* Major Congress ally briefly threatens to quit coalition
* Protests, marches, blockades planned for Thursday
* To show support, BJP chief minister plans to walk to work
By Satarupa Bhattacharjya and Annie Banerji
NEW DELHI, May 30 (Reuters) - Indian opposition parties planned a national strike on Thursday in protest against the steepest petrol price rise in the country's history, seeking to exploit popular anger with Prime Minister Manmohan Singh's embattled coalition government.
Protests, marches and road blocks were planned across the country. The strike could reduce public transport and hit government offices, colleges, firms and industrial plants, but because it is not centrally organised its impact will differ from state to state.
"It will be a total shutdown across the country. It will be the biggest democratic protest the country has seen in a long time," said Prakash Javdekar, a leader of the main opposition Bharatiya Janata Party (BJP), which won nearly 19 percent of the vote in the 2009 election.
Strike calls in India have had mixed results in the past, and it was not clear how many people would respond on the day. A strong turnout could indicate popular dissatisfaction with Singh's two-term, Congress Party-led government.
The day of action - or "bandh" - called by the BJP and smaller left-wing parties is not a threat to the survival of Singh's government, but it does underscore the difficulty he faces trying to implement unpopular economic reforms.
The backlash over the petrol price increase has already unnerved the government, prompting it to drop any immediate plans to raise the price of heavily subsidised diesel and kerosene, a move investors have been pushing for to narrow the budget deficit.
The coalition, weakened by a string of corruption scandals and infighting that has stymied reforms, faces mounting criticism over its management of the economy.
Investors and economists cheered its decision last week to allow state-controlled oil companies to increase petrol prices for the first time in six months, enabling them to recover some of the losses they had racked up due to higher oil prices and a plunging rupee.
But the roughly 11 percent increase sparked public protests and some of the Congress party's coalition partners have tried to distance themselves from the decision.
Congress's second-biggest ally in parliament, the Dravida Munnetra Kazhagam (DMK) party, briefly threatened to quit the government on Wednesday if the increase was not trimmed, showing why decision-making is so hard in New Delhi.
The government and the state oil companies have already opened the way to a partial rollback of the petrol price increase of 6.28 rupees per litre, excluding taxes.
The head of the Indian Oil Company, R.S. Butola, strongly hinted last week that the increase might be trimmed on June 1, when state oil companies will review their charges based on international oil prices and the exchange rate
The BJP controls seven of India's 28 states, including the industrial hub of Gujarat and Karnataka, which is home to Bangalore, India's "Silicon Valley".
A spokeswoman for computer-chip maker Intel Corp, which has about 3,200 employees in India, most of them in Bangalore, said the company had asked staff to work from home.
Google Inc. and Infosys, which also have a large presence in Bangalore, said it would be "business as usual" for them.
In Mumbai, India's financial capital, the ruling Shiv Sena party, a BJP ally, said residents "should not venture out of their houses" on Thursday. But banks said they anticipated no disruption as buses and trains were expected to run normally.
In the BJP-ruled state of Himachal Pradesh, the chief minister said he would show his support for the protest by walking to work on Thursday rather than taking his official car.
New Delhi-based political analyst Amulya Ganguli said the political impact of Thursday's strike would be muted.
"For people in India it will be a holiday. So they will take advantage of the call for a bandh to stay away from work," he predicted.
Asim Das, a 50-year-old electrician who travels to Kolkata, the capital of West Bengal, by suburban train every day, said he had been shocked by the price rise but would not join the strike.
"I cannot afford to miss a day's earnings because of a strike which serves only the politicians," he said.