As the Narendra Modi led National Democratic Alliance (NDA) government prepares to take the oath of office on June 9, 2024, many analysts are speculating how a coalition government might hinder economic reforms and influence the country’s foreign policy. The NDA secured 293 seats in the recent elections, with the Bharatiya Janata Party (BJP) falling 32 seats short of a majority, having won 240 seats.
While scepticism about coalition governments is widespread, it is often exaggerated. Historical precedents demonstrate that coalition governments in India have successfully introduced and maintained major economic reforms. Notably, the landmark economic reforms of 1991 were introduced by a minority government led by the late PV Narasimha Rao. Additionally, both National Democratic Alliance governments under late Atal Bihari Vajpayee (1998-1999, 1999-2004) and the United Progressive Alliance (UPA) governments under Dr Manmohan Singh (2004-2009, 2009-2014) maintained continuity in economic policies. Although UPA 2 experienced a degree of policy paralysis, the coalition government’s economic performance remained commendable, with a GDP growth rate estimated at 7% during its tenure.
In the realm of foreign policy, there has been a broad consensus between successive governments over the past three decades, particularly concerning relations with the US, China, Russia, Japan, South East Asia, and Gulf countries. No regional party has disrupted key foreign policy decisions to date. One illustrative example is the Indo-US nuclear deal, an important achievement during Dr Manmohan Singh’s premiership. Despite the opposition from the Communist Party of India (Marxist), which led to its withdrawal of support, the Samajwadi Party came to the UPA’s aid, ensuring the deal’s continuation.
However, managing differences between New Delhi and regional parties concerning ties with neighbouring countries remains a challenge in coalition governments. During UPA 2, for instance, West Bengal Chief Minister Mamata Banerjee’s Trinamool Congress (TMC) opposed the Teesta River water agreement. Similarly, the Dravida Munnetra Kazhagam (DMK) and All India Anna Dravida Munnetra Kazhagam (AIADMK) exerted significant influence on India’s policies towards Sri Lanka. These instances illustrate the complexities of coalition politics, where regional interests may impact national strategy.
In the current NDA coalition, the BJP holds 240 seats—30 shy of a majority. Given this relatively strong position, the BJP is unlikely to encounter significant challenges on key foreign policy or economic issues if managed astutely.
. In contrast, the Indian National Congress (INC) in UPA 2 had only 209 seats and was heavily reliant on the DMK. Neither the DMK nor the TMC are part of the current alliance, indicating potentially smoother governance.
It’s also beneficial for the central government to seek the perspectives of border states, regardless of which party governs them. For instance, a left government led by Manik Sarkar played a positive role in strengthening ties with Bangladesh under both Dr Manmohan Singh and Narendra Modi. The BJP government has actively sought input from North-Eastern states regarding India’s Act East Policy, which focuses on relations with South East Asia. This inclusive approach reinforces cooperative federalism and enhances the national policy framework.
One key ally of the NDA, the Telugu Desam Party (TDP) led by Chandrababu Naidu, is particularly significant. Naidu is a strong advocate of economic reforms and has been one of the most proactive Chief Ministers in terms of economic diplomacy. His current focus is likely to be on revitalizing his state’s economy, emphasizing attracting foreign direct investment (FDI) and infrastructural development.
Apart from considering state governments’ opinions on relations with neighbouring countries, the new government would benefit from working collaboratively on Free Trade Agreements (FTAs) to ensure equitable benefits for all states. Some non-BJP states have felt that deserving projects were diverted to other states, a perception that needs addressing to foster a sense of fairness.
The central government’s successful consultation with state governments on the G20 Summit, which involved holding events in multiple states, exemplifies the potential of cooperative federalism in foreign policy. Prime Minister Modi also made efforts to build consensus by organizing an all-party meeting before the event’s commencement.
In conclusion, coalition partners are unlikely to obstruct key economic reforms or foreign policy initiatives. Constructive input and interventions from these partners can be beneficial. It is essential to address occasional red flags and differences on other significant issues, especially those impacting the political and social fabric. Instead of dismissing coalition governments outright, a more nuanced approach is recommended.
