Mixed Fate For Modi's Party In India State Polls As Job Losses Bite

Prime Minister Narendra Modi's Hindu nationalists won a hard-fought battle in two Indian state elections Thursday, but with reduced majorities as a grinding economic slowdown weighed on voters.

Officials counted tens of millions of ballots in western Maharashtra state, which is home to the financial hub of Mumbai, and in Haryana in the north, bordering New Delhi.

In Maharashtra, Modi's Bharatiya Janata Party (BJP) won 105 seats, sharply down from 122 five years ago, the election commission's website showed, leaving its rival Congress party trailing at 44 in the 288-seat state assembly.

They also managed to eke out a win in Haryana, even with Congress winning 31 seats -- a boost from its tally of 15 in the 2014 polls.

With neither side managing to secure a majority of the 90 seats up for grabs in Haryana, the result was on a knife-edge, with party members expected to work late into the night to cobble together a coalition and stake their claim to lead the state's next government.

The BJP was seeking a second term in both states, months after Modi's landslide victory in national polls in May despite a patchy economic record that has seen unemployment hit levels not seen since the 1970s.

The premier was a star campaigner in both states, eager to reassure voters upset over job losses and sluggish growth.

As news of the Maharashtra results trickled in, Modi thanked voters for their "immense affection".

"We are humbled to have got the people's support yet again," he tweeted.

Warning sign for BJP

Scores of saffron-clad BJP workers had turned up at the party's headquarters in Mumbai earlier in the day, with some playing drums and others carrying victory placards and letting off firecrackers.

Still, it was a fraction of the huge crowds that gathered there for state elections five years ago.

Chief minister Devendra Fadnavis told reporters the reduced majority was not a cause for concern.

"This is not a time for analysis but time for celebrations," he said.

In Haryana however, BJP chief Subash Barala -- who lost his seat by more than 50,000 votes -- quit his post Thursday after early results showed the party struggling to carve out a lead, the Press Trust of India reported.

Analysts said the results were a warning for the BJP, which trumpeted its muscular brand of nationalism and aggressive foreign policy towards arch-rival Pakistan in its push to voters.

Political commentator Nilanjan Mukhopadhyay said while Modi's personal popularity had bolstered the party's appeal, the diminished majorities showed "the BJP's political narrative has its limits."

"The... government has to take its economics more seriously. It cannot bluff its way past. Voters are not buying it," he told AFP.

Modi is under mounting pressure to kickstart the economy, which has endured five consecutive quarters of slowing growth, causing India to lose its status as the fastest-growing major economy to China.

The slump has hit automakers particularly hard, with sagging demand forcing companies to halt production, slash prices and cut jobs in a once-booming industry that employs millions, including at major plants in Haryana and Maharashtra.

Exit polls had predicted wins for the BJP, but said the party would have to depend on its allies to form a majority and establish a coalition government in both states.

The BJP retaining power -- even as part of a coalition -- is yet another blow to the Congress party, which has struggled to strike a chord with frustrated voters after dominating Indian politics for decades.