Mr Vajpayee is riding high after this week's talks in Pakistan

Members of the Bharatiya Janata Party (BJP)-led coalition were meeting in the capital Delhi shortly after a range of tax cuts were announced.

Analysts say the BJP is upbeat after successful talks with Pakistan, state elections and a booming economy.

Observers believe the elections will be held in April or May.

They must be held by October at the latest.

'Authorised'

"There was no reservation on preponing [bringing forward] the elections," Defence Minister George Fernandes told journalists after the Delhi meeting.

"The meeting authorised the prime minister to take whatever decision he deems fit in so far as the forthcoming general elections are concerned."

BJP election flags during December's successful elections

Hours before the meeting started, the fnance ministry announced a range of tax cuts being seen by many observers as an attempt to woo the electorate before the general election.

The cuts cover household goods, medicines, electronic items and income tax returns.

The measures include:

• Import duties slashed by nearly 50%

• Employees with an annual income of up to 150,000 rupees exempted from filing income tax returns

• The 15% tax on domestic airfares cut

• Excise duty on computers and cell phones halved

• Duty on life saving drugs and other medical equipment has been reduced to 5%

Timing

"That elections should be held soon has almost been decided. The party rank and file want to cash in on the feel-good factor," the BJP's JP Mathur said earlier on Thursday.

On Sunday Prime Minister Vajpayee will lead a two-day conclave of senior party leaders of the BJP in the southern Hyderabad city to discuss the timing of the general elections.

Analysts say the BJP, which leads a coalition of 22 parties in the 545-seat parliament, was first tempted to bring the general elections ahead after it swept to victory in three out of four state elections in December.

In all these states, the party defeated the main opposition Congress party.

The economic growth, which soared to 8.4% in the last quarter of 2002, helped by good rains, is also motivating the party to call an early poll.

The warming of ties between Pakistan and India after the recent talks between Mr Vajpayee and Pakistani President Pervez Musharraf "will help the BJP in the forthcoming general elections," says a senior BJP leader.

To call the election, the ruling government would need to dissolve the parliament and let the independent Election Commission to decide the date.

Although the state polls witnessed a straight fight between the BJP and the Congress, correspondents say the national polls will be very different, given the presence of many regional players.

The BJP is also in disarray in India's largest state, Uttar Pradesh, which plays a big role in determining who controls government at the national level.