TIME India

Here’s Why the Legislative Election in Bihar State Is Going to Be So Important for Indian Politics

Indian Prime Minister Narendra Modi faces his biggest test since assuming office last year

As the eastern Indian state of Bihar — the country’s third largest, with over 100 million people — prepares to elect a new legislature on Sunday, the entire country will be watching with bated breath.

One month and five phases of voting after it began, the election represents the sternest test India’s Prime Minister Narendra Modi has faced since he swept into office in last year’s general elections, when his Bharatiya Janata Party (BJP) won a landslide national victory.

The new chief minister of Bihar will be chosen from the party that wins the most seats in the state assembly. But this year, the BJP and the National Democratic Alliance (NDA) it leads have decided to make Modi the face of their Bihar campaign rather than letting a chief-ministerial candidate appeal to the voters. The person who takes that top job will be announced only if and when the BJP wins, making this state-level election all about the Prime Minister himself.

If the gambit pays off, it could pave the way for the party’s strategy in subsequent elections in other states.

Here’s what’s at stake, and why this election is so important to Modi’s tenure.

1. Modi needs this win to further his reform agenda.

Although he was elected to the country’s leadership on a platform of economic progress and prosperity, and has raised India’s profile as an international business destination, Modi’s push to make domestic and foreign investment easier has run into parliamentary roadblocks.

Despite winning a majority in the lower house of Parliament, the BJP has only a minority of seats in the upper house — where Bihar has 16 out of 245 seats. As a result, key economic reforms — most notably a major land-acquisition bill and a goods and services tax — have repeatedly been stymied by the opposition, because all bills must pass both houses to become law.

Winning the state may not single-handedly remove Modi’s obstacles to reform but will definitely be a significant step toward achieving that goal.

2. He is facing accusations of escalating intolerance.

The weeks leading up to (and during) the election have thrown up a laundry list of communal issues that have dogged Modi not only within his country but also among the international community.

Four Muslim men have been lynched over the past six weeks over rumors that they killed or stole cows or ate beef, which the country’s Hindu majority finds highly offensive because the animal is considered sacred in Hinduism. The latest murder took place this Thursday. Modi has faced censure not only for his own silence (broken by statements many perceive as lackluster and inadequate) but also for controversial proclamations by members of his right-wing Hindu nationalist party on the eating of beef.

Prominent individuals from several fields, including writers, artists, filmmakers and scientists — also as recently as Thursday — have returned major national awards and lodged formal protests against what they say are growing threats to freedom of expression.

The right to consume beef has become an election issue as well, with Modi and his political opponents trading barbs over it and the Election Commission reportedly investigating a newspaper advertisement by the BJP maligning an opposition candidate on the topic.

The controversies have begun affecting the country’s business environment as well — Moody’s Analytics, an economic research firm said last week that Modi risks losing “domestic and global credibility” if he doesn’t mitigate the climate of intolerance and the behavior of his party members.

While Modi’s government dismissed the Moody’s report as the opinion of a “junior analyst,” the firm stood by its conclusions. Some of the country’s top business heads have also begun expressing concern about intolerance.

3. He is facing a formidable opponent who could pose a challenge to his Prime Ministership in the future.

Modi and his party are hoping to unseat incumbent chief minister and former BJP ally Nitish Kumar, who broke away from their coalition in 2014 when Modi was declared the party’s prime-ministerial candidate.

Running for a third consecutive term in Bihar, Nitish is hugely popular for engineering an economic turnaround and making it India’s fastest-growing state last year — not unlike the rapid development Modi is credited with bringing about during his four terms as leader of the western state of Gujarat.

With the so-called “Gujarat model” playing a significant role in Modi’s march to the Prime Minister’s office — and the expectation that he can replicate that progress at a national level — India is familiar with the narrative of a powerful, capable state leader rising to the nation’s highest political office.

Nitish has also allied with the Rashtriya Janata Dal (RJD) party of former Bihar chief minister Lalu Prasad Yadav, and the national opposition Congress Party, to create what they call a “grand alliance.” Yadav and his party have traditionally enjoyed the support of the state’s lower castes and a portion of the Muslim minority population, and they have been capitalizing on the dissent against Modi and the BJP’s perceived Hindu extremism while also painting them as “outsiders” who do not know Bihar and its issues.

Kumar’s return as chief minister could pave the way for his potential bid to become the South Asian nation’s leader when Modi’s current term concludes in 2019, while a defeat would almost certainly dash his further ambitions and provide a crucial fillip to Modi’s slowing rise.

With exit polls late Thursday showing very little difference between the two top contenders, both parties remain optimistic about their chances. This year saw a record voter turnout of 57%, which the Modi side sees as a sign that the people want change but Kumar’s camp is projecting it as a desire to ensure the BJP does not come to power.

Read next: Behind TIME’s Cover With Indian Prime Minister Narendra Modi

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