(Reuters) – Narendra Modi looked set to win a fourth successive term as the chief minister of India’s Gujarat state on Thursday, a victory that could launch the prime ministerial ambitions of one of the country’s most popular but controversial leaders.
Modi’s Hindu nationalist Bharatiya Janata Party (BJP) was leading in 118 out of 182 seats, against 58 seats for the Congress party, which heads India’s national government, according to the Election Commission website at 0759 GMT.
The final result is likely to have repercussions far beyond the borders of the prosperous western state of 60 million people.
The BJP won 117 seats in 2007 and analysts say Modi needs a convincing victory to present himself as the party’s presumptive candidate for prime minister in national elections due by 2014.
A big win for Modi could fire up the ailing main opposition BJP, giving it a leader who inspires euphoric support for the high growth, uninterrupted power supply and safe streets he is credited with providing in Gujarat.
But the 62-year-old Modi, portrayed by his critics as a closet Hindu zealot, could prove too divisive a figure to become a nationally acceptable leader who would also need to win over enough allies to form a coalition government.
That could play into the hands of the Congress party as it prepares to launch Rahul Gandhi, heir to India’s most powerful political dynasty, as the man to take over the reins from Prime Minister Manmohan Singh.
“Markets will now ponder upon whether the PM candidate from the BJP will be Narendra Modi, and whether we are looking at a showdown between Narendra Modi versus Rahul Gandhi in 2014,” said Deven Choksey, managing director of K R Choksey Securities.
To his detractors, Modi’s reign is overshadowed by Hindu-Muslim riots that tore through his state 10 years ago, killing 1,000-2,000 people. Critics accuse him of not having done enough to stop the violence, or even quietly encouraging it, allegations he has strenuously denied and have never been proven.
But that has not stopped him winning successive elections, touting his credentials as an effective economic manager in contrast to the policy drift in New Delhi that has helped drag India’s economic growth to its worst pace in a decade.
Celebrations were already in full swing as Modi’s victory looked increasingly certain on Thursday. He first came to power in 2001 when the BJP already governed Gujarat. He subsequently won elections in 2002 and again in 2007.
Local television channels showed party workers distributing sweets among throngs of Modi supporters, who were seen dancing to the beat of drums, bursting firecrackers and holding posters that read “CM (chief minister) 2012 – Narendra Modi – PM 2014”.
Modi has always publicly played down a possible bid to become prime minister, saying Gujarat was his priority.
His supporters’ enthusiasm is shared by Indian and foreign business leaders who extol Gujarat’s ability to cut through red tape and find cheap land to set up factories, drawing investment from firms including Ford Motor Co and Tata Motors.
The question will now turn to whether Modi will secure the backing of the BJP, which has been plagued by internal squabbling and has lacked a leader to galvanize the party’s Hindu, middle class “vote bank”.
“Modi means development,” said Shrikant Sharma, the BJP’s national media secretary. “A lot of Indians expect him to be made the prime ministerial candidate, but that’s a call the party will take.”
Critics, even within his own party, see Modi as arrogant and divisive. He is also likely to struggle to revive the BJP’s fortunes in northern states with large Muslim populations, and could also struggle to win regional allies – who rely on religious minorities – to form a national coalition.
That could help the Congress party, which has seen its popularity slide due to voter anger over slowing growth, high inflation and a string of corruption scandals.
Congress played down the scale of Modi’s likely victory on Thursday, pointing to the fact that the incumbent was not likely to push far past the number of seats he won five years ago.
Finance Minister P. Chidambaram told reporters Congress had been able to “contain” Modi.
“There is time to think of 2014. But those in the BJP who were beginning to think about 2014, I think, will rein in their imagination,” he said.
A silver lining for Congress was that it looked set to take back the mountainous state of Himachal Pradesh from the BJP, in the second of two state elections being counted on Thursday.
The party might even be tempted to call an early election next year if the BJP looks weak enough, but analysts said this was unlikely.
“They still have to prepare themselves in other parts of India, which they haven’t done yet,” Badri Narayan, professor of politics at G.B. Pant Social Institute in Allahabad.
“They need the next one year to boost their policies and pass reforms. It’ll take time.”
(Additional reporting by Annie Banerji, Satarupa Bhattacharjya, Arup Roychoudhury in NEW DELHI; Abhishek Vishnoi, Swati Bhat and Manoj Dharra in MUMBAI; editing by Ross Colvin and Raju Gopalakrishnan)
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