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NEW DELHI (Reuters) - The Congress party was trailing in Uttar Pradesh as counting of votes got under way on Tuesday, a stunning blow to Rahul Gandhi who had staked his political future on reviving his party's fortunes in the state.
Following are reactions to the results in UP and other four states, just a week before the unveiling of the budget:
"Our sense is that it will be very difficult for the Samajwadi Party to form a government without outside support from the Congress, and if that happens, the Congress is likely to continue to get the support of the Samajwadi Party at the centre.
"That will ease the constraint on the UPA (United Progressive Alliance) government of always giving in to demand of allies like the Trinamool Congress. We can expect the budget to be slightly more reformist as compared to what was expected.
"I think for the next one year, the UPA government can take a more categorical stance, which is slightly positive for the reform agenda."
"Early indications that the centre ruling party Congress has fared poorly in the crucial U.P. (Uttar Pradesh) assembly elections pose fresh headwinds for the administration, with an anti-incumbent wave likely at play (at the centre).
"The poor showing also signals that the masses are demoralised by delay in reforms, price pressures and string of corruption cases in recent months.
"Against this backdrop, there is a risk that the government might opt for a more populist budget and rethink any possible decisions to trim subsidies, which might hurt their support base at the grassroot level.
"The coalition administration will be hard at work in the run-up to the parliamentary elections in next two years, with odds skewed for another overshoot in FY13 fiscal deficit, at least over 5.0% of GDP."
D.S. RAWAT, SECRETARY GENERAL OF THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA (ASSOCHAM)
"Surely, it is a huge setback to the youth leader (Rahul Gandhi) as the Congress party has been at the forefront of the government. Because Rahul Gandhi has been projected as a leader, he must take the responsibility and ensure that pro-people reforms are implemented now.
"Congress' image has been badly dented by the corruption scams. They had not been pushing the reforms process for the last two years. People are affected by inflation also."
SRIVIDYA RAJESH, FUND MANAGER AT SUNDARAM BNP PARIBAS ASSET MANAGEMENT IN CHENNAI
"As long as Congress and SP (Samajwadi Party) are together in UP (Uttar Pradesh), it will be fine for Congress. The biggest thing is that a hung parliament is avoided. It all depends on how much dependence SP is going to have on Congress. If they get an absolute majority, then I think it will be a little difficult to expect too much reforms."
For Congress, it's not as negative as it looks to be. The market is happy that SP will be dependent on Congress, which might help the government pass reforms and positive economic policies."
"It has been a disaster for the Congress, it's an even bigger disaster for Rahul Gandhi and the Gandhi family."
"They were banking on success in these elections, hoping to get at least four out of five states. It has gone exactly the opposite way. It shows that there is no charisma left in the Gandhi family.
"The tricks that Rahul played -- tearing up manifestos, cobbling together the most backward castes -- has not helped. The party played all its cards very crudely and wrongly. The blame has to borne by the Gandhi family and Rahul himself."
"It's time for Congress to perform or perish."
"If this budget doesn't give any direction to the economy, Congress is likely to find itself in a mess in 2014, because next year's budget would be too late to do anything substantial for the economy."
N.R. BHANUMURTHY, NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY
"Following the state assembly election results, the unpopular reforms might be postponed to some extent like FDI in retail and deregulation of diesel prices.
"It breaks the confidence of the government. Still it can go ahead in the budget by taking measures to contain inflationary pressures, which could be building up again. The fiscal deficit is already out of hand. There is no other option but to contain it."
Reporting by Arup Roychoudhury, Sanjeev Choudhary, Annie Banerji, Anurag Kotoky and Manoj Kumar; editing by Malini Menon