Indian politics is in a churn. Two-and-a-half years after Prime Minister Narendra Modi’s resounding victory, when it appeared that the opposition parties had been so bulldozed that they would not recover for a very long time, they are back with renewed confidence while Modi is looking and sounding defensive.

The threat is not so much to him or his government, but to his ambitious economic and political plans; the demonetisation fiasco has in any case made him wary of any more big ideas. If the electoral results do not go his way, even modest proposals will be put aside. All changes will now be incremental.

Already, to its supporters in the business community, this government is looking suspiciously like the Congress, with its push for welfare measures. They are also grumbling about high credit and low demand, and are seriously worried about the untrammelled powers of the tax authorities.

No businessman is happy about the state of the economy today. As always, the business community keeps quiet in public and complains in private. For some time, they continued living in hope that Modi would come up with investment and demand friendly measures, but after demonetisation, which hit their top-line and profits, that hope is gone. Now they just want to rebuild their businesses.

But they are also keeping a wary eye out on the political situation. The elections in Uttar Pradesh and Punjab are of course the most crucial, but even the local municipal elections in Mumbai and nine other towns in Maharashtra are not without significance. Add to that the turmoil in Tamil Nadu, which is yet to run its full course, and the elections in Gujarat later this year.

The general feeling seems to be that the Akhilesh Yadav-Rahul Gandhi combine will sail through in UP. Akhilesh has come out of the Yadav family spat looking good, and has successfully elevated himself from being a mere sectarian leader to a young and modern politician committed to development. The BJP, with its polarisation, anti-Congress rhetoric and tall promises sounds jaded; Akhilesh comes across as fresh. Mayawati is in the wings and she too could spring a surprise. True to form, the Yogi Adityanaths have upped the communal content of the campaign, but will that wash away the brutal memories of demonetisation?

If, despite these predictions, the BJP pulls through, it will be a miracle and boost the party’s confidence. If it comes second or worse, the party could face internal dissonance; questions will be asked about Amit Shah and his style of working.

In Punjab, the Shiromani Akali Dal has little or no chance, and its ally BJP will suffer too. If the Congress wins here, it will come as a shot in the arm for the beleaguered party. The Aam Aadmi Party cannot be dismissed either and a victory or even a very good performance would up its claims of being a key participant in national politics.

The municipal elections in Maharashtra are mainly – at least in the big cities – a fight between the BJP and the Shiv Sena. Both are out to cut the other down to size. A Sena win will almost surely mean significant political changes in the state – it could ask for many pounds of flesh by way of more cabinet berths or, bolstered by its victory, even pull out of the state government and take its chances in a mid-term election. Sharad Pawar, as is his wont, has poured oil on troubled waters by saying his party will not support the BJP in the event of reduced numbers.

The BJP has also got its finger in the Tamil Nadu pie. With Sasikala out of the way, it can hope to influence the new chief minister, and at least get support where it counts – the Rajya Sabha. But the strong Dravida sentiment will ensure that the AIADMK and DMK close their ranks and resist any attempt by a north Indian, Hindi speaking party from setting up base in Tamil Nadu.

All of these political threads point towards a potential perfect storm against the government at the Centre. None of this may come to pass and the BJP may pull off unlikely wins or coalitions everywhere, but the odds are weighed against it. Going by the ratcheting up of attempts to polarise in UP, the BJP knows it too.

A failure to win key elections will have three potential outcomes. In the immediate term, there will be an impact on the mid-year election of the new president after Pranab Mukherjee’s term expires on July 24, 2017. The NDA does not have the requisite numbers in the electoral college and needs the support of the non-NDA, non-UPA parties, which would back Modi if the BJP is fresh out of a victory in UP and elsewhere. A loss will undoubtedly decrease his clout and the combined opposition – and silent dissidents within the NDA – could thwart his plans.

Secondly, opposition parties, encouraged by the BJP’s loss, will once again begin to look for ways to come together. This is, of course, easier said than done, given the conflicting aims and claims, but the Bihar and UP coalitions show that it is possible. If various parties, in their own self-interest, agree to align behind one leader, a credible platform could emerge. The BJP will certainly not want this to happen.

But the biggest question is, what bearing will an electoral loss have on the BJP itself? Modi’s position remains unassailable, but will Shah be safe? Will he be able to call the shots, no questions asked? Or will his detractors and critics and those whom he has sidelined go after him?

Modi and his party are already planning for the 2019 general elections. Every decision will be taken keeping the political impact on the BJP in mind. The leitmotif of this regime has been shock and awe announcements – many of them turn out to be flops. The government will try and avoid them. Winning outright, or even emerging as the single largest party in UP is not that far-fetched. Modi has pulled off many impossible situations. But the numbers will matter. And a loss in the biggest state, even as the next general elections come closer, is, for him, a troubling prospect to contemplate.