Indian Prime Minister Narendra Modi tested the public with his controversial banknote policy last year. Now, upcoming state elections will give citizens a chance to grade Modi's leadership on the matter.
Elections in five states—Uttar Pradesh, Goa, Uttarakhand, Punjab and Manipur—kick off this month, with final results due March 11. First up are Goa and Punjab, where polls open on Saturday.
As the country's most populous province and one with the biggest share of seats in parliament, Uttar Pradesh is a political bellwether and will be of most importance for the ruling Bharatiya Janata Party (BJP). Voting there begins Feb. 11.
Because the polls come on the heels of demonetization , that's set to be a major theme. "The state poll results will be a key indicator for the 2019 general election on how people viewed Modi's drive against black money," Bank of America Merrill Lynch (BofAML) summed up in a recent report.
In November, Modi recalled existing 500 ($7.35) and 1,000 ($14.70) rupee notes, which make up 86 percent of Indian currency, and issued new 500 and 2,000 rupee notes in their replacement. The shock announcement, aimed at cracking down on undeclared revenues, caused a drastic cash shortage and economic pain , hitting everything from factory output to consumption.
Public opinion was mixed at the time ; many complained about the impact on low-income citizens and business supply chains, while others praised Modi for his anti-corruption efforts.
Assessing the BJP's chances
Nearly three months on, Modi appears to continue to enjoy widespread support, pointed out Jan Zalewski, senior South Asia analyst at Verisk Maplecroft. Despite poor implementation and widespread ill-effects linked to the currency reform, the Prime Minister is still able to enter the election race on a moral high ground because he branded demonetization as an anti-corruption measure, he continued.
Recent opinion polls indicate victory for the BJP, particularly in Uttar Pradesh, where its primary rivals are regional factions, including the incumbent Samajwadi Party (SP) and the Bahujan Samaj Party (BSP). In the other four states, the BJP faces national opposition parties, such as Congress.
A survey conducted earlier this month by THE WEEK-Hansa Research predicted the BJP to win the battleground state, while a separate survey by Axis-My-India for the India Today Group also projected a BJP majority there. BofAML however offered a more pessimistic take on the BJP's chances in Uttar Pradesh, noting that the race was split three-ways with the SP and BSP.