The New Nation - Internet Edition

Reuters, New Delhi

Stung by its big loss to the Bharatiya Janata Party (BJP) in elections in Gujarat, Congress is expected to switch to damage-control and populism ahead of national elections due in 2009.

That could mean dumping a historic nuclear deal with the United States, delaying a much-needed increase in fuel prices and presenting a budget filled with sops to woo voters and cement ties with coalition allies, analysts said. Prime Minister Manmohan Singh, whose reformist agenda had already been sidelined by pressure from the government's communist allies, will be further weakened, with his party more worried about returning to power than running the country. "There is only one way to describe this and that is, it is a big setback for Congress," said N. Bhaskara Rao, a political analyst at New Delhi's Centre for Media Studies. "It is a setback to the nuclear deal as the prime minister's hand is much weaker." "They will reconsider their priorities, there will be realignment in terms of coming closer to their allies and it will rain sops to catch voters," he said.