Triumphant AAP, Shell-shocked BJP and Embarrassed INC
The newly formed Aam Aadmi Party (AAP), led by Mr. Arvind Kejriwal, won an unprecedented sixty seven out of seventy seats in the Delhi provincial elections earlier this month, securing an absolute majority. The Bharatiya Janta Party (BJP) won the remaining three seats. The main national opposition party, the Indian National Congress (INC), which had previously ruled Delhi for fifteen years, did not win a single seat. 

In the run-up to the Delhi elections, the BJP was widely considered a favorite to win, especially since it won all seven parliamentary seats in Delhi during the general elections last year and emerged as the single largest party during the Assembly elections in December 2013. In an attempt to counter   AAP’s clear momentum going in to the last stage of the campaign, the BJP announced that Kiran Bedi, India's first female Indian Police Service officer, anti-corruption activist and Magsaysay awardee, would be its candidate for Chief Minister. Despite her name recognition and popularity, she failed to bring the hoped-for votes, losing her constituency. 

This loss is the first major setback for the ruling BJP, after it overwhelming win in the general elections last year. The BJP was successful in assembly elections in Maharashtra, Haryana and Jharkhand, and registered its most significant support ever in Jammu and Kashmir. Although most exit polls predicted a defeat for the BJP, the margin of AAP’s victory was surprising.

Delhi has remained under the President’s rule since February 2014, when Arvind Kejriwal resigned as the Chief Minister of Delhi after failing to pass his legislative agenda. In the recent elections, AAP’s share of the vote rose to fifty-four percent from thirty percent in December 2013, the BJP’s share remained almost the same and INC’s plummeted to ten percent from twenty-five percent in the past elections. INC’s previous supporters and other regional parties switched allegiance to AAP, which consolidated the entire anti-BJP vote by presenting itself as the only credible alternative. This is an example of the peculiarity of the “first-past-the-post” system (in other words, the candidate with the highest number of votes takes the seat) of Indian politics which explains why the BJP managed to get just three seats this time around despite maintaining its vote share.

Implications at the National Level
There are three major areas in which the Delhi results are expected to have an impact on national polity: reaction of the opposition parties inside and outside parliament; reforms in the forthcoming budget; and timelines for fiscally prudent but unpopular measures like rationalizing subsidies.The results in the small but high profile territory of Delhi have emboldened BJP’s political opponents, especially other regional parties, and put additional pressure on Mr. Modi to deliver on his agenda. The Delhi elections did see regional parties like the Trinamool Congress (West Bengal), the Communist Party of India (Marxist) and the Janta Dal United (Bihar) offer tactical support to the AAP. The result may also unite the opposition inside parliament, providing opposition leaders the opportunity to highlight the result as a referendum on the National Democratic Alliance (NDA) government’s performance at the center during the forthcoming budget session. Separately, anti-corruption activist Anna Hazare has decided to launch a two day protest in Delhi against the land ordinance passed by the NDA on February 24, just before the budget session of the parliament starts. Both Arvind Kejriwal and Kiran Bedi came into the national limelight when Anna Hazare launched his Jan Lokpal movement in Delhi four years ago. 

The NDA government is scheduled to present its first full budget for 2015-16 on February 28, which will unveil the government's strategy to boost economic growth. In the wake of the AAP’s defeat, several experts questioned whether the government would resort to populism in the upcoming budget. However, in a joint press conference with U.S. Treasury Secretary Jacob Lew at the end of the fifth Indo-U.S. Economic and Financial Partnership meeting, Finance Minister Arun Jaitley clarified that the defeat in the Delhi elections will not slow the government’s economic reforms agenda. The Delhi elections should have a limited direct impact on national policy-making, as Delhi only contributes three members to the opposition controlled Upper House of the parliament and the NDA still holds the majority in the Lower House.

However, the Delhi results may prompt the NDA government to push bitter-pill reforms like rationalizing food and fuel subsidies as soon as possible so that they have minimum electoral impact during the forthcoming assembly elections. States that control about half of the seats in the Upper House will go to the polls in the next three years, starting with Bihar in December 2015, West Bengal in 2016 and India’s most populous state, Uttar Pradesh, in 2017. Those three states account for sixty-three seats in the Upper House and the BJP would prefer to deliver on some of its electoral promises in time for these elections.