That is the question on everyone's lips.

Andhra Pradesh Chief Minister Nara Chandrababu Naidu's confidence is strange considering that all the exit polls have given him the thumbs-down.

In fact, Naidu's confidence is on such a high that he has already embarked on preparations to form the next state government.

So what does Naidu have up his sleeve that pollsters haven't been able to figure out?

Official sources close to Naidu told rediff.com the chief minister is busy preparing a "special Telangana package" to appease the Telangana Rashtra Samithi led by his former comrade K Chandrasekhar Rao.

Exit polls say the TRS, which is in alliance with the Congress, is expected to give a black eye to the Telugu Desam Party in both the assembly and Lok Sabha elections.

Naidu's strategy, the sources revealed, hinged on breaking the TRS-Congress alliance and enticing KCR -- as Rao is known -- to support the TDP if it failed to get the required numbers in the 294-member state assembly.

The package Naidu is working on promises the most comprehensive economic development for the largely backward Telangana region. It is said to be prepared in consultation with two of India's best-known economists, and grants everything but separate statehood for Telangana.

Won't it be embarrassing for KCR to break the alliance with the Congress and join hands with Naidu after the election?

"Embarrassing? Not for Rao. We are all set to offer him a special Telangana package," a TDP source told rediff.com

TDP leaders say appeasing the TRS with a special package will happen only if the Naidu government fails to get a majority on its own.

The TDP leadership expects the TRS to win around 20 assembly seats from the Telangana region and play a decisive role in government formation.

But will KCR join hands with the Naidu government after fighting the election alongside the Congress?

"It is all humbug, Naidu has started these rumours. He is a gambler, and is making a new play," KCR told rediff.com

KCR says he expects a hung assembly in which the Congress may get 130 seats and the TDP-Bharatiya Janata Party alliance some 115 to 120 seats.

According to KCR's calculations, the TRS will bag 35 seats.

Despite KCR's denials, sources said Naidu is in touch with his former ministerial colleague to chalk out the post-election political arrangements. TDP leaders say even if the Naidu government loses the numbers game, it will be a Herculean task for the Congress leadership to put up an alternative because of infighting in the party.

The biggest hurdle for the Congress is that although it fought the election on a Telangana agenda, its front-runner for the chief minister's post is DR Y S Rajasekhar Reddy, a non-Telengana man.

A number of Congress leaders have been arguing that the chief ministerial candidate should also be from Telangana, a line backed by KCR. This should make Reddy's coronation difficult.

TDP leaders believe the Congress-TRS alliance will not last beyond the election results. "The chances are bright for Naidu to come back to power even if we lose the election," a TDP leader remarked.

Asked about this possibility, Andhra Pradesh Congress Committee chief D Srinivas said, "Our party does not believe in the 'use and ditch' policy. The Congress-TRS alliance is strong and will continue to be very strong after the election."

"I can assure you it will be a Congress government in Andhra Pradesh this time. A defeated TDP will not have the moral courage to even think about forming a government," Srinivas told rediff.com

Asked about the possibility of the TRS drifting into the TDP fold, senior TDP leader Yerran Naidu told rediff.com: "The question does not arise now, since our assessment says we will win a comfortable majority."

Image: Uday Kuckian