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Modi’s Party Reclaims Chief Minister Post in India’s Finance Hub

Devendra Fadanvis, left, with Eknath Shinde in Mumbai on Dec. 4. Photographer: Satish Bate/Hindustan Times/Getty Images (Hindustan Times/Photographer: Satish Bate/Hindus)

(Bloomberg) -- Prime Minister Narendra Modi’s Bharatiya Janata Party will appoint one of its senior leaders to head the government in Maharashtra, reclaiming control of the state that houses India’s financial hub of Mumbai.

The BJP’s key ally in the state, the Shiv Sena party, has given a letter of support to “BJP’s nominee for CM position, which is Devendra Fadnavis,” Shiv Sena leader Eknath Shinde said at a press conference on Wednesday. The oath-taking is scheduled for Thursday evening in Mumbai, with Modi in attendance.

The BJP and Shiv Sena have been swapping places as senior partner in their coalition over the past decade, with Modi’s party taking the back-seat of late as it needed to placate its allies to keep the opposition at bay. However a sweeping victory for the BJP in provincial elections in November now puts Fadnavis back in control of a state where billions of dollars are being invested in infrastructure, global companies are looking to list, and which Asia’s richest man calls home.

BJP won 132 of the 288 assembly constituencies in Maharashtra, a gain of 27 seats from the previous election. The Shiv Sena won 57 seats and Nationalist Congress Party held 41, giving Modi’s alliance a thumping majority to form the government.

Maharashtra contributes over 10% of India’s gross domestic product, largely because Mumbai is home to the country’s top conglomerates such as Reliance Industries Ltd. and the Tata Group, the country’s biggest stock exchanges, and Bollywood — the Hindi film industry. Gautam Adani’s empire is building a new airport near Mumbai and has won a bid to overhaul the sprawling Dharavi slum.

The broader state of Maharashtra, however, is struggling due to a high unemployment rate and farmers’ distress.

In the run up to the elections, Modi and his allies have promised a multitude of social welfare programs, including a monthly cash handout of $18 for women. The scale of the win demonstrated that despite a weaker-than-expected win in national polls earlier this year, the BJP and its leaders continue to enjoy widespread support in India.

The opposition alliance, which was routed in Maharashtra, managed to eke out a win in the minerals-rich state of Jharkhand in eastern India.

©2024 Bloomberg L.P.