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India: Is Reform in Danger?

India's ruling Bharatiya Janata Party (BJP) was routed in four state elections in February, leaving the party in control of three Indian states, vs. 14 for the opposition Congress Party. Even so, most analysts believe Prime Minister Atal Bihari Vajpayee will hold on to power until the next general election in 2004. Congress leader Sonia Gandhi is seen as too weak to challenge the BJP on a national level.

Investors fear the party's electoral upset may slow the recently regalvanized reform process if Vajpayee comes under pressure from the BJP's 26 coalition partners. But some analysts think Vajpayee will use his last two years to push through crucial restructuring--and establish a legacy. EDITED BY Edited by Rose Brady

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