The sameness of the Modi 3.0 govt is a mirage
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The sameness of the Modi 3.0 govt is a mirage

The new cabinet of Indian Prime Minister Narendra Modi is much the same as his old. The ministers for finance, defence, home, and foreign affairs have been retained, giving the impression of policy continuity.

This apparent sameness is a mirage. The outgoing administration was just a one-man show centred on Mr Modi, a powerful, popular leader who didn't much care for institutional checks and balances.

The freshly sworn-in government in New Delhi is very different. Now that the ruling Bharatiya Janata Party (BJP) has fallen short of a parliamentary majority, coalition partners have had to be accommodated with 11 ministerial positions out of a total 72.

The regional parties they represent have their own priorities and agendas. A weak BJP -- and a diminished halo of the third-term PM -- gives them greater bargaining power.

It may also pave the way to new leadership within the world's largest political party.

After the disastrous failure of Mr Modi's parliamentary campaign in Uttar Pradesh, where a socialist party trounced it 37-33, Yogi Adityanath, the chief minister of India's most-populous state, is now critical to reviving the BJP's fortunes.

The hype around Mr Modi's "Gujarat Model" of development, which had propelled the prime minister to power in 2014, is long over. If there is to be fresh myth-making, it will be around how Mr Adityanath is improving law and order and bringing in investment. Losing parliamentary seats will not be career-ending for the 52-year-old monk. As long as he retains the BJP's control over the local administration -- state elections are due in 2027 -- he may be the Hindu right-wing's candidate of choice to replace the 73-year-old Mr Modi.

The leader and his lieutenant Amit Shah, the home minister, aren't entirely out of options. They can instigate defections in the opposition INDIA alliance, led by Rahul Gandhi's Congress Party, to bolster their dominance. For this, though, inducement alone may not be enough.

Federal investigative agencies have been effectively used in the past to strike fear among political rivals. But here again, coalition partners like Chandrababu Naidu and Nitish Kumar may draw the line on arbitrary use of state power, lest it is also used against them.

A near-equal representation for the BJP and the opposition INDIA alliance lawmakers means a greater voice in parliament for Mr Modi's critics, especially if the ruling party has to concede the all-important speaker's job in the lower house to allies.

The judiciary will also flex its independence a little more, as will the pliant Indian media. After the surprise election verdict, Aroon Purie, the editor-in-chief of India Today group, wrote an editorial about "the pervasive sense of fear in society" in recent years. "People talk in whispers in drawing rooms," he noted. "Business people fear getting on the wrong side of the government." Though not everyone is cowering in a corner -- viewers in this election moved in droves to independent journalists and political influencers on YouTube. Even if television anchors don't tire of promoting Mr Modi's personality cult, media owners will.

By not appointing even a single Muslim minister for the first time in the republic's history, the BJP may have signaled that its exclusionary stance toward the country's biggest religious minority is not up for a rethink.

Nor will economic policy under Finance Minister Nirmala Sitharaman change much. Resource-sharing with states may improve a little to oblige regional allies, but the basic blueprint won't change: India will continue to rely upon a small national team to drive growth. That became clear with Gautam Adani and Mukesh Ambani, the two Asian centi-billionaires, attending Mr Modi's swearing-in ceremony. Although unemployment and inflation became big issues with voters, the new government is unlikely to want to upset global bond investors by ramping up welfare spending.

Nonetheless, some prominent members of India Inc -- particularly Mr Adani -- will have to reckon with a rise in political temperatures. Mr Modi's dismal performance in Uttar Pradesh in the north had a parallel in Maharashtra in the west where its seat count shrank by more than half.

If the opposition manages to wrest control of the state in local polls later this year, then Mr Adani's ambitious -- and lucrative -- planned makeover of a sprawling shantytown in Mumbai, the nation's financial capital, could be at risk. Meanwhile, all eyes will be on Amaravati, a shiny new capital that coalition partner Mr Naidu wants to build in southern Andhra Pradesh. The Singapore consortium, which had exited the project in 2019 after he lost control of the state, will have to consider if it's safe to return.

India's election has unmistakably opened new fault lines in the political and business landscape, although looking only at the lineup of top ministers it would be easy to miss the change. Bloomberg

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia.

Andy Mukherjee

Opinion columnist

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services.

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