a long-running andcontentious debate that likely was settled by the outpouring of affection for her in May 2004. Still,some analysts are concerned that Gandhi's significant and "extra-constitutional" influence bodespoorly for the future stability both of the UPA and of the Congress Party, itself. (11) The new Prime Minister'stop four cabinet ministries (Home, External Affairs, Defense, and Finance) are being headed byCongress stalwarts.
section_title: Bharatiya Janata Party
paragraphs: The BJP, associated with Hindu nationalist groups, had enjoyed rapid success in nationalpolitics. Riding a crest of rising Hindu nationalism, it increased its strength in Parliament from onlytwo seats in 1984 to 181 seats 1999. Some observers hold elements of the BJP, as the political armof the extremist Hindu nationalist organization Rashtriya Swayamsevak Sangh (RSS or NationalVolunteer Force), responsible for the outbreaks of serious communal violence in which a mosquewas destroyed at Ayodhya and some 3,000 people were killed in anti-Muslim rioting in Bombay andelsewhere. While in power, the BJP worked -- with limited success -- to change its image fromright-wing Hindu nationalist to conservative and moderate, although anti-Muslim riots in BJP-runGujarat in early 2002 again damaged the party's national and international credentials.
In general terms, the BJP has comprised a moderate wing focused on governance anddevelopment, and a hardline wing more concerned with "emotive" issues related to Hindunationalism. Former PM Atal Vajpayee is viewed as the leading moderate, while former Deputy PMand current BJP parliamentary leader Lal Advani fronts the hardline faction. Advani, who steeredthe BJP's 2004 electoral strategy, has widely been viewed as heir-apparent to Vajpayee, but Advani'sclose ties to the RSS and Vishwa Hindu Parishad (VHP or World Hindu Council), and pastinvolvement in communal conflict (especially the 1992 destruction of the Babri Mosque and ensuingviolence), have denied him the widespread popularity enjoyed by Vajpayee. (12) Because the BJP did notplay the "Hindutva card" in recent state elections, its impressive December 2003 victories in threeof four contested states were viewed as a triumph of the politics of development associated withVajpayee. Still, national election results were widely viewed as a serious blow to the Hindunationalist project. (13) 
BJP leaders attributed their setback to complacency and overconfidence. Hindu nationalistsblamed the NDA's defeat on an alleged betrayal of the Hindutva cause by the BJP; one top leadercalled for the creation of a new party to "look after the interest of Hindus" (BJP leaders such asAdvani equate Hindutva with nationalism). (14) The long-standing rift between moderates and hardliners cameto the fore in a June debate over the possible removal from power of the controversial Chief Ministerof Gujarat, BJP notable Narendra Modi. Vajpayee himself suggested that Modi should go, but hewas swiftly rebuked by the RSS chief in a sign that the BJP is likely to maintain a more hardlineposition while in opposition. (15) 
 Selected Election Results
Source: Election Commission of India; "The Big Picture," Hindu (Madras), May 20, 2004.
section_title: Left Front
paragraphs: Although the Communist Party of India (Marxist) seated the third largest number ofparliamentarians in 2004, its vote bank is almost wholly limited to West Bengal and Kerala (the LeftFront coalition holds about 11% of all Lok Sabha seats). Communist parties have in the past beenbitter rivals of the Congress in these states, but a mutual commitment to secularism appears to havemotivated their cooperation against the BJP in 2004. Early alarm was sounded that the influence ofcommunists in New Delhi might derail India's economic reform efforts, however, Indian industrialleaders have sought to assure foreign investors that Left Front members are not "Cuba-stylecommunists," but can be expected to support the UPA reform agenda. The communist ChiefMinister of West Bengal has himself actively sought corporate investment in his state. (16) 
section_title: Regional Parties
paragraphs: The power of regional and caste-based parties has become an increasingly important variablein Indian politics; the most recent poll saw such parties receiving nearly half of all votes cast. Neverbefore had the Congress Party entered into pre-poll alliances at the national level, and numerousanalysts attributed Congress's success to precisely this new tack, especially thorough arrangementswith the Bihar-based Rashtriya Janata Dal and Tamil Nadu's Dravida Munnetra Kazhagam. (17) The influence of large andsmaller regional parties, alike, is seen to be reflected in the UPA's ministerial appointments, and inits professed attention to rural issues and center-state relations. (18) 
section_title: Economic, Foreign, and Security Policy
paragraphs: Prime Minister Singh has insisted that development will be a central priority of the UPAgovernment, with reforms aimed at reducing poverty and increasing employment. He alsoemphasizes that privatization is not part of UPA ideology and that major public sector concerns willnot be sold off. The appointment of Harvard-educated lawyer and economic reformer PalaniappanChidambaram to head the Finance Ministry, and a UPA Common Minimum Program (CMP)emphasizing economic growth and increased investment, have been welcomed by most businessinterests, even if the pace of privatization and labor reform efforts may slower. The UPA's firstbudget, released on July 8, generally was lauded by Indian industrial groups as "progressive andforward-looking." (19) The budget calls for a major increase in defense expenditures, up 27 percent over the previous year.
Both Prime Minister Singh and his new External Affairs Minister, career diplomat NatwarSingh, have given indications that their initial foreign policy focus will be on India's immediateneighbors. This may mean a deeper diplomatic engagement in the Sri Lankan conflict, along withmore energetic efforts to assist the Nepali government in its struggle with communist rebels. Perhaps most significantly, the India-Pakistan peace initiative begun in April 2003 suffered noapparent damage from the change of government in New Delhi, with both sides insisting that theprocess will continue. The UPA has indicated that it will make the 1972 Simla Agreement betweenIndia and Pakistan the basis of its relationship with Islamabad, even as it will abide by all subsequentaccords. (20) Since thenew government was seated, India and Pakistan have agreed to increase bilateral counternarcoticscooperation; to establish a hotline to reduce the threat of accidental nuclear war; to continue mutualnotifications of missile launches; to return their respective embassies to full strength; and tore-establish consulates in Bombay and Karachi. New National Security Advisor J.N. Dixit has beenassigned to take the lead role in relations with China, replacing his predecessor, Brajesh Mishra, andthe world's two most populous countries have vowed to bolster defense and trade ties while movingforward on efforts to resolve outstanding territorial disputes. (21) India also agreed toincrease bilateral defense ties with Japan through periodic ministerial-level interaction.
The new Prime Minister has vowed to repeal the controversial 2002 Prevention of TerrorismAct that some have called a tool for discrimination against religious minorities and oppositionpolitical figures. Statements about the necessity of preventing a repeat of the communal violenceseen in Gujarat in 2002 have encouraged those who hope that a secularist, left-leaning governmentwill do more to both oppose such divisiveness and bring to justice those who encourage it throughlawless means. (22) Itremains unclear how the UPA intends to address roiling separatist violence in several of India'snortheastern states. On military issues, the UPA states an intent to hasten India's modernizationefforts and to maintain a "credible nuclear weapons program" while pursuing confidence-buildingmeasures with its "nuclear neighbors." (23) 
section_title: India-U.S. Relations
paragraphs: It is as yet unclear how, if at all, the Congress-led government might differ from itspredecessor in terms of relations with the United States. Many of Prime Minister Singh's toplieutenants were steeped in the non-alignment policies of the Congress Party during the Cold War. External Affairs Minister Natwar Singh and National Security Advisor J.N. Dixit have in the pastbeen highly critical of such issues as U.S. involvement in Iraq, U.S. nonproliferation policy, and U.S.designation of Pakistan as a "major non-NATO ally." Their criticisms often went far beyond similarconcerns raised by the outgoing BJP-led alliance. (24) The Congress-led government continues to state that it has noplans to contribute Indian troops for service in Iraq, although U.S. officials are reportedly seekingto "overcome" Indian reservations. (25) The possible influences of communist parties have added toconcerns that New Delhi may become at least somewhat more critical of and less cooperative withthe United States on bilateral and global issues. However, early statements from the UPA, includingsections of its Common Minimum Program, indicate that the Congress-led government will seek"closer engagements and relations" with the United States, even as it will "oppose all attempts atunilateralism" in world affairs. A June meeting of the U.S.-India Defense Policy Group -- the firstbetween high-level U.S. officials and the UPA government -- and a five-day India-United Statesconference on space science and commerce in Bangalore brought joint statements that cooperativebilateral relations will continue. (26)