Column One: India's future: an ugly little man with a lap-top

IS INDIA capable of transforming itself? Or is it condemned to be stuck in the mud of its misery? Most contests in this huge democracy's current election campaign offer no optimistic answers to the question of whether a country this big, varied and unwieldy can accelerate into the future like a Japan, Malaysia or China.

But in the large southern state of Andhra Pradesh, which went to the polls on Saturday (the results will not be known until next month), an elemental, Manichaean struggle is being played out. Here hope is ranged against despair, real development is in a fight to the death with the forces of stagnation and regression.

If hope wins, all India may start to change in the same way: the enormous vessel will ponderously begin to alter course. If hope loses, India will remain India and "the Eternal". Connoisseurs of muck and mysticism can sleep easy.

Chandrababu Naidu is the chief minister of Andhra Pradesh and leader of the Telugu Desam Party, a regional party (Telugu is the state language). Forty-nine, gruff and grim, he looks, in the words of a rival politician "like a pickpocket at a bus stop". His speeches are a gabble of deeds and promises - no lyrical flights, no poetry, few jokes.

But Mr Naidu has seen the light. "To say that we are a poor country has become a cliche," he has written. "We hear it said so often from our childhood, so deeply is it ingrained in our collective consciousness, that we have almost come to believe that we are condemned to poverty. This fatalism is a great tragedy..." In the four and a half years that he has been chief minister, Mr Naidu has hurled himself into changing all this. In less than one full term he has left an enormous mark.

It is visible in ways big and small. The Secretariat, the seat of government in Hyderabad, the capital, is full of trees, grass and flowers. The offices are plain, but they are clean, and humming with computers.

So many flyovers have been put up in Hyderabad (34) that it is beginning to resemble a Japanese city. All over the vast state, 275,000 sq kms, population about 80 million, roads are being widened and repaired.

Cutting subsidies and beginning to disentangle the state from industries such as electricity, Mr Naidu has become the darling of agencies such as the World Bank. In June of last

year, it approved a loan to the state of $540m (pounds 340m), the first money to arrive in India after sanctions were imposed because of the nuclear tests.

Mr Naidu, rarely photographed without his lap-top, has lured Microsoft, IBM and Oracle to the hi-tech city he is building close to Hyderabad, a main base for India's booming software industry.

But Mr Naidu is acutely conscious that nearly 60 per cent of his people are illiterate: only by transforming the prospects of the poor farmers can he hope to change Andhra for good. He has pioneered what he calls a "people-centred development process" designed to make government sensitive to the needs of the smallest village, and galvanise government officials into tackling them.

Although he has scored high popularity ratings during his term, he now faces the fight of his life. Congress, reduced to a rump in 1994, is desperate to win, and it has several things on its side.

Mr Naidu has cemented his friendship with the Hindu nationalist Bharatiya Janata Party (BJP), offering conditional (and probably vital) support to a BJP-led government at the Centre - and this has driven away his minority supporters, especially the Muslims. More damagingly, Mr Naidu has failed to lift the peasants' daily burdens. On the contrary, in the short term he has made their lives harder: raising electricity and water charges and bus fares, cutting the rice subsidy and raising taxes.

His position is thus analogous to that of Margaret Thatcher in 1983 - with no Falklands factor. And in place of Michael Foot, Mr Naidu has a ferocious and cynical opponent in the person of Dr Y S Rajasekhara Reddy, Congress leader in the state.

Dr Reddy comes on with the most wonderful lure. To hell with Telecom reform and the removing of regulatory obstacles, he says: to all the state's farmers, Congress promises Free Power! And not just tomorrow, but yesterday, too! All unpaid bills - amounting to some pounds 70m - to be cancelled. To hell with tickling the World Bank, seems to be the message; let's get our snouts in the trough.

"Free power," Mr Naidu told me as we buzzed above the endless plateau in his helicopter between campaign stops, "means no power." As Andhra Pradesh voted, the two sides - India's past and its future - appeared neck and neck. If Chandrababu Naidu loses, Indian democracy will have failed a test with awesome implications.