Should the violence continue, many Indians expect the government to fall, with fresh national elections to be held within six months, nearly two years ahead of schedule. "This has set India back a long, long way," says Kanti Bajpai, professor of international relations at New Delhi's Jawaharlal Nehru University.
The crisis in India, with its proximity to Afghanistan and Pakistan, has broad implications for the West. Since the September 11 attacks, India has claimed to be the stable, pro-Western democracy in the region. And it has long prided itself on its economic progress, something archrival Pakistan hasn't been able to achieve. Riots and election upheavals in India make the region even more unstable, a grave concern given that both India and Pakistan are nuclear powers and already have troops massed along their disputed border in Kashmir.
HIGH-TECH SETBACK? Moreover, the BJP's strident anti-Mulsim rhetoric and bloody massacres of Muslims in Gujarat will surely dilute India's claims of being the victim of Pakistani and Islamic militancy in the northern Himalayan region of Kashmir.
India's political chaos could deal the nation's vaunted high-tech miracle a setback, too. While the BJP has been preoccupied with the troubles, India's annual economic growth rate has fallen from 5.5% to just 4%, half the government's goal. Its budget deficit is soaring, and ever-changing government policies and regulation make investors wary.
Stock markets are gloomy, and foreign investment seems likely to stay mired at $2.3 billion annually, a tiny sum for an economy the size of India's. And some analysts estimate that unemployment could be as high as 25%. "If people had jobs, they would be less inclined to riot," says Ashis Nandy, director of New Delhi's Center for the Study of Developing Societies.
NORTH VS. SOUTH. Economic concerns contributed to the drubbing the BJP received in state elections in February and municipal elections in New Delhi in late March. The BJP now rules just 3 of India's 28 states, while the opposition Congress Party romped home with 14 states. Growth in south India, home of most of the nation's tech industries, is twice that of the north, and the trouble in the north has once again rekindled murmurs that India's more prosperous southern states, will try to secede.
So far, Prime Minister Atal Bihari Vajpayee has managed to hold his government and party together. But it will be a fragile peace. The BJP has roots as a Hindu nationalist party, but it has secular political parties as coalition allies. However, the party came to power riding a religious agenda, and now, three years into its regime, its religious cadres are demanding payment for their support.
Many of those perceive Vajpayee to be an impediment to their goals, but his moderate position keeps the 26-member ruling coalition together. "We supported the ruling coalition with a specific agenda -- secularity was one of them," says Chandrashekhar Reddy, a member of parliament with the southern Telegu Desam Party. "We expect them to stick to it."
At best, political gridlock seems likely. With the BJP controlling the national government and the rival Congress Party in power in the states, the Congress Party could block all legislation, good or bad, and hasten the BJP's fall. By Manjeet Kripilani in Bombay