IN EARLY SEPTEMBER, Mumbaiites are in the midst of the annual 10-day celebration of Lord Ganesh, a half-human, elephant-headed Hindu deity, reputedly the harbinger of wisdom and success, a sort of national lucky charm.

The streets of Mumbai -- or Bombay, as many English-speaking Indians still prefer to call the financial capital -- are decked out with bright lights. Every stall hawks small Ganesh statues, which are considered auspicious gifts. A shopkeeper throws in the cheaper variety with the silver bracelet I buy. "It will bring you good fortune," he says.

Not necessarily so. In the early morning of Sept. 5, an earthquake hits, registering 5.5 on the Richter scale, jolting me out of a restless sleep on the 21st floor of the luxurious Oberoi Hotel. I resolve to stay in low-rises for the rest of my stay in India. More alarming, the monsoon has brought the heaviest rains in a century and caused hundreds of deaths. The newspapers describe bloated corpses and poisonous snakes; flood survivors wade through chest-high water in eastern India searching for lost relatives and valuables. The season also brought a new kind of suffering -- a bitter dotcom shakeout and a battering of India's IT stocks riding Nasdaq's choppy wake.

But there's good news as well, especially for India's high-flying IT industry. In September, Goldman Sachs revised its projections for India upward, saying the country's IT industry will grow almost six times in the next five years. In addition, Internet use will grow four times faster than was earlier projected. Based on growth during the past year, previous estimates of 17 million Internet connections in India by 2003 have been jacked up to 70 million connections in the same period. The report also says India may corner 5 percent of an expected $585 billion in the global IT services market by 2004. That's up from 1.6 percent (or $5.7 billion). In 1998 fewer than half a dozen venture capital (VC) companies were in India; today there are more than 50. VC investments in India are expected to jump to $3 billion in the next 18 months, almost 10 times the $320 million that flowed into the country in 1999, according to the Indian Venture Capital Association.

Both local and foreign investors are inspired by the Silicon Valley successes of Indians such as Sabeer Bhatia, 41, who three years ago sold Hotmail.com to Microsoft for more than $400 million; Gururaj "Desh" Deshpande, 49, cofounder of Sycamore Networks (Forbes listed him as being worth $3.9 billion); and Rajendra Singh, 46, cofounder of Teligent. Indeed, India's far-flung IT billionaires are among the most aggressive investors eyeing Indian startups.

"[Nonresident Indians] are now showing a lot of interest in India because they think there's a lot of money to be made,'' says Azim Premji, chairman of Wipro, the homegrown computer services and software giant. "They're suddenly finding that the quality of investment and the return on investment in India are better

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