Modi’s tumble good news for India’s economy

The veneer of strongman invulnerability that cloaked India’s Narendra Modi for nearly a quarter century is crashing down around his Bharatiya Janata Party (BJP).

Markets are already expressing their disappointment at Modi’s party losing its majority in parliament, forcing the prime minister to rely on allies to form a government. A BJP coalition has secured enough seats to form a government – if it can hold things together.

Modi’s party fell short of the 272-seat majority on its own. The National Democratic Alliance, led by BJP, seems on course to secure 293 seats. The opposition Indian National Developmental Inclusive Alliance may win 229 seats.

It’s something of a political “black swan” for a man who’s dominated Indian politics since 2014. But also whose legend had loomed large since the early 2000s, back when he became chief minister of Gujarat.

The economic successes of the western state on Modi’s watch endowed him with folk-hero status that captivated the nation. Year after year from 2001 to 2014, Modi’s policies often generated faster gross domestic product, greater productivity and innovation, less bureaucracy and corruption, and better infrastructure than the national averages.

In 2014, voters returned the BJP to power in hopes Modi would apply the “Gujarat model” throughout Asia’s third-biggest economy.

Clearly, the last decade didn’t go as many of India’s 1.4 billion people had hoped. Modi’s inability to win a majority of parliament seats this time speaks to the widening gap between soaring rhetoric about economic reforms and implementation on the ground. Modi’s Gujarat model, it seems, isn’t as scalable as voters had hoped.

Yet there’s a silver lining to Modi’s election fail: forcing Modi’s inner circle to