NEW DELHI (Reuters) - After trailing for weeks, India's Hindu nationalist opposition may now be gaining momentum against a fumbling ruling Congress party-led coalition thanks to some savvy alliance building.
The Bharatiya Janata Party-led (BJP) alliance, which ruled India from 1998 to 2004 on a pro-business platform, was plagued by internal dissension, withdrawals and poor campaigning just a month ago, and polls gave Congress an advantage.
But on the eve of the last stage of the staggered month-long election, the BJP has won over more allies, showcasing them at a large rally in northern India last Sunday, in marked contrast with the squabbling inside the Congress-led coalition (UPA).
After initial organisational hiccups, the BJP has managed to unite and has boosted its campaign firepower with a media blitz. Potential allies have taken heart from internal surveys that show the party doing better than expected, BJP insiders say.
The two main national parties, Congress and the BJP, only won around a quarter of the votes each in the last 2004 general election, so their ability to secure coalitions with regional and caste-based parties will be key to forming a government.
"The indications on the ground is that it will be a hung parliament," said BJP top election strategist Sudheendra Kulkarni. "So everything will depend on the party's ability to maintain alliances -- and the UPA is in complete disarray."
In the last few weeks, smaller parties -- many motivated by political expediency -- have joined the BJP-led National Democratic Alliance (NDA) with the perception the Hindu nationalist party has a better chance of forming a government.
The regional Telangana Rashtra Samithi (TRS) party decided to join the NDA in the swing state of Andhra Pradesh.
"We lost one ally but got five," BJP prime ministerial candidate L.K. Advani told Sunday's rally, referring to a flurry of alliance switching.
With no exit polls allowed during the election, predicting the result is notoriously difficult.
Many investors would be happy to see a stable coalition of either main national party. But a BJP victory may see a market rally given its record on economic reforms such as privatisation. Reform stagnated under the Congress-led government. Indeed, Indian shares rose 2.7 percent on Tuesday afternoon on speculation the NDA would form the next government, traders said.
GOOD NEWS FOR BJP
The BJP rose to prominence in the early 1990s on the back of a Hindu revivalist movement and, once in power, it promoted economic reform. But it suffered a shock election defeat in 2004 after its "India shining" slogan failed to resonate with voters.
Now it is Congress that appears to be vacillating and may have suffered from over-confidence early in the campaign when polls showed it in the lead.
Playing hardball over seat-sharing, it lost allies in Uttar Pradesh and Bihar, states which together count for 120 out of parliament's 543 seats.
"In a general election where every seat and vote matters, the party has managed to alienate and break with allies in most major states," wrote political analyst Mahesh Rangarajan in the Mail Today.
Some analysts say the only chance Congress now has to form a government would be to ally with the left, which gave its coalition a majority in the last parliament until the communists quit in 2008 in protest over a nuclear deal with Washington.
Perhaps scenting victory, the BJP may have been sending a subtle message to India's president, Pratibha Patil, at Sunday's well-publicised rally
After the election Patil will have to choose between inviting the biggest party and the biggest alliance to form a government. While most pollsters say Congress should gain more seats, the BJP-led alliance may be bigger than the unstable Congress coalition.
That would present a constitutional quandary for Patil. Both choices have historical precedents in India.
"The BJP is really trying to put moral pressure on Patil to show that they are the single largest alliance," said Yashwant Deshmukh, head of the C-voter pollsters.
(Additional reporting by Pratish Narayanan in Mumbai)
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