NEW DELHI – India's ruling Congress-led coalition and its main rival jostled for new allies on Thursday to boost their possible parliamentary numbers after exit polls said both would fall well short of a majority.
The probable lack of a clear winner has stoked concerns that the coalition that emerges after a month of elections may be unstable and soft-pedal on the next stage of reforms in Asia's third-largest economy, which is striving to be a global player.
India's largest communist party signaled it would do everything possible to stop the opposition Hindu-nationalist Bharatiya Janata Party (BJP) from coming to power.
Three exit polls on Wednesday showed Prime Minister Manmohan Singh's coalition slightly ahead of the BJP alliance, but both groups needed smaller allies to gain a parliamentary majority.
The left parties and our allies in the Third Front will not give BJP an opportunity to exploit the post-poll situation to install its government, Prakash Karat, chief of the Communist Party of India (Marxist), told The Economic Times newspaper.
The left has always seen the pro-business BJP, which shot to prominence on a Hindu revivalist campaign in the 1980s, as an extremist religious group.
A weak coalition that eventually emerges may have little room to maneuver on the economy and be unlikely to push reforms such as privatization and raising the foreign investment limit in the insurance sector.
It's all very fluid. Any coalition that comes will be dependent on their constituents and to that extent there could be difficulties. But whatever coalition emerges it has to be followed by another mid-term poll, said political analyst Kuldip Nayar.
Indian shares shed 1.2 percent as investors grappled with the possibility of a weak coalition government emerging from the elections, unable to push reforms and boost sagging growth.
Things are likely to change by the hour due to changing allies, open-ended alliances and regional parties wanting a bigger role, said Rohini Malkani, an economist at Citigroup Global Markets.
Exit polls have a mixed history in India. Most predicted a win for the then incumbent BJP government in the last election in 2004 but the BJP lost and was ousted.
The count for the 2009 ballot is set for Saturday.
Results for the 545-member lower house of parliament should be known then. A party or coalition needs the support of 272 lawmakers to rule.
Some analysts said the BJP-led coalition was more savvy at alliance building and may have greater success even though the polls show it to be trailing the Congress by a slender margin. The Congress may have to cast its net far and wide to stay in the hunt, one said.
For Manmohan Singh or any other person to become prime minister of a Congress-led government, it does not look possible without support from the left, political analyst Mahesh Rangarajan told Times Now TV news channel.
It also does not look possible without support from some other parties, parties who have left the Congress, or parties who have not been with the Congress.
The communists, who supported the Congress-led alliance for more than four years before angrily parting ways over a civilian nuclear deal with Washington last year, had ruled out backing any future Congress coalition.
But exit polls showed the election may have bruised them, leaving them less hostile to a Congress-led coalition.
Two other parties, the caste-based Bahujan Samaj Party led by the mercurial Mayawati and the All India Anna Dravida Munnetra Kazagham headed by former actress J. Jayalalithaa, may hold the remainder of the balance of power.