Officially, the Congress party says the government – which has been battered by a series of corruption scandals and now governs as a minority after two allies withdrew from the ruling coalition – will limp on until elections are due in May 2014.

But there is no consensus in the upper echelons of Congress on when to call elections, according to interviews with more than a dozen party leaders. There is a split between those who say the sluggish economy needs more time to recover and those who worry that waiting until 2014 could be a tactical mistake.

If the Congress party gets the timing wrong, it could cost it a third straight term in power and put a question mark over the future of India’s recently launched economic reform drive.

“The government has a commitment to the people,” said one senior Congress party official when asked why the coalition should continue if it was struggling to pass legislation. “A lame duck is fine if it can paddle through water.”

Other party leaders say things may get worse by next year and Congress should capitalize on a win in local elections in the southern state of Karnataka earlier this month that has brought much-needed cheer to its cadres.

Elections by year-end would also be welcomed by investors hoping a more stable government will lessen political risk. “Right now there is far too much uncertainty. Many businesses do not want to commit,” said economist Rajeev Malik of CLSA Singapore.

Early elections could be forced on the party if a fickle ally, the Samajwadi Party, suddenly withdraws support or if the minority government loses a confidence vote in parliament.

The latter is seen as a possible but unlikely scenario because the leadership of the main opposition Bharatiya Janata Party (BJP) is consumed by infighting and needs time before it can face a fresh election. It could abstain in any confidence vote, allowing the Congress coalition to stay in power.

SONIA GANDHI TO DECIDE

Speculation about the timing of an election has intensified after signs that there may already be preparations afoot.

The government this week launched an advertising blitz, placing front-page advertisements in national newspapers that lauded its achievements over the past nine years. The timing and size of the “India Story” campaign, which also includes television and Internet promotions, is unusual if elections really are a year away, said veteran Indian election watchers.

“Many of the cadres and some from the second-level leadership (regional party leaders) want early elections,” said a party general secretary, who is close to Congress party president Sonia Gandhi.

The final decision on the election date will rest with Gandhi, Congress party officials said.

An election is unlikely to be called until after the month-long monsoon session of parliament, which will probably start in the last week of July, they said. The Congress party will make one final effort to pass its populist food security bill, which aims to give cheap food to nearly 70 percent of the population.

It was to pass the bill at a session which ended early on May 8, but the plan was derailed by a furor over two ministers embroiled in corruption scandals who were forced to resign.

Another key factor in the Congress’s decision-making is the outcome of four state elections due at the end of this year. The party, which has ruled for most of India’s 65 years of independence from Britain, is not expected to do well in the states of Chhattisgarh, Rajasthan, Delhi and Madhya Pradesh.

“Congress is not in a very good position in those states. If we hold Lok Sabha (parliamentary) elections after losing some assembly elections our morale may be low. In my view, November-December Lok Sabha elections would be good for the party,” said a member of the party’s election strategy committee.

MAJOR LOGISTICAL EXERCISE

India’s former chief election commissioner, S.Y. Qurashi, told Reuters it would make sense for the government to hold the general election at the same time as the state polls to avoid duplication of effort.

Indian elections are a massive logistical exercise. Nearly 780 million people are registered to vote in the poll, which will be staggered over five weeks. The election commission generally needs between three to six months to prepare.

The optimal time to hold elections would be either in October-November or February-March because monsoon rains will lash India between June and September, and winter snows will blanket much of mountainous northern India in the months of December and January.

It gets hotter later in the year, but the last two elections were held in April-May, in 2004 and 2009.

Congress leaders who want the government to stay on until 2014 say that holding the elections on schedule will allow time for the further easing of inflation, which has been a major concern for voters. Headline inflation fell to an annual 4.89 percent in April, its lowest level in three years.

But there is a big spoiler who could upset the Congress party’s best-laid plans – Mulayam Singh Yadav, leader of the Samajwadi Party, who helps keep the government in power by providing crucial voting support in parliament.

Yadav, whose party rules in the state of Uttar Pradesh, could withdraw support and force early elections if he calculates that waiting too long could cost him votes, said Yashwant Deshmukh, chief editor of the CVoter polling agency.

At the Congress party’s run-down national headquarters in New Delhi, some party workers think that, like their office, the party is in urgent need of some renovation.

“The worker on the ground is demoralized with the government,” lamented one party worker, who said early elections would give Congress a fresh mandate and make it less reliant on other parties to govern.

(Additional reporting by Nigam Prusty in New Delhi, Sharat Pradhan in Lucknow and Neha Dasgupta in Mumbai, Editing by Raju Gopalakrishnan)

Officially, the Congress party says the government – which has been battered by a series of corruption scandals and now governs as a minority after two allies withdrew from the ruling coalition – will limp on until elections are due in May 2014.

But there is no consensus in the upper echelons of Congress on when to call elections, according to interviews with more than a dozen party leaders. There is a split between those who say the sluggish economy needs more time to recover and those who worry that waiting until 2014 could be a tactical mistake.

If the Congress party gets the timing wrong, it could cost it a third straight term in power and put a question mark over the future of India’s recently launched economic reform drive.

“The government has a commitment to the people,” said one senior Congress party official when asked why the coalition should continue if it was struggling to pass legislation. “A lame duck is fine if it can paddle through water.”

Other party leaders say things may get worse by next year and Congress should capitalise on a win in local elections in the southern state of Karnataka earlier this month that has brought much-needed cheer to its cadres.

Elections by year-end would also be welcomed by investors hoping a more stable government will lessen political risk. “Right now there is far too much uncertainty. Many businesses do not want to commit,” said economist Rajeev Malik of CLSA Singapore.

Early elections could be forced on the party if fickle ally, the Samajwadi Party, suddenly withdraws support or if the minority government loses a confidence vote in parliament.

The latter is seen as a possible but unlikely scenario because the leadership of the main opposition Bharatiya Janata Party (BJP) is consumed by infighting and needs time before it can face a fresh election. It could abstain in any confidence vote, allowing the Congress coalition to stay in power.

SONIA GANDHI TO DECIDE

Speculation about the timing of an election has intensified after signs that there may already be preparations afoot.

The government this week launched an advertising blitz, placing front-page advertisements in national newspapers that lauded its achievements over the past nine years. The timing and size of the “India Story” campaign, which also includes television and Internet promotions, is unusual if elections really are a year away, said veteran Indian election watchers.

“Many of the cadres and some from the second-level leadership (regional party leaders) want early elections,” said a party general secretary, who is close to Congress party president Sonia Gandhi.

The final decision on the election date will rest with Gandhi, Congress party officials said.

An election is unlikely to be called until after the month-long monsoon session of parliament, which will probably start in the last week of July, they said. The Congress party will make one final effort to pass its populist food security bill, which aims to give cheap food to nearly 70 percent of the population.

It was to pass the bill at a session which ended early on May 8, but the plan was derailed by a furore over two ministers embroiled in corruption scandals who were forced to resign.

Another key factor in the Congress’s decision-making is the outcome of four state elections due at the end of this year. The party, which has ruled for most of India’s 65 years of independence from Britain, is not expected to do well in the states of Chhattisgarh, Rajasthan, Delhi and Madhya Pradesh.

“Congress is not in a very good position in those states. If we hold Lok Sabha (parliamentary) elections after losing some assembly elections our morale may be low. In my view, November-December Lok Sabha elections would be good for the party,” said a member of the party’s election strategy committee.

MAJOR LOGISTICAL EXERCISE

Former chief election commissioner, S.Y. Qurashi, told Reuters it would make sense for the government to hold the general election at the same time as the state polls to avoid duplication of effort.

Indian elections are a massive logistical exercise. Nearly 780 million people are registered to vote in the poll, which will be staggered over five weeks. The election commission generally needs between three to six months to prepare.

The optimal time to hold elections would be either in October-November or February-March because monsoon rains will lash India between June and September, and winter snows will blanket much of mountainous northern India in the months of December and January.

It gets hotter later in the year, but the last two elections were held in April-May, in 2004 and 2009.

Congress leaders who want the government to stay on until 2014 say that holding the elections on schedule will allow time for the further easing of inflation, which has been a major concern for voters. Headline inflation fell to an annual 4.89 percent in April, its lowest level in three years.

But there is a big spoiler who could upset the Congress party’s best-laid plans – Mulayam Singh Yadav, leader of the Samajwadi Party, who helps keep the government in power by providing crucial voting support in parliament.

Yadav, whose party rules in the state of Uttar Pradesh, could withdraw support and force early elections if he calculates that waiting too long could cost him votes, said Yashwant Deshmukh, chief editor of the CVoter polling agency.

At the Congress party’s run-down national headquarters in New Delhi, some party workers think that, like their office, the party is in urgent need of some renovation.

“The worker on the ground is demoralised with the government,” lamented one party worker, who said early elections would give Congress a fresh mandate and make it less reliant on other parties to govern.

(Additional reporting by Nigam Prusty in New Delhi, Sharat Pradhan in Lucknow and Neha Dasgupta in Mumbai, Editing by Raju Gopalakrishnan)

Justice R.M. Lodha loudly berated the attorney-general, the government’s top lawyer, for what he said was clear evidence of interference in a CBI inquiry into alleged irregularities in the allocation of coalfield licences to private companies, a case dubbed “Coalgate” by the media.

The Supreme Court judge’s statement gave, for the first time, an authoritative voice to opposition complaints that for years the Congress-led government had been using the investigating agency to cover up wrongdoing, keep fickle coalition allies in line and political opponents at bay.

Government ministers and the CBI have repeatedly denied such accusations.

“The CBI conducts all investigations in a free, fair and impartial manner as per the law,” said CBI spokeswoman Dharini Mishra.

The judge’s unusually harsh criticism has shone a spotlight on the role of the CBI – which has a mandate to investigate corruption and all major crimes – and its relationship with governments of the day in the world’s largest democracy, in particular the nine-year-old Congress government, which has been battered by a series of corruption scandals.

It has given ammunition to anti-corruption campaigners who say political interference in the CBI reinforces the need for an independent anti-graft body that can investigate corruption involving government officials. Legislation to set up such an agency is stalled in parliament.

Two former CBI directors told Reuters that the agency was subject to political influence, irrespective of which party happened to be in power at the time.

“The political class will never give independence to the CBI,” said former director Joginder Singh, who says he was forced out after refusing to back off from an investigation into a chief minister of Bihar in the 1990s.

Vijay Shanker, who was CBI director between 2005 and 2008, said there was “no question” that political pressure was brought to bear on the agency, although he declined to say whether he had personally experienced such interference.

The CBI, which proudly proclaims its motto to be “Industry, Impartiality and Integrity”, has denied the latest allegations and said the government made only minor changes to a confidential progress report on its Coalgate investigation. Not so, said Judge Lodha. The “heart of the report” had been altered, he thundered at a hearing on Wednesday.

KEY ALLY RUNNING SCARED

Opposition parties accuse Prime Minister Manmohan Singh’s Congress – which rules as part of a minority coalition – of dirty tricks to bully powerful but capricious regional parties to help keep it in power and support it on key parliamentary votes.

Nominally the CBI is independent. But administrative control is with the Department of Personnel and Training, which falls under the prime minister’s office.

On operational matters, the agency has a number of masters, including the courts and the anti-graft Central Vigilance Commission.

“We have never, never misused our authority or position for the purpose of arm-twisting any of our alliances. The CBI has been functioning independently,” Minister of State for Personnel V. Narayanasamy told the media recently.

A key ally of the government, Mulayam Singh Yadav, whose Samajwadi Party provides crucial support to the coalition in parliament, said in April he was at the mercy of the CBI, which is investigating him for allegedly amassing wealth disproportionate to his income.

“It’s not easy to fight with the government. It has a thousand hands and can use the CBI and put one in jail,” complained Yadav, whose party rules Uttar Pradesh, which has a population of 200 million.

The CBI investigation into the source of Yadav’s wealth, launched in 2007, is still ongoing.

Yadav is not alone. The CBI is investigating similar allegations involving Mayawati, the leader of the Bahujan Samaj Party, another Uttar Pradesh party on whom the government relies heavily for support in parliament.

The main opposition, the Bharatiya Janata Party (BJP), has alleged that the government used the threat of the CBI investigation to force Mayawati to back a controversial proposal to open up the country’s retail sector to foreign investors even though she is on record as being opposed to it.

Two days after another key regional ally, the Dravida Munnetra Kazhagam (DMK) party, pulled out of the government in March, CBI agents raided the home of a party leader, ostensibly in connection with a tax evasion case.

The prime minister swiftly distanced himself from the action, but the damage was already done. Political opponents and local media interpreted the raid as an act of revenge for the DMK pullout, which whittled down the government’s dwindling number of seats in parliament.

“Considering the enormous amount of misuse of political clout, the CBI has lost its credibility,” Arun Jaitley, the BJP leader of the opposition in the Rajya Sabha, said after the latest Coalgate revelations.

When the BJP was in power from 1998-2004, however, it was also accused of using the CBI for its own ends.

“Every political party wants to accuse the political rival in power of misusing the CBI,” former CBI director Shanker said. “And, the cycle continues.”

(Additional reporting by Sharat Pradhan in Lucknow and Annie Banerji in New Delhi; Editing by Raju Gopalakrishnan)

Justice R.M. Lodha loudly berated the attorney-general, the government’s top lawyer, for what he said was clear evidence of interference in a CBI inquiry into alleged irregularities in the allocation of coalfield licenses to private companies, a case dubbed “Coalgate” by the Indian media.

The Supreme Court judge’s statement gave, for the first time, an authoritative voice to opposition complaints that for years India’s Congress party-led government had been using the investigating agency to cover up wrongdoing, keep fickle coalition allies in line and political opponents at bay.

Government ministers and the CBI have repeatedly denied such accusations.

“The CBI conducts all investigations in a free, fair and impartial manner as per the law,” said CBI spokeswoman Dharini Mishra.

The judge’s unusually harsh criticism has shone a spotlight on the role of the CBI – which has a mandate to investigate corruption and all major crimes – and its relationship with governments of the day in the world’s largest democracy, in particular the nine-year-old Congress government, which has been battered by a series of corruption scandals.

It has given ammunition to anti-corruption campaigners who say political interference in the CBI reinforces the need for an independent anti-graft body that can investigate corruption involving government officials. Legislation to set up such an agency is stalled in parliament.

Two former CBI directors told Reuters that the agency was subject to political influence, irrespective of which party happened to be in power at the time.

“The political class will never give independence to the CBI,” said former director Joginder Singh, who says he was forced out after refusing to back off from an investigation into a chief minister of the eastern state of Bihar in the 1990s.

Vijay Shanker, who was CBI director between 2005 and 2008, said there was “no question” that political pressure was brought to bear on the agency, although he declined to say whether he had personally experienced such interference.

The CBI, which proudly proclaims its motto to be “Industry, Impartiality and Integrity”, has denied the latest allegations and said the government made only minor changes to a confidential progress report on its Coalgate investigation. Not so, said Judge Lodha. The “heart of the report” had been altered, he thundered at a hearing on Wednesday.

KEY ALLY RUNNING SCARED

Opposition parties accuse Prime Minister Manmohan Singh’s Congress – which rules as part of a minority coalition – of dirty tricks to bully powerful but capricious regional parties to help keep it in power and support it on key parliamentary votes.

Nominally the CBI is independent. But administrative control is with the Department of Personnel and Training, which falls under the prime minister’s office.

On operational matters, the agency has a number of masters, including the courts and the anti-graft Central Vigilance Commission.

“We have never, never misused our authority or position for the purpose of arm-twisting any of our alliances. The CBI has been functioning independently,” Minister of State for Personnel V. Narayanasamy told Indian media recently.

A key ally of the government, Mulayam Singh Yadav, whose Samajwadi Party provides crucial support to the coalition in parliament, said in April he was at the mercy of the CBI, which is investigating him for allegedly amassing wealth disproportionate to his income.

“It’s not easy to fight with the government. It has a thousand hands and can use the CBI and put one in jail,” complained Yadav, whose party rules the northern state of Uttar Pradesh, which has a population of 200 million.

The CBI investigation into the source of Yadav’s wealth, launched in 2007, is still ongoing.

Yadav is not alone. The CBI is investigating similar allegations involving Mayawati, the leader of the Bahujan Samaj Party, another Uttar Pradesh party on whom the government relies heavily for support in parliament.

India’s main opposition, the Bharatiya Janata Party (BJP), has alleged that the government used the threat of the CBI investigation to force Mayawati to back a controversial proposal to open up the country’s retail sector to foreign investors even though she is on record as being opposed to it.

Two days after another key regional ally, the Dravida Munnetra Kazhagam (DMK) party, pulled out of the government in March, CBI agents raided the home of a party leader, ostensibly in connection with a tax evasion case.

The prime minister swiftly distanced himself from the action, but the damage was already done. Political opponents and local media interpreted the raid as an act of revenge for the DMK pullout, which whittled down the government’s dwindling number of seats in parliament.

“Considering the enormous amount of misuse of political clout, the CBI has lost its credibility,” Arun Jaitley, the BJP leader of the opposition in the upper house of parliament, said after the latest Coalgate revelations.

When the BJP was in power from 1998-2004, however, it was also accused of using the CBI for its own ends.

“Every political party wants to accuse the political rival in power of misusing the CBI,” former CBI director Shanker said. “And, the cycle continues.”

(Additional reporting by Sharat Pradhan in Lucknow and Annie Banerji in New Delhi; Editing by Raju Gopalakrishnan)

In the space of just a week, Singh’s government has seen its economic reform legislative agenda disintegrate in parliament as opposition members have repeatedly disrupted proceedings to demand the resignation of the two-term technocrat and his law and railway ministers.

The new corruption allegations and the fallout in parliament are embarrassing for a government which has been aggressively courting foreign investors in major world capitals with promises of more measures to liberalise the economy.

“How will the finance minister face investors abroad after the exposure of new corruption scandals and the parliament session ending without passing any important bills?” asked a Finance Ministry official, speaking on condition of anonymity because of the sensitivity of the issue.

Parliament is due to go into a 2-1/2 month recess on Friday after one of the least productive sessions on record, a notable low given that India’s parliament has regularly been paralysed by filibustering opposition parties.

Singh’s government has been on the back foot for the past week, fending off suggestions that the law minister interfered with a federal police investigation into irregularities in the award of coalfield concessions to private and state companies.

The latest scandal came on Friday with the arrest of the nephew of Railway Minister Pawan Kumar Bansal in connection with allegations that he accepted a bribe of $160,000 to arrange the promotion of a railways official.

There has been no suggestion that Bansal was in anyway involved but the case reinforces popular perception that the government is “corrupt beyond redemption”, The Hindu newspaper said in an editorial on Monday.

The scandals have dented Singh’s Teflon image. The prime minister, who has a gold-plated reputation for probity, has been untouched by the raft of corruption scandals that have battered his government during its nine years in power. But the latest allegations have raised questions about how so many graft scandals have occurred on his watch.

The main opposition Bharatiya Janata Party, which will face off against the ruling Congress party in elections due by May 2014, has demanded that Singh quit. The latest edition of India’s most widely read news magazine, India Today, said Singh was a “political liability” for his party and should go.

Congress party leaders meeting on Sunday backed Singh and the ministers under fire. One party insider said the leadership feared a domino effect.

“Sacking the railway minister would mean sacking the law minister as well, which would bring the prime minister in the direct line of fire,” a Congress party leader with knowledge of the meeting told Reuters on condition of anonymity.

COALGATE FLARES UP AGAIN

The so-called Coalgate scandal emerged last August with the release of a report by the CAG that questioned the lack of transparency and undervaluing in the award of potentially valuable concessions.

But it was quickly eclipsed by Singh’s launch of investor-friendly economic reforms on September 14 that shifted the narrative of a government in crisis to a government in overdrive to win back foreign investors.

A new furore over Coalgate erupted last week when the director of the Central Bureau of Investigation told the Supreme Court that government officials, including a top official in the prime minister’s office, had amended a report on the investigation meant for the court.

His statement caused a media frenzy and was interpreted by critics to mean the government had interfered in the inquiry. The Supreme Court demanded an explanation and on Monday the director clarified in an affidavit that only minor technical changes had been made to the report.

But his clarification did little to quieten the uproar in parliament. The government now appears unlikely to succeed in getting reforms to increase foreign investment in the pension and insurance sectors through parliament before Friday.

(Additional reporting by Frank Jack Daniel, Annie Banerji, Manoj Kumar and Nigam Prusty; Editing by Robert Birsel)

In the space of just a week, Singh’s government has seen its economic reform legislative agenda disintegrate in parliament as opposition members have repeatedly disrupted proceedings to demand the resignation of the two-term technocrat and his law and railway ministers.

The new corruption allegations and the fallout in parliament are embarrassing for a government which has been aggressively courting foreign investors in major world capitals with promises of more measures to liberalize the economy.

“How will the finance minister face investors abroad after the exposure of new corruption scandals and the parliament session ending without passing any important bills?” asked a Finance Ministry official, speaking on condition of anonymity because of the sensitivity of the issue.

Parliament is due to go into a 2-1/2 month recess on Friday after one of the least productive sessions on record, a notable low given that India’s parliament has regularly been paralyzed by filibustering opposition parties.

Singh’s government has been on the back foot for the past week, fending off suggestions that the law minister interfered with a federal police investigation into irregularities in the award of coalfield concessions to private and state companies.

The latest scandal came on Friday with the arrest of the nephew of Railway Minister Pawan Kumar Bansal in connection with allegations that he accepted a bribe of $160,000 to arrange the promotion of a railways official.

There has been no suggestion that Bansal was in anyway involved but the case reinforces popular perception that the government is “corrupt beyond redemption”, The Hindu newspaper said in an editorial on Monday.

The scandals have dented Singh’s Teflon image. The prime minister, who has a gold-plated reputation for probity, has been untouched by the raft of corruption scandals that have battered his government during its nine years in power. But the latest allegations have raised questions about how so many graft scandals have occurred on his watch.

The main opposition Bharatiya Janata Party, which will face off against the ruling Congress party in elections due by May 2014, has demanded that Singh quit. The latest edition of India’s most widely read news magazine, India Today, said Singh was a “political liability” for his party and should go.

Congress party leaders meeting on Sunday backed Singh and the ministers under fire. One party insider said the leadership feared a domino effect.

“Sacking the railway minister would mean sacking the law minister as well, which would bring the prime minister in the direct line of fire,” a Congress party leader with knowledge of the meeting told Reuters on condition of anonymity.

COALGATE FLARES UP AGAIN

The so-called Coalgate scandal emerged last August with the release of a report by the auditor general that questioned the lack of transparency and undervaluing in the award of potentially valuable concessions.

But it was quickly eclipsed by Singh’s launch of investor-friendly economic reforms on September 14 that shifted the narrative of a government in crisis to a government in overdrive to win back foreign investors.

A new furor over Coalgate erupted last week when the director of the Central Bureau of Investigation told the Supreme Court that government officials, including a top official in the prime minister’s office, had amended a report on the investigation meant for the court.

His statement caused a media frenzy and was interpreted by critics to mean the government had interfered in the inquiry. The Supreme Court demanded an explanation and on Monday the director clarified in an affidavit that only minor technical changes had been made to the report.

But his clarification did little to quieten the uproar in parliament. The government now appears unlikely to succeed in getting reforms to increase foreign investment in the pension and insurance sectors through parliament before Friday.

(Additional reporting by Frank Jack Daniel, Annie Banerji, Manoj Kumar and Nigam Prusty; Editing by Robert Birsel)

Addressing a gathering of Indian business tycoons in New Delhi, Gandhi did not touch on any of the issues bedevilling Asia’s third-largest economy such as high inflation, decelerating investment, a ballooning current account deficit and red tape that ties up infrastructure projects for years.

Instead, in a speech that was long on imagery and anecdotes but short on specifics, he called for a revamp of the political system to better respond to the needs of India’s 1.2 billion people, a closer relationship between government and big business and unleashing the potential of the Indian “beehive”.

“Millions of Indians are brimming with energy. We are now sitting on an unprecedented tide of transformation. This tremendous movement of people and ideas are going to define this country in the 21st century,” Gandhi said.

The hour-long address to the Confederation of Indian Industry, which was broadcast on all major television stations, was closely watched by economists, diplomats and investors keen to gain insight into the thinking of the shy and secretive 42-year-old lawmaker, who rarely speaks in public and shuns the limelight.

“He wants to change the political system and how it works which is an interesting thought. But the important part is execution about which he is vague or does not yet have answers,” said Anjali Verma, economist at PhillipCapital.

The main opposition Bharatiya Janata Party (BJP) called the speech confused, while the top trending topic on Twitter in India while Gandhi was speaking was #PappuCII. Pappu is a derogatory colloquial Hindi word meaning “dumb kid”.

Many had expected Gandhi to use the platform of the CII event to outline his economic vision for a country with ambitions to become a major power but still struggling to uplift hundreds of millions of people mired in poverty.

“I think he was very honest and made the points straight from his heart,” said Rakesh Bharti Mittal, vice-chairman and managing director of Bharti Enterprises, one of India’s biggest business groups, who was in the audience.

But, he added: “Ultimately, whoever leads the country will need an economic agenda.”

While Gandhi has not said whether he wants to become prime minister, he is the face of the ruling Congress party’s 2014 election campaign and is widely seen as his party’s leading candidate for prime minister, if it does well in the polls.

He ridiculed the national guessing game over whether or not he will become prime minister, saying: “It is all smoke. The only relevant question in this country is how can we give our people voice. It is not important what Rahul Gandhi thinks, its important what a billion Indians think.”

DYNASTIC POLITICS

Gandhi’s rare public utterances mean that there is a huge interest in what he says when he does speak. Little is known about what he thinks about the important issues of the day and what he would do if he were to become prime minister.

His father, grandmother and great-grandfather were prime ministers and his mother, who is head of the ruling Congress party, is arguably the most powerful politician in India.

The Congress party appointed him vice president in January in an effort to boost his profile. But he has been overshadowed by Narendra Modi, the charismatic pro-business leader of the BJP who harbours prime ministerial ambitious and has been loudly touting his record as chief minister of Gujarat, a state with a booming economy.

Indian media often present the 2014 election as a face-off between Rahul, best known for his famous last name, and Modi, who has been lauded by Indian corporate leaders and foreign companies for his business-friendly policies.

The mixed reception for Gandhi’s speech is likely to renew speculation about possible Congress party alternatives for prime minister. Prime Minister Manmohan Singh has not ruled out serving a third term, while Finance Minister P. Chidambaram is also frequently mentioned as a possible candidate.

(Additional reporting by Subhadip Sircar in Mumbai and Anurag Kotoky in New Delhi; Editing by Robert Birsel)

Addressing a gathering of Indian business tycoons in New Delhi, Gandhi did not touch on any of the issues bedeviling Asia’s third-largest economy such as high inflation, decelerating investment, a ballooning current account deficit and red tape that ties up infrastructure projects for years.

Instead, in a speech that was long on imagery and anecdotes but short on specifics, he called for a revamp of the political system to better respond to the needs of India’s 1.2 billion people, a closer relationship between government and big business and unleashing the potential of the Indian “beehive”.

“Millions of Indians are brimming with energy. We are now sitting on an unprecedented tide of transformation. This tremendous movement of people and ideas are going to define this country in the 21st century,” Gandhi said.

The hour-long address to the Confederation of Indian Industry, which was broadcast on all major television stations, was closely watched by economists, diplomats and investors keen to gain insight into the thinking of the shy and secretive 42-year-old lawmaker, who rarely speaks in public and shuns the limelight.

“He wants to change the political system and how it works which is an interesting thought. But the important part is execution about which he is vague or does not yet have answers,” said Anjali Verma, economist at PhillipCapital.

The main opposition Bharatiya Janata Party (BJP) called the speech confused, while the top trending topic on Twitter in India while Gandhi was speaking was #PappuCII. Pappu is a derogatory colloquial Hindi word meaning “dumb kid”.

Many had expected Gandhi to use the platform of the CII event to outline his economic vision for a country with ambitions to become a major power but still struggling to uplift hundreds of millions of people mired in poverty.

“I think he was very honest and made the points straight from his heart,” said Rakesh Bharti Mittal, vice-chairman and managing director of Bharti Enterprises, one of India’s biggest business groups, who was in the audience.

But, he added: “Ultimately, whoever leads the country will need an economic agenda.”

While Gandhi has not said whether he wants to become prime minister, he is the face of the ruling Congress party’s 2014 election campaign and is widely seen as his party’s leading candidate for prime minister, if it does well in the polls.

He ridiculed the national guessing game over whether or not he will become prime minister, saying: “It is all smoke. The only relevant question in this country is how can we give our people voice. It is not important what Rahul Gandhi thinks, its important what a billion Indians think.”

DYNASTIC POLITICS

Gandhi’s rare public utterances mean that there is a huge interest in what he says when he does speak. Little is known about what he thinks about the important issues of the day and what he would do if he were to become prime minister.

His father, grandmother and great-grandfather were prime ministers and his mother, who is head of the ruling Congress party, is arguably the most powerful politician in India.

The Congress party appointed him vice president in January in an effort to boost his profile. But he has been overshadowed by Narendra Modi, a charismatic pro-business leader of the BJP who harbors prime ministerial ambitious and has been loudly touting his record as chief minister of Gujarat, a state with a booming economy.

Indian media often present the 2014 election as a face-off between Rahul, best known for his famous last name, and Modi, who has been lauded by Indian corporate leaders and foreign companies for his business-friendly policies.

The mixed reception for Gandhi’s speech is likely to renew speculation about possible Congress party alternatives for prime minister. Prime Minister Manmohan Singh has not ruled out serving a third term, while Finance Minister P. Chidambaram is also frequently mentioned as a possible candidate.

(Additional reporting by Subhadip Sircar in Mumbai and Anurag Kotoky in New Delhi; Editing by Robert Birsel)

The invitation was a symbolic victory for Modi, a popular but divisive Hindu nationalist leader who is widely seen as harboring ambitions to become prime minister in 2014 and has been trying to win greater international acceptance.

However, the offer from Republican members of the U.S. House of Representatives is not likely to influence whether he eventually receives a visa from the State Department, which said such invitations have “no bearing” on their decisions.

Modi is accused by critics of not doing enough to stop – or of even quietly encouraging – riots in 2002 in which at least 1,000 people, mainly Muslims, were killed. He has denied the accusations but they have cast a shadow over his political ambitions and for years he was shunned by the West.

Indian media saw Thursday’s visit by Representatives Aaron Schock, Cathy McMorris-Rodgers and Cynthia Lummis as a public relations coup for Modi, who has been trying to cultivate an image of a statesman. He quickly tweeted that the congressional delegation had lauded his leadership abilities.

It was the highest level U.S. delegation to meet Modi since the riots, an official in Modi’s office said. The United States has maintained links with his administration at a consular level. U.S. companies such as Ford Motor Co. have major operations in Gujarat.

Schock, an Illinois congressman, told a news conference that American business leaders had encouraged him to visit Gujarat “because unlike other places in India our foreign investment is welcome”.

“My colleagues and I were thoroughly impressed with our meeting with Modi and I will tell you that he is a very dynamic person and he has a pretty impressive track record here in the state of Gujarat.

“We extended an invitation to the chief minister to come to the United States and share with our colleagues some of what he’s done here in the state.”

McMorris-Rodgers, who is from Washington state and is the fourth-ranking Republican leader in the House of Representatives, said U.S. lawmakers would work with the Obama administration to ease the travel curbs on Modi.

The issue of human rights was not discussed during the 90-minute meeting, an official in Modi’s office said.

There was no immediate comment from the State Department but Robert Blake, the U.S. Assistant Secretary of State for South and Central Asia, said in February that the United States was not reconsidering its policy towards Modi.

“Visa decisions for all individuals are grounded in U.S. law and made by the Department of State on a case-by-case basis,” said a U.S. State Department spokeswoman. “An invitation from a U.S. lawmaker has no bearing on any decision regarding potential visas.”

“This case is no different. There has been no change to our visa policy. Our longstanding policy with regard to the Chief Minister is that he is welcome to apply for a visa and await a review like any other applicant,” she added. “I am not going to speculate about what the outcome might be.”

The lawmakers’ trip came week after a British foreign minister met Modi in Gujarat, the most high-profile visit by a British official since the country ended its boycott of Modi in October. Modi has also been invited to a session of the European Parliament, his website said.

Diplomats in New Delhi say that given Modi’s rising star, it is important for foreign governments to get to know him better.

(Additional reporting by Annie Banerji, Matthias Williams and Satarupa Bhattacharjya in New Delhi and Arshad Mohammed in Washington; Editing by Nick Macfie)

The invitation was a symbolic victory for Modi, a popular but divisive Hindu nationalist leader who is widely seen as harbouring ambitions to become prime minister in 2014 and has been trying to win greater international acceptance.

Modi is accused by critics of not doing enough to stop – or even quietly encouraging – riots in 2002 in which at least 1,000 people, mainly Muslims, were killed. He has denied the accusations but they have cast a shadow over his political ambitions and for years he was shunned by the West.

Local media saw Thursday’s visit by Republican lawmakers Aaron Schock, Cathy McMorris-Rodgers and Cynthia Lummis as a public relations coup for Modi, who has been trying to cultivate an image of a statesman. He quickly tweeted that the congressional delegation had lauded his leadership abilities.

It was the highest-level U.S. delegation to meet Modi since the riots, an official in Modi’s office said. The United States has maintained links with his administration at a consular level. U.S. companies such as Ford Motor Co.(F.N: Quote, Profile, Research) have major operations in Gujarat.

Schock, an Illinois congressman, told a news conference that American business leaders had encouraged him to visit Gujarat “because unlike other places in India our foreign investment is welcome”.

“My colleagues and I were thoroughly impressed with our meeting with Modi and I will tell you that he is a very dynamic person and he has a pretty impressive track-record here in the state of Gujarat.

“We extended an invitation to the chief minister to come to the United States and share with our colleagues some of what he’s done here in the state.”

McMorris-Rodgers, who is from Washington state and is the fourth-ranking Republican leader in the House of Representatives, said U.S. lawmakers would work with the Obama administration to ease the travel curbs on Modi.

The issue of human rights was not discussed during the 90-minute meeting, an official in Modi’s office said.

There was no immediate comment from the State Department but Robert Blake, the U.S. Assistant Secretary of State for South and Central Asia, said in February that the United States was not reconsidering its policy towards Modi.

A U.S. embassy spokesman declined to comment on the lawmakers’ visit.

The lawmakers’ trip comes a week after a British foreign minister met Modi in Gujarat, the most high-profile visit by a British official since the country ended its boycott of Modi last October. Modi has also been invited to a session of the European Parliament, his website says.

Diplomats in New Delhi say that given Modi’s rising star, it is important for foreign governments to get to know him better.

(Reporting By Ross Colvin, Annie Banerji, Matthias Williams and Satarupa Bhattacharjya; Editing by Nick Macfie)