Mixed fate for Modi's party in India state polls as job losses bite

Prime minister Narendra Modi's party faced mixed fortunes in two Indian state elections, with his party on course to see reduced majorities as a grinding economic slowdown weighed on voters.

An official count of tens of millions of ballots was underway Thursday in western Maharashtra state, which is home to the financial hub of Mumbai, and in Haryana in the north, bordering New Delhi.

Modi's Bharatiya Janata Party (BJP) won or was ahead in 103 seats in Maharashtra, down from 122 five years ago, the election commission's website showed, leaving its rival Congress party trailing with 40 in the 288-seat state assembly.

But in Haryana, the two parties were neck and neck, with each leading 35 of the 90 seats up for grabs -- a boost for the Congress which won only 15 seats in the 2014 polls.

The BJP is seeking a second term in both states, months after Modi secured a landslide win 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.

Scores of BJP workers turned up at the party's headquarters in Mumbai dressed in saffron tunics, with some playing drums and others carrying victory placards and letting off firecrackers in anticipation of the final results.

- Warning sign for BJP -

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

In Haryana, BJP chief Subash Barala -- who was trailing by more than 30,000 votes in his own constituency -- 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 sign 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 said.

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.

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