ANALYSIS-The rise of Narendra Modi, a double-edged sword for India's BJP
NEW DELHI, Dec 10 (Reuters) - As the prosperous, coastal Indian state of Gujarat goes to the polls this week, few doubt Narendra Modi will win a fourth successive term as its chief minister.
What is not clear is whether the popular, but divisive 62-year-old will win a big enough mandate to secure the backing of his party to lead the charge against Prime Minister Manmohan Singh's coalition in a general election due by 2014.
Many believe that only Modi can reinvigorate the Hindu nationalist Bharatiya Janata Party (BJP), which has failed to capitalise on the troubles of a government hit by a sharp economic downturn to a string of corruption scandals.
Surely, they argue, voters across the country will elect a leader who has ably brought Gujarat its uninterrupted power supplies, smooth roads and flood of investment.
Ironically, however, if Modi is catapulted by this week's state election into poll position as the BJP's leader for 2014, it could ultimately scupper his party's chances of winning back power for the first time since 2004.
Critics speak of him as an authoritarian and vindictive leader. Worse, the toxic memory of religious riots that tore through his state a decade ago leaves suspicions that Modi remains a Hindu hardliner who will alienate more voters than his leadership and oratory skills could hope to gain.
"He's capable of wrecking the BJP's hopes at the national level," said James Manor, professor of Commonwealth Studies at the University of London. "He doesn't excite large numbers of voters outside Gujarat. He frightens many more than he excites."
Such an outcome may create more political risk in a country that has fallen out of favour with investors over the past two years thanks to policy drift and incompetence in New Delhi.
A weakened BJP incapable of taking on Singh's Congress party will probably lead to a highly fractured vote in the 2014 general election. That, in turn, will yield a coalition government packed with powerful regional parties that could thwart the reforms that businesses are clamouring for to revive economic growth, on track for its worst year in a decade.
Gujarat will vote in a staggered election on Dec. 13 and Dec. 17. A narrow victory for Modi, or a shock defeat, would probably scupper his chances of leading the BJP into 2014. But he is unlikely to lose.
A poll published by India Today magazine in November showed the BJP was set to increase its share of the state legislature's 182 seats to 128 from the 117 it won five years ago.
The poll also ranked Modi as a more popular leader than Rahul Gandhi, scion of the Nehru-Gandhi dynasty that has ruled India for most of its post-independence era and the Congress party's presumed candidate to succeed Manmohan Singh.
Modi's rise could also revive the BJP. The party is adrift, its leadership plagued by internal squabbles and its Hindu-revivalist ideology lacking the appeal it had in the 1990s.
Modi's record in Gujarat - strong governance, job creation and promises of more affordable housing and healthcare - strike a chord with middle-class voters who form the BJP's traditional support base.
"I think he's a great asset," said Swapan Dasgupta, a political analyst with links to the BJP. "The projection of him will energise the BJP to a very, very large extent."
Dasgupta said other party leaders' wariness of Modi would wither away if he won convincingly in Gujarat, and he would likely emerge as the "de facto leader" of the BJP for 2014.
Still, Modi's ascent could prove a double-edged sword for the BJP. Many Indians have not forgiven Modi for the violence that killed between 1,000-2,000 people, mainly Muslims, in 2002.
Critics accuse him of not doing enough to stem the riots, or even of quietly encouraging them - allegations he has strenuously denied and which have never been proved in inquiries - and he is still viewed with suspicion outside India.
Britain renewed diplomatic ties with Modi in October but other nations, including the United States, have still not. Washington denied him a travel visa in 2005 for religious intolerance. In November, a group of U.S. lawmakers urged Secretary of State Hillary Clinton to continue this policy, citing the possibility of Modi running for higher office.
Since the riots, Modi has benefited from an image makeover, toning down his speeches and holding fasts to promote religious harmony. He has more than a million Twitter followers, has held a web cam chat with voters and regularly hosts Bollywood stars.
It may not be enough.
Critics say that it is the same Modi underneath, too mistrusted to muster the nationwide support that the BJP's last prime minister, Atal Bihari Vajpayee, was able to command.
"The 2002 massacre will haunt him for as long as he lives," said political analyst Paranjoy Guha Thakurta.
Still vilified by many non-Hindus, having Modi as its prime ministerial candidate could throttle the BJP's efforts to recapture lost ground in northern states such as Uttar Pradesh and Bihar, which have substantial Muslim populations.
Worse, the BJP could lose key allies it needs to form a national government. Nitish Kumar, the powerful leader of Bihar, would probably shun a BJP-led coalition with Modi at the helm.
The most likely outcome for the 2014 election would be a three-way split between Congress, the BJP, and regional parties, according to Anjalika Bardalai, an analyst at the Eurasia Group.
"In such a scenario, the BJP's ability to form alliances with other parties would be a crucial determinant of its ability to govern," said Bardalai.
"And this is an important area where Modi might well end up being a liability for the party, because his divisiveness might rule out or - at the very least - compromise the possibility of alliances with some of the major regional parties whose support the BJP would seek."
The Congress party, which now runs a minority government, relies on such regional parties to push policies in the teeth of fierce opposition, as it did last week when seeking parliament's approval for controversial retail sector reform.
With the BJP in a "horrendous mess" and Congress also likely to lose seats, the 2014 elections could see the rise of a "third force clinging on to power tenuously", according to James Manor of the University of London.
"That government will probably not last more than a couple of years and then we'll have another parliamentary election."
(Additional reporting by Annie Banerji; Editing by John Chalmers and Neil Fullick)