You could be forgiven for thinking that the civilian nuclear deal with the United States is all about whether India holds early elections or not.

Every newspaper is speculating if Prime Minister Manmohan Singh, who has staked his personal reputation on the deal, will resign to disassociate himself from an administration that failed to save a pact keenly watched by the world.

But are these the arguments India should be debating in the short-term or should we be discussing the real benefits and drawbacks of the deal?

The communists oppose the deal, in large part because they see it as a front for Washington’s strategic bulwark against a rising China and increasingly unstable Pakistan.

Besides, they say there are many holes in the deal that Washington will use to manipulate India’s foreign and strategic programmes, and that nuclear energy is not a solution to the shortage of electricity in the country or rising oil prices.

Why? Because nuclear energy can not meet India’s huge oil consumption in the transport sector, is expensive to produce and will expose India to manipulations by a small international cartel of uranium suppliers.

But most Indians feel, if straw polls by newspaper and television channels are to be believed the nuclear deal is good for India: The agreement is meant to provide India with the means to produce clean energy — a key constraint to economic growth. And the rise in crude prices underlines need for diversified sources of energy (even if nuclear will take ages to fill the gap).

Internationally, the accord represents a long overdue acceptance of India as a responsible nuclear power.

From the pro-deal camp here are a few points to ponder:

* Even if relations sour with the United States, India can turn to France, Russia, Australia or other uranium producers for supplies, courtesy the waiver from the Nuclear Suppliers Group which is independent of the deal with Washington?

* Why should India not use the deal to get a waiver from NSG and the opportunity to clear its name as a nuclear pariah state?

If the deal falls through, it is unlikely Washington — or any other nuclear nation — will broach the idea of selling nuclear fuel to India anytime soon.

But will that outcome make India more dependent on outside sources for energy, and weaken its own economic prospects against the growing clout of China?

This is the kind of debate that India would benefit from. Focusing on elections may only reap short term political benefits.

Is the sun setting on the Congress-led UPA government? India’s opposition Bharatiya Janata Party (BJP) is certainly riding high after victory in the southern state of Karnataka at the weekend , giving it a first chance to run a government in the south.And it’s the latest in a long losing streak for Congress in state elections. The question is whether the ruling party can turn things around.

The economy certainly isn’t helping. Rising inflation seems to have already wiped out whatever electoral benefits the farmers’ debt waiver might have brought. A slowdown in growth, already apparent in industrial production statistics, won’t help either.

So the first problem for the government is to bring down inflation in time for next year’s national polls.

For now, Prime Minister Manmohan Singh is sounding optimistic, and a favourable monsoon would certainly help. But there is little relief on the horizon from global oil prices, and the government may soon have to bite the bullet and raise domestic fuel prices again.

Reining in inflation will be tough, but not impossible over the next year.

On the political front, all the momentum is with the BJP.

At times, Congress looks disorganised and rudderless. In several elections, Congress seems to have paid the price of failing to nominate a candidate for the chief minister’s job, and relying too much on the pull of the Gandhi family.

At the very top, many analysts are asking if the prime minister has provided the kind of strong leadership his country needs.

But a week is famously a long time in politics, let alone a year. State election defeats don’t bring down governments. It is how the parties react to these mid-term verdicts that can make a real difference.

And it is here that Congress has its chance. The BJP-ruled states of Madhya Pradesh, Rajasthan and Chhattisgarh go to the polls this year, and if voters turf out the incumbents in all three, the BJP could indeed lose some of its shine.

Let’s not forget that only a year ago the BJP was beset by infighting and divided over what its electoral USP was — development or Hindutva. The ageing L.K. Advani does not always strike the right chord with voters across the country, and it is far from clear Gujarat Chief Minister Narendra Modi will emerge as a politician who can garner national support.

I have yet to see a national opinion poll which predicts a clear win for the BJP and its allies. The UPA is losing ground, but the BJP still has a lot of work to do to regain the top spot.

The issue of redressing the imbalance of Hinduism's ancient caste system by creating job and college entry quotas for lower caste and other disadvantaged groups in India seems to be gaining headway in an election year. Now it may be the turn for private industry.

Parties across India's political spectrum appear to be seeing caste-based reservations, as the quotas are known, as potential vote winners. It is a sign again that caste consciousness will become ever more important in what in theory is a secular Indian state.

Now multinationals enjoying the fruits of an Indian economic boom may find they are not immune. Much to the horror of many industrialists worried about their international competitiveness.

India's Supreme Court has already this year upheld a government policy to reserve about half of all state college seats for students from lower castes, in what some call the world's biggest affirmative action scheme.

Then, the Indian Express quoted on TuesdayHindu nationalist Bharatiya Janata Party general secretary Gopinath Munde as demanding quotas for lower castes in private companies. His comments were not endorsed officially, but the caste issue was out of the bag for a party that could well win the next general election. The Hindu nationalists' election strategists must realise they could win millions of votes with such policies before a general election due by early 2009.

Turn a few pages of the Indian Expressand there is a full-page advert for Uttar Pradesh Chief Minister Mayawati, known as the "Queen of the Untouchables" and the potential "king maker" in the next general elections. Celebrating her first year in power, she proudly espouses her move to introduce quotas to private companies participating in state partnerships in her state, India's most populous. It was the first prominent policy in India to include private business into the quota system.

I recently returned from Bangalore covering the Karnataka state election in southern India where the Janata Dal (S), the main regional party, made headlines by proposing to reserve about a third of seats in IT companies in Bangalore for local Karnataka residents.

IT multinationals are currently free to hire from anywhere in India -- a policy that has increasingly annoyed many local Karnataka residents. Karnataka has its own language and many feel they are discriminated against as highly-educated Indians move to their state to work .

Most leading businesses have shunned the idea of quotas, worried it will worsen their competiveness in a global market, especially in the fast moving world of IT.

For those that think that all this talk of caste quotes in private industry is just small parties playing politics, remember it was Prime Minister Manmohan Singh, in a 2006 speech, who first raised the spectre of quotas in private industry.

He then called on companies to take voluntary action to help lower castes get jobs, a statement at the time widely seen as a warning to India's booming business sector to act or face possible legislation.

India's economy may be booming, but this debate highlights how these religious and social issues of inclusiveness could dictate the election campaign. And then companies may find they are not immune to the issues of caste and Hinduism, no matter how proud they are of their global branding.