Why did the communist party lose in Telangana in India's first general elections?
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Accepted answer
First of all, starting a violent rebellion and winning an election is two completely different things. A party that does one thing is not in any way guaranteed to do the other, especially if they are perceived to have lost the fight, or been fighting without cause.
As such, the question is a bit strange in the first place.
Secondly, you ask if people lost faith in the Communist Party, but looking at the State elections in 1952, they got 20% in Hyderabad and that doesn't seem like a party who people have lost faith in at all, and I see no real indications that the party was significantly more popular earlier.
So I don't think the CPI declined in any way. Rather the opposite. They supported and instigated a violent rebellion in 1946, and this rebellion seems to have been so popular that in 1952 they gained 20% in a state election, even though the rebellion only took place in one of the three regions of the state, and despite the fact that the party was anti-democratic and violent only two weeks before the elections started.
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