International News

By Satarupa Bhattacharjya and Ross Colvin

NEW DELHI (Reuters) - India's Congress party is debating holding a general election in November, six months ahead of schedule, senior party leaders said, reflecting an internal discussion over whether to pull the plug on the shaky ruling coalition or have it serve a full term.

Officially, the Congress party says the government - which has been battered by a series of corruption scandals and now governs as a minority after two allies withdrew from the ruling coalition - will limp on until elections are due in May 2014.

But there is no consensus in the upper echelons of Congress on when to call elections, according to interviews with more than a dozen party leaders. There is a split between those who say the sluggish economy needs more time to recover and those who worry that waiting until 2014 could be a tactical mistake.

If the Congress party gets the timing wrong, it could cost it a third straight term in power and put a question mark over the future of India's recently launched economic reform drive.

"The government has a commitment to the people," said one senior Congress party official when asked why the coalition should continue if it was struggling to pass legislation. "A lame duck is fine if it can paddle through water."

Other party leaders say things may get worse by next year and Congress should capitalize on a win in local elections in the southern state of Karnataka earlier this month that has brought much-needed cheer to its cadres.

Elections by year-end would also be welcomed by investors hoping a more stable government will lessen political risk. "Right now there is far too much uncertainty. Many businesses do not want to commit," said economist Rajeev Malik of CLSA Singapore.

Early elections could be forced on the party if a fickle ally, the Samajwadi Party, suddenly withdraws support or if the minority government loses a confidence vote in parliament.

The latter is seen as a possible but unlikely scenario because the leadership of the main opposition Bharatiya Janata Party (BJP) is consumed by infighting and needs time before it can face a fresh election. It could abstain in any confidence vote, allowing the Congress coalition to stay in power.

SONIA GANDHI TO DECIDE

Speculation about the timing of an election has intensified after signs that there may already be preparations afoot.

The government this week launched an advertising blitz, placing front-page advertisements in national newspapers that lauded its achievements over the past nine years. The timing and size of the "India Story" campaign, which also includes television and Internet promotions, is unusual if elections really are a year away, said veteran Indian election watchers.

"Many of the cadres and some from the second-level leadership (regional party leaders) want early elections," said a party general secretary, who is close to Congress party president Sonia Gandhi.

The final decision on the election date will rest with Gandhi, Congress party officials said.

An election is unlikely to be called until after the month-long monsoon session of parliament, which will probably start in the last week of July, they said. The Congress party will make one final effort to pass its populist food security bill, which aims to give cheap food to nearly 70 percent of the population.

It was to pass the bill at a session which ended early on May 8, but the plan was derailed by a furor over two ministers embroiled in corruption scandals who were forced to resign.

Another key factor in the Congress's decision-making is the outcome of four state elections due at the end of this year. The party, which has ruled for most of India's 65 years of independence from Britain, is not expected to do well in the states of Chhattisgarh, Rajasthan, Delhi and Madhya Pradesh.

"Congress is not in a very good position in those states. If we hold Lok Sabha (parliamentary) elections after losing some assembly elections our morale may be low. In my view, November-December Lok Sabha elections would be good for the party," said a member of the party's election strategy committee.

MAJOR LOGISTICAL EXERCISE

India's former chief election commissioner, S.Y. Qurashi, told Reuters it would make sense for the government to hold the general election at the same time as the state polls to avoid duplication of effort.

Indian elections are a massive logistical exercise. Nearly 780 million people are registered to vote in the poll, which will be staggered over five weeks. The election commission generally needs between three to six months to prepare.

The optimal time to hold elections would be either in October-November or February-March because monsoon rains will lash India between June and September, and winter snows will blanket much of mountainous northern India in the months of December and January.

It gets hotter later in the year, but the last two elections were held in April-May, in 2004 and 2009.

Congress leaders who want the government to stay on until 2014 say that holding the elections on schedule will allow time for the further easing of inflation, which has been a major concern for voters. Headline inflation fell to an annual 4.89 percent in April, its lowest level in three years.

But there is a big spoiler who could upset the Congress party's best-laid plans - Mulayam Singh Yadav, leader of the Samajwadi Party, who helps keep the government in power by providing crucial voting support in parliament.

Yadav, whose party rules in the state of Uttar Pradesh, could withdraw support and force early elections if he calculates that waiting too long could cost him votes, said Yashwant Deshmukh, chief editor of the CVoter polling agency.

At the Congress party's run-down national headquarters in New Delhi, some party workers think that, like their office, the party is in urgent need of some renovation.

"The worker on the ground is demoralized with the government," lamented one party worker, who said early elections would give Congress a fresh mandate and make it less reliant on other parties to govern.

(Additional reporting by Nigam Prusty in New Delhi, Sharat Pradhan in Lucknow and Neha Dasgupta in Mumbai, Editing by Raju Gopalakrishnan)