India’s Modi begins third term as PM, faces coalition challenges

Narendra Modi was inaugurated as India’s prime minister for a third term on Sunday, following an unexpected electoral setback that will challenge his ability to maintain policy stability in a coalition government within the world’s most populous nation.

President Droupadi Murmu administered the oath of office to Modi during a ceremony at the Rashtrapati Bhavan, the presidential palace in New Delhi. The event was attended by thousands of dignitaries, including leaders from seven regional countries, Bollywood stars, and industrialists.

“Honoured to serve Bharat,” Modi posted on X, just moments before taking his oath, using India’s name in Indian languages. Supporters cheered, clapped, and chanted “Modi, Modi” as the 73-year-old leader, dressed in a white kurta tunic and blue half-jacket, was called to take his oath.

Modi was followed by senior ministers from the previous government: Rajnath Singh, Amit Shah, Nitin Gadkari, Nirmala Sitharaman, Subrahmanyam Jaishankar, and Piyush Goyal, among others. Their specific roles are expected to be announced post-ceremony.

Having started as a publicist for the Hindu nationalist Rashtriya Swayamsevak Sangh (RSS), the ideological parent of his Bharatiya Janata Party (BJP), Modi is only the second person after independence leader Jawaharlal Nehru to serve a third consecutive term as prime minister.

Modi secured his third term in elections that concluded on June 1 with the support of 14 regional parties in his BJP-led National Democratic Alliance (NDA), unlike his previous two terms where his party achieved an outright majority.

The outcome is considered a significant setback for the popular leader, as surveys and exit polls had predicted that the BJP would secure even more seats than in 2019.

Coalition Challenges

Modi has delivered impressive economic growth and elevated India’s global standing, but domestically he appeared to have faltered as issues like job shortages, high prices, low incomes, and religious tensions prompted voters to constrain his power.

When Modi was the chief minister of the western state of Gujarat from 2001 to 2014, the BJP enjoyed strong majorities, enabling him to govern decisively.

Modi’s new term as prime minister is expected to be challenging, requiring consensus on contentious political and policy issues due to the varied interests of regional parties and a stronger opposition, analysts suggest.

Some analysts express concern that the fiscal balance in the world’s fastest-growing economy could be strained by demands for higher development funds for states governed by the NDA’s regional partners and potential increased spending by the BJP on welfare programs to regain lost voter support.

While the focus on building infrastructure, manufacturing, and technology is likely to continue, “contentious reforms could be delayed,” said Samiran Chakraborty, Chief Economist for India at Citi Research.

“The BJP’s major coalition partners are politically unpredictable, sometimes working with the BJP and sometimes against them,” added Rick Rossow, the Chair in US-India Policy Studies at the Center for Strategic and International Studies in Washington.

“The larger parties in his coalition are mostly indifferent on national-level issues and should not hinder economic reforms or security ties with the United States, Japan, and other key partners,” he noted.

Modi, whose election campaign featured religious rhetoric and criticism of the opposition for allegedly favoring India’s 200 million minority Muslims, has taken a more conciliatory approach since the unexpected election result.

“We have won the majority … but to run the country, unanimity is crucial … we will strive for unanimity,” he stated on Friday after the NDA formally named him coalition head.

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