Seemingly against virtually all odds, the Congress Party and its allies, who started the campaign in a timid position of apparent inferiority and gloom, were swept into power May 13 by a majority of Indian voters unconvinced that Prime Minister Atal Bihari Vajpayee’s slogans and economic prosperity referred to them.

Following their success in the 14th Lok Sabbha elections, they and the country entered a possibly lengthy transition during which a new coalition would be negotiated and a leadership selected to replace the right-wing Hindu nationalist BJP led NDA team.

The first major challenge of the new leadership was a two-pronged one of forming a coalition and reassuring a nervous financial market that economic reforms would be maintained despite a left-of-centre government. A corollary was the position of Sonia Gandhi, heavily contested by the losing side, which had tried to make a campaign issue.

The outgoing alliance had confidently launched the election prematurely in the expectation of benefiting from 8-9% economic growth, the start of a peace dialogue with its rival neighbour Pakistan and a widening middle and professional class that had spread relative affluence and comfort in recent years. It had sprinted as favourites in the campaign on a slogan of “India Shining” that sought to convey a “feel-good” current through the huge 670 million electorate.

To some, the democratic test was rather simplistically one waged between the 200-300 million urban middle class regarded as the main beneficiaries of the BJP-NDA liberalisation and reform of the economy and the remaining 1 billion population, including the estimated 300 million below the poverty line of $1 a day who saw little concrete and tangible in this for them.

The early predictions of uncertainty caused nervous falls in the country’s stock markets, the clear results appeared to restore calm in the economic community which seemed concerned more about instability and an absence of leadership than about the victors themselves. Then the following day of trade saw to sharpest decline in the 129-year history of share trading in the country. Some analysts noted that it was partly the insecurity about the influence of Communists and other left-wing parties on economic policy and simply a market profit-taking after a rise of some 73% over a year. The following day of trade found the markets recovering somewhat.

While much of the BJP-NDA rhetoric also focused on its perception that the Congress leader Sonia Gandhi was unacceptable because of her foreign origins and on the need to maintain the stability and continuity in leadership, the outcome cast Mrs Gandhi in a new light as the leader of the winning forces and the leading candidate to become Prime Minister. Rapidly following her party’s claim of victory and Prime Minister Vajpayee’s resignation, Gandhi said the process of building “a stable and secular government” would begin immediately.

On the major issue of the dialogue with Pakistan, she sought to reassure all that her forces was anxious to continue the negotiations and underlined that they had been for the process all along. A Congress position paper had indicated it favoured discussions with Pakistan based on the Simla agreement of 1972 negotiated with Pakistan by Indira Gandhi. There was some concern inside and outside the country that in the opposition, the BJP would revert to its hardline nationalist policy stance of the past, especially if Vajpayee, 79, chose to retire instead of leading the opposition, leaving the leadership to arch-nationalist L.K. Advani. Some Indian analysts have believed that only a conservative government could be capable of negotiating an agreement and committed to persuade its sceptical constituency to accept it.

Economically, much of the business community appeared relatively certain that the liberalisation and reform of recent years was irreversible despite the Congress Party’s past socialist tendencies. On the other hand, this orientation toward the average public rather than the business world was credited in being a major factor in the grassroots support for it at the polls. But it was expected that Mohanman Singh, a highly-respected former Congress Finance Minister who had launched the country’s reform process in 1991 would be in the Cabinet and perhaps even Prime Minister should Sonia Gandhi not assume that post.

Internationally some leadership and business circles were wondering whether a Congress-led majority would place somewhat less emphasis on pro-business policies and more on populist positions, including in international trade negotiations. In gaining a surprise victory in the state of Andrha Pradesh, the Congress had promised free electricity to rural peasant communities. The Communists Party which had also gained a large bloc of votes in the elections but decided in favour of supporting the government from outside instead of accepting cabinet posts, also indicated some specific demands and pressure points.

One major element being watched by the international community would also be the Indian position in international trade negotiations, in which the previous BJP-NDA Government had taken a strong stance with the developing world against the EU and other industrial countries.

In addition, it was uncertain whether a different leadership would continue the profligate spending spree of the past government on military equipment modernisation to make it a major regional superpower.

The upset stunned and surprised most in the country and around the world. The Times of India termed the “Great Indian Somersault,” and wrote that virtually all foreign embassies had assumed a BJP victory.

All appeared surprised by the outcome forecast since late 2003 when the BJP and its partners won resounding victories in three elections for state government, seeming to confirm the most optimistic scenarios for national support. This included a strong victory in Gujarat, where the Chief Minister had taken a strident nationalist tone against the large Muslim population during and after the extensive communal bloodshed of which he was held at least partly responsible. The sweep convinced the Prime Minister to dismiss the Parliament and call elections earlier than planned. This overconfidence and the miscalculation on the election timing, along with the leadership being seen as out of touch with the public were regarded by some analysts as major factors in the rebuff for the BJP and some allies. This appeared to be evident in the cool reception to what started out as a nationwide victory march by Advani based on the “India Shining” slogan which was embarrassingly abandoned midway through the campaign. Another illustration was the crushing defeat in large state of Andrha Praddesh by its strongest ally in the NDA coalition, Chandrababu Naidu, who had turned the state into a glitzy international urban showcase for the information technology industry and its professional elite but apparently failed to sufficiently cater to the needs of the average Indian public among the otherwise destitute population of 80 million there.

The defeat was particularly resounding in the south of the country especially Tamil Nadu, where the Prime Minister and national leadership were reported to have relied on a noted ideologue but where there is a strong tradition of left-wing or Communist politics.