May 19, 2018 / 1:01 PM / 3 months ago

Modi's BJP drops bid to govern big southern Indian state

NEW DELHI (Reuters) - The chief minister of India’s southern Karnataka state quit on Saturday after just two days in office, rather than face a confidence vote his minority Bharatiya Janata Party (BJP) was unlikely to win.

Supporters of India's main opposition Congress party protest against India's ruling Bharatiya Janata Party (BJP) leader B.S. Yeddyurappa's swearing-in as Chief Minister of the southern state of Karnataka, in Kolkata, India, May 18, 2018. REUTERS/Rupak De Chowdhuri

The move could allow the main opposition Congress party, which ruled the state for the past five years, and a regional party to form the government. They have 117 seats in the 225-seat state legislature.

The alliance could galvanise opponents of Indian Prime Minister Narendra Modi ahead of a general election that must be held by May next year.

Outgoing Chief Minister of the southern state of Karnataka Siddaramaiah attends a protest against India's ruling Bharatiya Janata Party (BJP) leader B.S. Yeddyurappa's swearing-in as Chief Minister of the southern state of Karnataka, in Bengaluru, India, May 17, 2018. REUTERS/Abhishek N. Chinnappa

Some analysts, however, said the Karnataka developments were unlikely to hurt the prospects of Modi’s BJP next year, but investors will be closely watching elections in three other major states this year.

“The impact of the Karnataka political outcome will be short-lived,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

“From now on, till elections to Madhya Pradesh, Rajasthan and Chattisgarh later this year, economics will dictate the direction of the market (rather) than politics.”

Newly elected Karnataka lawmakers had been due to hold a “trust” or confidence vote in the assembly on the orders of the Supreme Court, which intervened after the opposition had protested the state governor’s decision to invite the BJP to form a state administration.

India's main opposition Congress party's leaders K. C. Venugopal (2-L), Ghulam Nabi Azad (C) and outgoing Chief Minister of the southern state of Karnataka Siddaramaiah lead a protest against India's ruling Bharatiya Janata Party (BJP) leader B.S. Yeddyurappa's swearing-in as Chief Minister of the southern state, in Bengaluru, India, May 18, 2018. REUTERS/Abhishek N. Chinnappa

Karnataka BJP leader B.S. Yeddyurappa, who had been sworn in as the chief minister on Thursday, said he would resign rather than try to prove that he had the support of a majority of the legislators.

The BJP, which rules 21 of India’s 29 states, emerged as the single largest party in Karnataka, but its 104 seats left it short of a majority. Karnataka, home to India’s technology hub of Bengaluru, is the only southern state where the BJP has held power.

In an emotional speech carried live by most Indian TV news channels, Yeddyurappa said his party would now work towards increasing the number of parliamentary seats for the BJP in the state to help Modi’s re-election bid.

Congress chief Rahul Gandhi hailed Yeddyurappa’s decision as a victory.

“I am proud that they have been shown that in India power, corruption and money is not everything but the will of people is everything,” he said in a rare news conference.

Additional reporting by Promit Mukherje and Devidutta Tripathy; Editing by Andrew Bolton and Jon Boyle

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