Going Up in Flames.(Hindus on Muslims in Gujarat, India)(Brief Article)(Statistical Data Included)

Mohammad Ilyas picks his way through the smoking skeleton of his garment shop. Amid the charred wood, the businessman, wearing a filthy green shirt, is a picture of bewilderment. It's the first time he's seen his business since he pulled down the shutters and went to lunch one day last week. Hours later, a Hindu mob set upon his and several other Muslim-owned stores in the city of Ahmedabad, in western India's Gujarat state. The gangs looted and torched the shops, finishing the job with a makeshift gas-canister bomb. Ilyas, 32 and sole breadwinner for his family of five, aims to start over, despite the fact that he has no insurance and only $40 in his pocket. "Businessmen can't afford to be angry," he says. "We're helpless Muslims. We've got to settle our differences with the Hindus and get on with business to survive."

That won't be easy. Gujarat is the second-most industrialized state in India. Its port network, good roads, reliable electricity and affluent, literate population of 50 million make it India's top destination for foreign investment. But communal violence has done grave damage to the local economy. The anti-Muslim pogroms continued to rock a curfew-bound Ahmedabad last week. At least 40 people were burned, stabbed or hacked to death. The official death toll in nine weeks of strife is more than 900, but is probably much higher. Beyond lives, though, the cost to the state that provides 6 per cent of India's GDP--and tens of thousands of jobs--is catastrophic. According the state's chamber of commerce, Gujarat has suffered an estimated $2.3 billion in business losses in little more than a month.

The effects have spread far beyond the state. India's ruling Hindu- nationalist Bharatiya Janata Party (BJP)--which also holds the reins in Gujarat--faces a potentially embarrassing censure motion this week in Parliament. Opposition parties, angry at the failure of central and state governments to curb the violence, forced the vote, though they can't topple the ruling coalition. The prime minister, Atal Behari Vajpayee, fended off calls to sack Gujarat's chief minister, Narendra Modi, and even suggested that Modi hold an early state election. Vajpayee may think that Modi can capitalize on the mayhem and possibly reverse a string of BJP electoral defeats. He may be right. One magazine-sponsored poll shows 52 percent of urban Gujarat would expect the BJP to win.

Businesses large and small have been hurt by the violence. ...