AFP, NEW DELHI: India's finance minister vowed Monday to push ahead with much-needed reforms after his party's drubbing at a key weekend state poll hiked fears of a slowdown in the government's promised agenda.
The ruling Bharatiya Janata Party (BJP) suffered a shock defeat at assembly elections in one of India's biggest and poorest states after a no-holds barred campaign fronted by Prime Minister Narendra Modi.
Analysts said the loss was a blow to Modi's appeal as an invincible vote-winner after he stormed to power at last year's general election with the biggest mandate in 30 years.
Galvanised opposition parties are now expected to step up efforts to derail the government's plans to push economic reforms through the national parliament, which reconvenes on November 26 for the winter session.
India's stock exchange fell as much as 2.3 percent in Monday's morning session on news of the BJP's defeat but recovered towards closing.
Finance Minister Arun Jaitley said the government would press on with initiatives including a long-awaited national sales tax despite lacking the numbers in parliament's upper house. Jaitley also rejected that the election was a referendum on the Modi-led government's 17 months in power.
"I don't see it as a setback to the economy... structural reforms will continue.
They should continue at a rapid pace," Jaitley said in an interview with ET Now TV network.
"Every election is not a referendum. A state election is not a referendum. You are not contesting on any one issue."
A coalition of rival regional parties clinched 178 seats in the 243-seat Bihar assembly, more than triple the number
of the BJP's 53.
Modi turned the month-long election into a test of his popularity, fronting some 30 rallies during the campaign and promising billions of dollars in investment.
But the campaign shifted to issues along religious and caste lines, which have traditionally dominated the state of 100 million people.
"Narendra Modi no longer seems like the juggernaut we saw when he came to power in 2014," analysts from the
Centre for Policy Research think tank wrote in the Hindu newspaper. "The drubbing in Bihar significantly weakens the BJP's position at the centre.
Many policies that it had hoped to push through are now likely to be blocked or compromised."