April 28 (Bloomberg) -- Akshay Das has spent his last two summers turning village tracks into roads in Choksiborambati, just east of the Indian city of Kolkata, under a government plan that has provided jobs to 41 million rural households.

“The program has been a boon for us,” said the 40-year- old rice farmer. “Earlier, summer was a time of no work on farms, causing a lot of financial stress.”

Prime Minister Manmohan Singh’s focus on rural areas, home to three-fifths of India’s 714 million voters, may keep him in power in parliamentary elections that began April 16. His jobs program and a waiver of 717 billion rupees ($14.3 billion) in rural loans, along with record agricultural growth since he took office in 2004, have helped Indian farmers prosper even as the global economy sinks into recession.

“India’s rural economy is buoyant,” said Prem Shankar Jha, a political commentator and former aide to Prime Minister Vishwanath Pratap Singh, who governed the nation from December 1989 to November 1990. “It could help the government fight anti-incumbency.”

India, the world’s largest democracy, is holding national elections that end May 13, with results due May 16. According to opinion polls, neither Singh’s Congress Party-led coalition, the United Progressive Alliance, nor the main opposition -- the Hindu-nationalist Bharatiya Janata Party -- has a clear majority.

One survey of 50,400 people across India conducted by Star News-Nielsen between March 26 and April 3 indicated Singh’s coalition may win 203 seats in the 543-seat lower house, compared with 191 for the BJP.

Hardest Hit

In an April 15 speech, BJP president Rajnath Singh, 57, said the mood in the country is for change because the “common man has been hit the hardest” by the prime minister’s economic policies. “Although the government is taking pride in bringing the inflation rate close to zero, it’s hiding the fact that prices of essential commodities are still elevated,” he said.

While the benchmark wholesale price index is at 0.26 percent, a gauge of consumer prices paid by farm workers is running at 10.8 percent.

The United Progressive Alliance swept to power five years ago after the BJP-led opposition National Democratic Alliance faced a backlash from rural voters who felt sidelined amid India’s economic growth.

After the victory, Manmohan Singh, 76, promised to help the disadvantaged. In 2006, his government implemented the National Rural Employment Guarantee Act to provide 100 days of work to 30 million families in 200 of the nation’s poorest districts.

Building Roads

Last year, he extended the plan to all 596 districts in the country. So far, the government has spent 466 billion rupees on 5 million projects that include building roads and restoring ponds.

“It is the one growth driver that is holding up the economy in the current environment,” said Rohini Malkani, a Mumbai-based economist at Citigroup Inc.

India’s $1.2 trillion economy may grow 4 percent in 2009, the fastest pace after China among the world’s major nations, according to the World Bank, after estimated expansion of 5.5% in 2008. The growth comes as the global economy may contract 1.7 percent this year, the bank said.

More than 40 million of India’s poor farmers, the majority of whom hold less than two hectares of land, have benefited from the government’s waiver of unpaid loans on fertilizer, houses and other expenses. Singh has also raised the minimum prices paid to farmers since he took office by 64 percent for so-called common-grade rice and by 71.4 percent for wheat.

Record Output

This has led to an increase in production: Output of rice, wheat and other food grains reached a record 230.78 million tons last year, a jump of close to 20 percent since 2004.

Rising rural incomes and “healthy” agricultural growth “are contributing to growing demand” in the countryside, said Sajjan Jindal, managing director of JSW Steel Ltd., India’s third-biggest steelmaker.

Companies such as ITC Ltd., India’s biggest cigarette maker, and textile company DCM Ltd. are reporting higher sales in rural areas compared with urban markets, according to the Associated Chambers of Commerce and Industry. The group estimates India’s rural retail market is worth $112 billion, or 40 percent of the country’s total retail sales.

Still, prosperity in the countryside won’t necessarily tip the election in favor of the Congress party, said Rajeev Malik, a regional economist at Macquarie Group Ltd. in Singapore.

Losing Ground

The 124-year-old party, which has led India for almost five of the six decades since independence, has lost ground in the past 20 years to the BJP and regional opponents such as the Bahujan Samaj Party whose ideologies are based on religion and caste.

The Congress hasn’t ruled India’s most-populous and predominantly rural state of Uttar Pradesh since 1989; it has virtually no presence there and in the adjoining states of Bihar and Jharkhand, which send about a quarter of the legislators to parliament.

One test of Singh’s appeal will be in the state of West Bengal, ruled by communist parties since 1977 when the Congress lost power. Das, the farmer from Choksiborambati, said people in his hamlet may vote for the Trinamool Congress Party, the local Congress ally.

“The jobs program has helped us to stay within our village and not have to go to the city to find work,” he said. “The government has, to quite an extent, kept its promise to help.”

To contact the reporter on this story: Cherian Thomas in New Delhi at Cthomas1@bloomberg.net

Last Updated: April 27, 2009 15:30 EDT