By Manoj Kumar
NEW DELHI (Reuters) - Sonia Gandhi, head of the ruling Congress party and India's most powerful politician, on Tuesday gave her first speech since undergoing surgery for an undisclosed illness as she rallied party workers behind her son ahead of crucial state elections.
The 64-year-old Gandhi appeared along with Prime Minister Manmohan Singh at a rally of the Youth Congress that was a clear backing of family scion Rahul Gandhi, widely seen as the party's
next prime ministerial candidate before a 2014 general election.
"The Congress has always been in the forefront, whether it was in the fight for freedom or in safeguarding the rights of the common people through its policies and institutions," Gandhi told 8,000 party workers in the capital.
Sonia Gandhi, heir to a family dynasty that has ruled India for most of the post-Independence era, spoke clearly and, while appearing to wear heavy make-up, she showed no obvious signs of suffering from cancer as has been widely reported in the media.
Her illness has raised speculation that she could soon hand over the reins of Congress to her son - a generational change that could transform Indian politics and possibly give a new lease of life to a beleaguered and corruption-tainted party.
The 41-year-old Rahul Gandhi has placed his political credentials on doing well in elections in Uttar Pradesh, a state of 200 million people that is likely to be key to the party's fortunes and whether it can return to power in federal elections in 2014.
SILENT ON RETAIL REFORM
In her speech, Gandhi made no mention of the controversy surrounding the government's decision last week to allow foreign retail giants to enter the country's supermarket sector - a move that has sparked opposition from the coalition's own allies and derailed moves to pass some key reform bills in parliament.
While Gandhi defended other policies, mainly social welfare programs, and attacked corruption, her silence on the retail sector jarred with Singh's own defense of one of his boldest reforms in years just minutes earlier at the same meeting.
Gandhi is further to the left than the reform-minded prime minister, and has been the driving force behind social welfare programs - including jobs and subsidies food for the poor - since the Congress-led coalition was first elected in 2004.
The retail reform is at odds the Congress party's image as a defender of the poor given widespread fears that millions of shopkeepers could lose their jobs to the likes of foreign retailers like Wal-Mart.
Tuesday's rally highlighted the difference between the two leaders, but did not mean there was any political rift.
On the one hand, Gandhi's failure to publicly defend the retail reform may have been dictated by electoral considerations, but her presence alongside the prime minister as he stood firm on the policy suggested it had her support.
"There has always been this difference between the two. He is regarded as pro-market and she is supposed to be following the old Nehruvian socialism," said Amulya Ganguli, a political analyst. "But I think the differences have been narrowed to a certain extent."
"She's probably not gung-ho about multi-brand retail, but I wouldn't read too much into her silence. He wouldn't have done it without some kind of approval, and backtracking would be disastrous."
Gandhi's illness has come as the coalition government has struggled to fend off corruption scandals that have plagued Singh's second term in office.
Her condition remains the subject of speculation.
India's media usually keeps a respectful distance from the personal life of the Gandhi family. But some reports said she was treated at New York's Sloan-Kettering Cancer Center.
Gandhi underwent successful surgery in August and devolved part of her responsibilities to Rahul, who was criticized for dithering during mass corruption protests at that time and, unusually, was jeered at a public appearance.
(Writing by Alistair Scrutton; Additional reporting by Matthias Williams; Editing by John Chalmers)