(Adds chief minister, paras 4-6, analyst comments paras 10-13)
By Rupam Jain Nair
AHMEDABAD, India, Dec 23 (Reuters) - India's Hindu nationalists won a state election on Sunday with a comfortable margin, a result that could mean a setback to Congress party plans to call an early national election.
The Gujarat state vote beat most pre-election surveys and TV exit polls, which predicted a closer fight between the Bharatiya Janata Party (BJP) and the Congress party, which is in power federally.
Congress had hoped for a victory to add muscle to its national image after being weakened by its communist allies over a controversial nuclear deal with Washington.
But the BJP won 117 of the 182 seats, compared with 127 in 2002. Congress bagged 59, up from 51 five years ago.
"This is a victory of the 55 million people of Gujarat," Narendra Modi, the controversial and charismatic chief minister of the state, told reporters.
"This is a positive vote. This is a vote to bring the government back to power," he said. "The people of Gujarat rejected negativity, negative propaganda."
In Ahmedabad, Gujarat's main city, Modi's supporters beat drums, danced in the streets and lit firecrackers as the results trickled out.
Many wore masks of Modi, women distributed sweets and children handed out plastic and paper lotuses, the BJP's election symbol.
But many Muslims, who make up about 9 percent of the state's population, said they were dejected.
BIG BOOST FOR BJP
While some analysts fear this victory could once again tempt the BJP to return to its aggressive Hindu nationalist agenda, others were unsure.
"It is a tremendous boost in morale for the BJP, there is no question about that," said independent commentator Prem Shankar Jha. "And morale does play a part in how you perform."
"For the time being, there is a conflict in estimation as to what it could mean," he said. "But my bit is that it's going to be a reinforcement of the line that the BJP should really concentrate on growth."
Congress, which had put up a stiff challenge to Modi, conceded defeat and party spokesman Abhishek Singhvi said it was disappointed and surprised by the victory margin for BJP.
"But electoral victories can never validate the violation of certain basic values," Singhvi said "Lots of people have won several elections but have been judged poorly by history."
The booming, but communally divided western state voted in two stages on Dec. 11 and 16.
A section of Prime Minister Manmohan Singh's Congress party was hoping that a shock win in Gujarat could help it call early national polls which are due by mid-2009.
BJP and Congress launched their campaigns stressing the importance of development but soon began a war of words over Hindu-Muslim divisions, which affects large parts of Gujarat.
Modi is accused of encouraging communal riots in 2002 in which between 1,200 and 2,500 people were killed, most of them Muslims.
Modi won the 2002 state elections, held just nine months after the riots, on an overtly pro-Hindu and anti-Muslim platform.
This time he was thought to be more vulnerable, with several disgruntled party members defecting to the opposition and many of the minority Muslims voting for Congress. (Writing by Y.P. Rajesh, Editing by Matthew Jones)