Will a 'fake' murder change the balance of India's politics?

In addition to his appeal among Hindu nationalists, Narendra Modi has benefitted from a reputation of clean governance. This is where the case may hurt the most.

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In India, extrajudicial police killings are fairly routine. It is commonly understood that the police are often more intent on killing a dangerous criminal than arresting him - some so-called "encounter specialists" openly boast about their kill records. But it is a "fake encounter" that has the country riveted. Rogue officers are accused not only of abusing their powers, but of carrying out a politically motivated assassination disguised as a police action. The influential former home minister of Gujarat state, Amit Shah, is in the dock accused of planning the killing.

The wider implications centre on Mr Shah's boss, Narendra Modi, the chief minister of Gujarat and, until recently, the golden boy of the Bharatiya Janata Party (BJP), India's main opposition party. While Mr Modi has not been directly implicated in the crime, it casts a shadow over his administration and the style of BJP politics that has governed Gujarat for the last 10 years. As the BJP redefines itself after last year's election loss to the Congress Party, it is a scandal that could shape national politics.

Just the tawdry details of the case are helping to keep the story alive in the Indian media. The principle victim Sohrabuddin Sheikh remains a controversial figure, first accused of being an Islamist terrorist, rumoured to be a police informant, and now commonly referred to as an extortionist. What is more certain is how he was killed. He and his wife were abducted by police in 2005, kept hostage at a farmhouse for three days and then he was shot dead in a staged escape attempt. His wife is also believed to have been killed. An associate of Sheikh and the only eyewitness to the encounter was also murdered a year later.

At first, Sheikh was accused of an assassination attempt against Mr Modi. But signs of a cover-up began to surface immediately. The investigation was headed by the Gujarat police, which reported to the home ministry under Mr Shah. Even so, state officials have been forced to admit that the killing was staged. Eventually the Supreme Court of India brought in the federal Central Bureau of Investigation (CBI) to take over the case. Evidence of phone calls between Mr Shah and the policemen who carried out the killing led to the former minister's arrest last week, although as of yesterday he had been stonewalling interrogators.

What makes the case more than just another dirty political corruption case is Mr Shah's prominent role in the Modi administration, in which he has held the portfolios of 10 different ministries. His political history is closely intertwined with Mr Modi, and he is considered one of the few to have the ear of the chief minister. Given the close relationship, it is not surprising that Congress politicians and some in the media are eager for Mr Modi's blood.

He has been a controversial figure, accused of incitement in the Gujarat riots of 2002, which saw fierce fighting between the Hindu majority and Muslim minority. An estimated 2,000 people were killed, most of whom were Muslims. Although Mr Modi was questioned by federal investigators on the riots earlier this year, no charges have been made to stick. In addition to his appeal among Hindu nationalists, Mr Modi has benefitted from a reputation of clean governance and economic competence. This is where the murder case may hurt the most.

No solid proof has emerged as to why Sheikh was killed, but that has not stopped the rumours from making the rounds. One of the most accepted stories is that Sheikh was killed not because of bogus links to terrorism, but because he was running a protection and extortion racket that Mr Shah allegedly masterminded. The opposition Congress Party in Gujarat is obviously hoping that Mr Modi is directly implicated in the Sheikh murder. If he is arrested, the BJP in Gujarat might just fall apart.

But dspite the crossed fingers of Congress Party members, there are few signs that Mr Modi's position in the state is directly threatened. The chief minister is personally leading the fight against the CBI, accusing it of being a tool of the national government. And his popularity is undimmed, with his followers showing up in strength at every rally. The main problem for Mr Modi and the BJP is on the national stage. Gujarat was the showcase administration for the BJP, displaying its ability to effectively rule. The taint of corruption, even if it is just alleged, is sullying the party's reputation when it was already suffering. Another scandal involving BJP politicians' illegal mining operations in the state of Karnataka has further hurt the party's image.

Nationally, the Congress Party is on the attack. And the scandals arrived just in time. Opposition parties from across the spectrum were attacking New Delhi for rising prices and inflation, but the media spotlight is now transfixed on the Mr Shah and Mr Modi show. Even if Mr Shah is acquitted, it will be difficult to repair the damage to reputations in the world of the 24-hour news cycle. Mr Modi's star may already have been on the wane. In the coalition politics that now chart India's federal politics, the narrow appeal to communal sentiments may be a liability. In place of a reputation for innovative, business-friendly policy, Mr Modi's sectarian image is seen as a sure-fire way to alienate Muslims.

But without the Gujarat administration's reputation for good governance, there is little that the BJP can fall back on. Its Hindu nationalist ideology, for the time being at least, does not win elections. It would be far too early to write off the resilient Mr Modi. But if he does fall, so might the BJP as we know it. Talha Aquil is a former financial services consultant and political risk analyst specialising in South Asia