NEW DELHI (Reuters) - Swami Ramdev, India's most famous yoga guru, began a mass fast to the death on Saturday to demand reforms including the death penalty for corrupt officials in an anti-graft campaign that has undermined an embattled and scandal-tainted Prime Minister Manmohan Singh.
The saffron-robed and bearded guru, who rose from an illiterate family to host a television show with 30 million viewers and owns a "peace" island in Scotland, sat with tens of thousands of followers in a tent the size of four football pitches in the heart of the capital.
Tapping into spiralling voter anger at corruption as Asia's third largest economy booms, the guru has called on the government to pursue billions of dollars in illegal funds abroad and the withdrawal of high denomination bank notes.
One newspaper called it "Yogitation", others called it a publicity stunt.
"We are not deviating ... Our issues are black money, corruption," Ramdev told a thunderous crowd as he started his hunger strike in a tent where hundreds of ceiling fans whirred in the summer heat. "And we have to stay firm."
"Nothing is impossible, everything is possible and we are not going to be defeated."
His campaign is the latest embarrassment for a Congress party-led coalition hit by graft scandals including allegations of kickbacks at the Commonwealth Games and a telecoms scam that may have cost the government up to $39 billion in revenues.
Graft has long been a part of daily life from getting an electricity connection to signing business deals, but the latest scandals - that have seen a minister jailed and business billionaires questioned - are unprecedented.
Such is Ramdev's popularity in the electorally important states of north India that four government ministers, including Finance Minister Pranab Mukherjee, met him at the airport in Delhi after he descended from his private plane to persuade him to stop. Negotiations have so far not made a breakthrough.
Telecoms Minister Kapil Sibal told a news conference the government had agreed to 90 percent of his demands and that the yoga guru would end his fast.
Ramdev appeared defiant late on Saturday, calling on his supporters to continue fasting and dared anyone to arrest him.
Investors worry the latest troubles will again force the government to pay less attention to reform bills, such as making it easier for industry to acquire land, postponed due to opposition protests over graft causing parliamentary deadlock.
Thousands of Indians also fasted in the multi-coloured tent while the guru's followers as far away as Orissa and the IT city of Bangalore also began hunger strikes.
While many followers are poor, others in the tent were well dressed professionals, mingling with foreign tourists and villagers who had travelled hundreds of miles to see him.
Mayuri, 32, came with her husband from Rajasthan to be part of the protest, and had to sell her husband's bicycle to pay for the trip .
"We believe this is an investment," she said, adding she hoped illegal funds stashed abroad could be used for welfare measures.
Ramdev's fast comes after a similar one by social activist Anna Hazare, whose April campaign rang a chord with millions of Indians and forced the government to make legislative concessions on an anti-corruption bill that effectively gives India an independent ombudsman to battle graft.
Both campaigns have underscored how India's traditional national parties are struggling to deal with the growing anger at middle class Indians increasingly fed up with graft, leaving a political vacuum that figures like Ramdev can fill.
India ranked 78th on Transparency International's latest corruption index, a worse ranking than China.
Ramdev's yoga demonstrations, filled with crowd-pleasing stunts such as headstands or making his belly dance inside his ribcage, are often punctuated by rambling lectures on corruption, black money or the government's failure to tackle Maoist rebels.
But few expect Ramdev will die for his cause.
Like Hazare, most commentators expect some deal will be forged that will give the yoga guru enough for him to claim moral victory and possibly help the launch of his political party for 2014 national elections.
Critics say he is also linked to a radical Hindu nationalist group.
His outspoken positions on homosexuality, which he says is a curable mental illness, and sex education to prevent HIV and AIDS, which he says should be withdrawn from schools and replaced by yoga, have also been criticised.
The campaign looked well planned with giant television screens broadcasting Ramdev's meditation sessions and speech. There was abundant water laid on in the harsh summer heat.
Paying for it is no problem. His global business has a turnover of $40 million a year.
Politicians fear that the outrage over corruption scandals, made all the harder to stomach by rising food and fuel prices, may turn into a popular movement against the establishment.
India, a country of 1.2 billion people, has largely remained unaffected by the violent protests that have rocked emerging economies in the Middle East and North Africa, fuelled in part by high prices and corruption.
But one government ally, the DMK party of Tamil Nadu, was thrown out of power in a state election because of links with the telecoms scandal.
The protest has also divided the ruling Congress party, with some officials angry that the prime minister sent ministers to meet Ramdev, seemingly playing in to the guru's hands.
Others have pointed to the irony of a hunger strike in a country where more than 40 percent of children under five are malnourished. Some have questioned Ramdev's luxurious lifestyle.
"The Baba travels in a private jet, stays in a five-star luxury hotel, and has the money for such arrangements before going on a fast. This is surely a five-star satyagraha (protest)," Congress leader Digvijay Singh said.
(Added reporting by Devidutta Tripathy and Annie Banerji; Writing by Alistair Scrutton; Editing by Robert Birsel)
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