* Members of rival parties fight in two cities
* More than 800 million voters register
* Pro-business Hindu nationalist leads opinion polls
* Radical anti-corruption party shakes up race (Recasts, adds context, details)
By Frank Jack Daniel
NEW DELHI, March 5 (Reuters) - Street clashes erupted in India after an announcement on Wednesday that parliamentary elections will start on April 7 in a race that pits Hindu nationalist Narendra Modi against the unpopular Nehru-Gandhi family's ruling party.
Chief Election Commissioner V.S. Sampath said 814 million people had registered to vote, a number exceeding the population of Europe and a world record. Results are due on May 16.
In Delhi and a regional city, supporters of a young anti-corruption party battled members of Modi's Bharatiya Janata Party (BJP). The clashes with stones and clubs bloodied several people on both sides. Police used water cannons on protesters.
The violence broke out after police detained the leader of the anti-corruption Aam Aadmi (Common Man) Party (AAP) during a campaign in Modi's state of Gujarat. Small groups of supporters gathered outside BJP offices to protest his detention.
"We came in a peaceful manner, we stood outside, they shut the gates. We shouted slogans: 'Have shame Narendra Modi'," said AAP activist Shazia Ilmi. "They started throwing stones from inside." The BJP blamed the AAP protesters for the fighting.
The election campaign coincides with growing anger among urban Indians over corruption, as well as a sense that the centre-left government led by the Congress party has frittered away opportunities for rapid growth.
Modi has emerged in opinion polls as the favourite to head the next government, buoyed by his strong economic track record as chief minister of Gujarat, a west coast state.
"I think everyone is looking for strong leadership. This places Modi at an advantage. He's showing that he's a strong leader," said Mohan Guruswamy of the Centre for Policy Alternatives, a Delhi-based think-tank.
SETTING AGENDA
Born of a street movement against graft scandals related to the sale of natural resources over the last decade, the AAP has also gained ground, alleging corruption in both main parties.
It may not win many seats, but is setting the election agenda by harping on high utility prices and crony capitalism.
Exuding self-confidence, Modi has won the support of many middle-class Indians who even a year ago would not have voted for a man accused by critics of failing to stop, or even tacitly encouraging, a spasm of Hindu-Muslim bloodshed in Gujarat in 2002. Modi has denied any wrongdoing and the Supreme Court has said there is not enough evidence to pursue investigations.
However, India's fragmented political landscape and first-past-the-post system in parliamentary polls makes results hard to predict, meaning a BJP victory is by no means assured.
Voting will be held in nine stages staggered between April 7 and May 12 to help security forces keep control. Violence, ballot-rigging and vote-buying have often marred past elections.
"Credible elections conducted at regular, prescribed intervals are the very soul, or hallmark, of any democratic system," election commissioner Sampath said, voicing concern at over-spending by candidates and parties.
The introduction of electronic voting and phased elections over the past decade have greatly decreased fraud on polling days, and India's elections are deemed largely free and fair. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a factbox, click on: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
"SCAM AFTER SCAM"
Since the last national election in 2009, about 100 million voters have joined the electoral rolls, in part reflecting India's growing population, half of which is aged under 25.
Many of the record number of first-time voters appear open to Modi's promises of job creation and efficient government.
"There was so much corruption with Congress, scam after scam," said Ravinder, a 19-year-old business administration student at a Modi rally in Uttar Pradesh state on Sunday.
"Now we see hope. There is someone talking about development, and he seems sincere."
Polls show the BJP well short of a majority of the 543 lower house seats at stake, but widening its lead over Congress, which has ruled India for more than two-thirds of the 67 years since independence, but which may now face its worst electoral defeat.
A multi-headed group of regional parties is also eyeing power, reflecting the growing clout of state-based leaders.
A "third-front" government made up of such diverse groups could prove unwieldy when it comes to running Asia's third-largest economy, whose growth has faltered due to the slow pace of reform on the Congress party's watch.
Leading the Congress party's campaign is Rahul Gandhi, scion of a dynasty that has given India three prime ministers and its most powerful contemporary politician, his mother, Sonia Gandhi.
But after two consecutive Congress-led governments headed by Prime Minister Manmohan Singh, India seems unlikely to make another Gandhi prime minister.
Economic growth is set to stay below five percent for the second year running, which would be the worst performance since the 1980s for a country that a few years ago was confident of matching China's run of double-digit expansion.
Modi has the backing of big business, which wants him to replicate his Gujarat state model of good roads, uninterrupted electricity and less red tape. Last week, he promised simpler laws and a trade-centred foreign policy, if elected.
As the election approaches, overseas investors have extended a buying streak of Indian shares, with purchases totalling $800 million in a run of 13 sessions until Tuesday.
But businesses have put investment plans on hold, worsening a slowdown that could, however, be reversed after the polls.
"Irrespective of who wins, pent-up demand is set to be released after the elections are over," HSBC said in a research note. "Companies that have shelved expansion plans will at some point start investing and hiring." (Additional reporting by Sruthi Gottipati and Malini Menon in New Delhi and Abhishek Vishnoi in Mumbai; Editing by John Chalmers, Raju Gopalakrishnan and Alistair Lyon)
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