Terming the Bihar Assembly elections in September-October as ‘critical’ for investors, an India Strategy Report by Emkay Global Financial Services Ltd (EGFSL) has said the State’s economy may be slowing but is unlikely to impact the poll outcome.

The upcoming Bihar elections may be “an occasion” for the BJP to revive the “Modi wave” that got “dented” in the Delhi Assembly polls, said the report.

It added that while the Modi factor still resonates with the youth, caste equations would favour the JD(U)-RJD-Congress combine in the State.

The EGFSL report also found “low probability” of farmers accepting the controversial Land Bill, as also a “weakening purchasing capacity of farmers”.

According to the report, 10 years of Nitish Kumar’s rule saw “exponential” growth in the first term.

“Infrastructure development, improving law & order and better governance attracted migrated Bihar residents to invest in real estate.

“However, the business conditions have been deteriorating sharply in the past one-two years, which is commonly attributed to the break-up of the BJP-JD(U) combine, causing fears of lawlessness coming back to haunt Bihar,” it said, adding: “No big showrooms have opened in the last one year in Patna, for instance.”

Emkay and its affiliates are participants in the Indian securities trading markets.

The report said while the slowing economy is gravitating upper caste and business community toward the BJP, “this factor may not be strong enough to counterbalance the caste dominance in electoral equations”.

Marked swing

Quoting political analysts, the report said while the Bihar polity exhibited a marked swing in favour of the development agenda of Modi in the 2014 general elections, at the State level, the feedback on Nitish government’s development work is also positive.

“Even at the peak of the Modi wave, RJD-JDU-Congress combine got 43.5 per cent vote share in the last Lok Sabha election (2014), ahead of the 38 per cent in favour of the NDA and 29 per cent for the BJP,” it said, adding that there will be more clarity once seat sharing agreements are finalised.