India's Naidu, Vajpayee's Ally, Faces Defeat in Andhra Polls

Articles: India's Naidu, Vajpayee's Ally, Faces Defeat in Andhra Polls

Posted by admin on Tuesday, May 11, 2004 - 03:54 AM

May 11 (Bloomberg) -- N. Chandrababu Naidu, who wooed Microsoft Corp. and Oracle Corp. to set up software centers in Andhra Pradesh, was set to lose control of the southern Indian state to the Congress party, as counting proceeded in state polls.
Sonia Gandhi's Congress led in 93 of 158 seats, indicating the party is headed for a ``landslide'' win, the NDTV 24x7 channel said. The Telugu Desam, which has been ruling Andhra Pradesh since 1995, was leading in 51. A minimum of 148 seats is needed for a majority in the 294-member house. The results are critical not just for state Chief Minister Naidu but also for Prime Minister Atal Bihari Vajpayee's national coalition. With 29 seats in India's 543-member national parliament, Naidu's Telugu Desam Party is Vajpayee's biggest ally. Losing control of the state assembly would suggest Naidu's party may also win fewer parliament seats when results for those polls are announced Thursday, forcing Vajpayee to look for broader support to retain power. ``Economic issues are only one factor in Indian politics,'' said P.K. Basu, managing director of Robust Economic Analysis Pte. in Singapore. ``In Andhra the issue that changed the dynamics was the old emotive issue of a separate Telangana state.'' During the current elections, one of Naidu's cabinet ministers defected and formed his own party to champion the Telangana cause, a demand that has been simmering for almost half a century. Its backers want a separate province in the northern Andhra Pradesh, saying the region has lagged the rest of the state because it has been starved of development funds. Majority India's ruling coalition may fall short of a parliamentary majority by as many as 42 seats, more than previously forecast, exit polls indicated after the final round of voting in the world's biggest election yesterday. Vajpayee's Bharatiya Janata Party and its 15 allies may win 230 to 250 seats, NDTV 24x7 said yesterday. The coalition may win 248 seats, according to an exit poll by Aaj Tak television, which predicted as many as 268 for the ruling alliance after Wednesday's fourth ballot. Naidu, 54, has won acclaim for making Hyderabad, the Andhra Pradesh state capital, a center for information technology, similar to Bangalore, capital of neighboring Karnataka state. He made a presentation before Microsoft Corp. chairman Bill Gates in 2002 and convinced him to start a software development center in Hyderabad. His efforts also resulted in International Business Machines Corp. and Oracle Corp. setting up business centers in the state. U.S. President Bill Clinton visited Hyderabad in 1999. No Jobs Still, Naidu's efforts to boost information technology has done little to boost jobs in the state. The state's unemployment rate widened to 8 percent of the working population in the year ended March 2000 from 6.7 percent in March 1994, India's Economic Survey said in February 2003. The Andhra assembly election results ``are important to the extent Telugu Desam is an important part of the ruling coalition,'' said Rajat Jain, chief investment officer at Principal Asset Management in Mumbai, which has the equivalent of $806 million in Indian stocks and bonds. Jain said a loss for Naidu may weaken the ruling coalition's resolve to hasten economic change, including the sale of state assets and efforts to cut subsidies to trim the budget deficit. Andhra Pradesh is one of four Indian states that have held local assembly polls in the past three weeks, along with the general elections. The others are Karnataka, Orissa and Sikkim. Counting of votes in Andhra Pradesh started at 8 a.m. local time. Votes will be tallied in the other three states on Thursday, along with those for parliament.

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