Edgy Indian state election going down to the wire

AHMEDABAD, India Elections in India's booming but communally divided state of Gujarat are going down to the wire, with TV exit polls after a first round of voting showing a small swing away from the ruling Hindu nationalists.

The vote is being closely watched as a barometer of the fortunes of the country's two main parties ahead of national elections due by mid-2009.

Chief Minister Narendra Modi and his Bharatiya Janata Party (BJP) remain favorites to win the vote in the western state, but there was still a lot to play for when the second round takes place on Sunday, analysts said.

"It is a neck-and-neck fight in Gujarat. A little swing in voting pattern and Modi could be in a tough situation," analyst and pollster Yogendra Yadav told the CNN-IBN channel.

Congress, which runs the national coalition government, is hoping to wrest control of one of India's richest states away from the BJP.

Exit polls, often unreliable in the past, showed the BJP winning between 40 and 48 seats in the first round held on Tuesday, down from 54 in the last election in 2002, against between 37 and 43 for Congress, up from 30.

A controversial figure, Modi has been accused of encouraging Hindu-Muslim riots in 2002 in which between 1,200 and 2,500 people were killed, most of them Muslims.

He swept back to power with 127 seats in the 182-seat assembly in elections later that year, on an overtly pro-Hindu and anti-Muslim platform.

This time around, he had begun his campaign with a much more moderate message, boasting of good governance, industrialization and rural development.

But in the last week, he has returned to the familiar ground of Hindutva, the BJP's Hindu revivalist philosophy, accusing the Congress-led central government of being soft on Muslim terrorists.

HINDU MAGIC

Ajay Umat, editor of the Gujarati-language newspaper Divya Bhaskar, predicted more of the same as Modi tried to swing Hindus behind him in a close race.

"Narendra Modi will win but he has to work hard for it. He has to deliver more fiery speeches to win the battle against Congress," he said. "The more the spice of Hindutva, the tastier the victory."

The key to the elections could be central Gujarat, the epicenter of the 2002 riots, which swung heavily behind Modi last time around in the aftermath of the violence.

Analysts say Modi's Hindutva message still resonates with many voters in central Gujarat.

"He will get 105 seats," says Sunil Parekh, a business consultant in Ahmedabad, Gujarat's main city.

"It is in these seats that Modi's magic works. The Congress is very weak and the wave of hardline Hindu sentiment is his ticket to victory."

But Mahesh Rangarajan, a history professor at the University of Delhi and a leading political analyst, was less sure about Modi's chances.

He says exit polls often overstate support for the BJP because they tend to be biased towards urban, middle-class voters.

"I think he's in trouble," he said, predicting a close race.

The campaign turned nasty last week when Congress chief Sonia Gandhi called Modi's government "merchants of death".

Modi responded by calling Congress "guardians of terrorists" and justified the extra-judicial killing of a suspected Muslim criminal, which his government has already admitted came about during a staged gun battle.

India's Supreme Court will hear a petition on Wednesday to include Modi as a co-accused in the murder case. Three senior police officers and 10 policemen are in jail awaiting trial in the case.

Votes will be counted on December 23.

(Additional reporting and writing by Simon Denyer; Editing by Alex Richardson)