Made Wrong Assumption About Grand Alliance: BJP on Bihar Defeat

"The main reason for defeat seems that in 2014 Lok Sabha elections, the RJD, JDU and the Congress were fighting independently," Finance minister Arun Jaitley said. "We were wrong in thinking the Grand Alliance won't be able to consolidate votes due to other small and regional parties."

The meeting was expected to discuss who is to blame for the party's biggest political setback since it won a massive mandate last year in the national election. But a top source said the issue was not discussed. BJP leaders said a short discussion was held on the Bihar result and a detailed diagnosis would follow soon.

There were expectations that action would be taken against rebels in the party like Shatrughan Sinha and RK Singh - leaders from Bihar who criticised and embarrassed the party in the run-up to the election. Mr Jaitley said there was no discussion about any action against ministers.

Mr Jaitley also indicated that the poll loss would not impact the possibility of Amit Shah not getting a second term as BJP president; his term is ending in December. Earlier in the day, BJP chief Amit Shah presented a preliminary assessment of the Bihar debacle to RSS chief Mohan Bhagwat.

The Bihar defeat is expected to galvanise opposition parties ahead of Parliament's winter session and five state elections next year, with the loss being seen as a blow to PM Modi's appeal as an invincible vote-winner.

"I don't think it was a mistake at all" for the Prime Minister to be the face of the campaign, Mr Jaitley had said today, rebutting those who said the BJP turned the Bihar contest into a prestige battle that has severely dented the PM.

The opposition is expected to use the Bihar mandate to block important bills like the Goods and Services Tax, the biggest overhaul of taxes since independence. Investors are already fretting over the delay in reforms and Bihar adds a stumbling block.

The defeat is a blow to PM Modi's attempt to win most state elections in the next three years to gain full control of parliament and push key reforms. The government is in a minority in the Rajya Sabha or upper house which is selected by state assemblies.

Bihar was seen as the BJP's best chance to win a state election before 2017, when Uttar Pradesh votes. Elections will be held in five states next year, including Kerala, Tamil Nadu and West Bengal, where the BJP has so far failed to make big inroads.

The regional 'Grand Alliance' of Nitish Kumar and Lalu Yadav along with the Congress is being seen as a template for parties seeking to prevent PM Modi's march towards untrammelled power in states.