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Congress win in Maharashtra helps national clout

BOMBAY, Sunday (Reuters,PTI)

India's ruling Congress party, flush with an election win in the state that is the heart of finance and film, will now be better armed to deal with demanding communist allies, newspapers and analysts said on Sunday.

The victory in Maharashtra state, India's second-most populous, was good news for flagging economic reforms, they said.

"There will be more stability in the federal government now and the Congress can dictate its own policies which is good news for the economy," said D.H. Pai Panandikar, president of the private economic think tank, the RPG Foundation.

"The message is that the Congress is the preferred party of voters and that augurs well for reforms." The Congress, along with its regional ally the Nationalist Congress Party (NCP) won 141 seats in the 288-member assembly in Maharashtra, India's second-most industrialised state with 100 million people.

The alliance defeated the Hindu nationalist Bharatiya Janata Party (BJP) and its hardline Hindu ally, the Shiv Sena, which jointly picked up 117 seats.

Independents won 30. The BJP has yet to recover from its shock defeat in May in general elections.

The Times of India said the Maharashtra win would give Congress president Italian-born Sonia Gandhi and Prime Minister Manmohan Singh more confidence in dealing with the communists, who provide key outside support to the left-leaning federal coalition. "Today, Sonia has arguably emerged as the tallest leader in the country. It's with this new stature that she can deal with her allies and opponents," the newspaper said on its front page.

The communists, who won a record 60 out of 545 parliament seats in the federal elections, have stalled key reforms proposed by Singh, who launched India's economic reforms in 1991.

These include moves to expand foreign direct investment limits in the fast-growing insurance, aviation and telecom sectors.

However, the Congress victory in Maharashtra could be marred by wrangling over who should head the state, a region eyed hungrily by political parties because it contributes 12 percent of gross domestic product and pays two-thirds of corporate taxes.

The NCP won 71 seats in the state poll, two more than the Congress, prompting it to demand the chief minister's chair.

To sort out possible misunderstandings, Gandhi will meet Sharad Pawar, the chief of the NCP and federal food minister, on Sunday in the Indian capital.

Alliance leaders were putting an optimistic spin on the contest for the chief minister's job in Maharashtra, which is the size of Germany and the Netherlands put together.

"We've ruled together for five years and we've had a good understanding. So this issue can also be amicably sorted out," Praful Patel, aviation minister and senior NCP leader, told reporters. "But the fact is that we have won more seats."

Meanwhile Prime Minister Manmohan Singh said that the people of Maharashtra have given a "crushing defeat" to communal forces and a "decisive victory" to Congress and its allies.

"The people of Maharashtra have given a crushing defeat to communal forces, to forces which wanted to divide our country on the basis of religion and caste," he told reporters after the Assembly election results were out in Maharashtra.

"It is a very happy day for Congress and its allies," Singh said.

He thanked Congress President Sonia Gandhi for the extensive campaign undertaken by her and the support the party got from NCP leader Sharad Pawar.

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