Voting has opened in India's most populous state of Uttar Pradesh, in a contest seen as a key mid-term test for Prime Minister Narendra Modi and his economic reform policy.

Some 26 million people are expected to cast their ballots on Saturday as part of a seven-stage, one month-long voting process to elect a new state assembly.

Uttar Pradesh is home to an estimated 220 million people and polls in the state are typically a bellwether of national politics.

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The vote is widely seen as a referendum on Modi's controversial ban on high-value notes, a move aimed at combating tax evasion by the rich that has also hit poor rural communities hard.

The banknote ban, launched in November to purge the economy of untaxed income and the proceeds of crime and corruption, has disrupted daily life and commerce and caused the economy to slow.

On the campaign trail, Modi, who in 2014 swept the state in a landslide, said he had the interests of the poor at heart in making the move - the biggest gamble of his prime ministership.

A strong showing at the polls would strengthen his chances of a second term in 2019.

"The results will tell us whether Modi continues to enjoy unquestioned support or if it has started to erode," RK Mishra, an independent political analyst based in the state capital, Lucknow, told the Reuters news agency.

'Godzilla of states'

Modi's Bharatiya Janata Party (BJP) polled 42 percent of the vote in Uttar Pradesh in the 2014 general election, winning 71 out of 80 seats on its way to claiming India's biggest national mandate in three decades.

Yet, voters have shown growing impatience that Modi's campaign promises have failed to deliver new jobs to a state where per capita incomes average less than $750 a year.

Many communities in the state still lack access to power, clean water and basic medical services.

"It is the Godzilla of states," said BJP national spokesman Nalin Kohli.

People tend to vote along traditional caste and religious lines, and successive governments have exploited communal divisions to fire up their base and poach voters from opponents.

Pollsters say it will be tough for the BJP to repeat its general election performance in 2014.

The BJP is locked in a tough fight with the incumbent chief minister

Akhilesh Yadav from the regional Samajwadi Party, which has formed a political alliance with the country's main opposition Congress Party, led by Rahul Gandhi, scion of the Nehru-Gandhi dynasty.

The last phase of the Uttar Pradesh elections is scheduled for March 8, and results from the state, along with elections in Punjab, Goa, Uttarakhand and Manipur, are due on March 11.