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INDIA. Referendum on a dynasty.

THE local stadium was packed beyond capacity. People sat on nearby rooftops or hung precariously from trees. It was the first day of India's election campaign and Prime Minister Rajiv Gandhi had traveled to this poor and backward town of 103,000 to inaugurate his drive for election.

Bulandshahr lies in India's heartland, the critically important ''Hindi belt'' which envelops the Ganges River and the country's northern plains. It is the bellwether of the nation - its six states holding 220 of the country's 544 parliamentary seats, some 40 percent.

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The Hindi belt has decided the outcome of all of India's seven national elections. And there is little question that it will also decide the eighth - Dec. 24, 27, and 28 - in this vast and complex nation, the world's largest democracy.

The crowd greeting Mr. Gandhi at Bulandshahr on Dec. 1 was estimated at 50, 000. A number of people said they had come because local Congress (I) Party officials had told them the newly installed prime minister would be accompanied by Bombay's cinema cult figure, Amitabh Bachchan, who is running for Parliament in Allahabad, Uttar Pradesh. Others came to see the prime minister's helicopter land in a swirl of dust at a makeshift landing pad on the stadium's grounds. Still others came because it was Saturday (a half-day of work), or at least that's what they said.

Electorally, Uttar Pradesh is India's most important state. It has 85 seats in Parliament, the largest number of seats allotted to any of India's 22 states. Its 62 million voters have been as fickle as a pre-monsoon cloud.

In the last election, in 1980, Uttar Pradesh voters gave the ruling Congress (I) Party 51 seats; in the 1971 elections, 73 seats. But in 1977, when Prime Minister Indira Gandhi called snap elections to justify her 21-month period of emergency rule, Uttar Pradesh's poor religious minorities and Hinduism's Scheduled Castes (depressed classes) rebelled against her near dictatorial rule. For the first time in India's history, Uttar Pradesh gave the Congress Party no seats at all.

Uttar Pradesh is a swirling kaleidoscope of the best, and worst, of India's awesome experiment in mass democracy.

The fourth-largest state in India, it is the country's most populous - squeezing 110.8 million people into 113,672 square miles. The per-capita gross national product is only $131, half the national average. Illiteracy is at 73 percent, and its people are as much a demographic mosaic as are its sparsely cultivated fields. There are Jat farmers and Rajputs, upper-caste Hindu Brahmans and lower-caste Gujars. There are Muslims - who account for 15.5 percent of the state's population - and Scheduled Castes.

Uttar Pradesh's brightly painted mosques and temples, water buffalo auctions, and the plethora of weddings now that the cash crops are in - all are as cherished to the residents of Bulandshahr as is the concept of dynastic politics.

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Wrote the prestigious Times of India two years ago: ''Indians need an emperor or empress. They need the reassurance of knowing who their rulers will be.''

Thus, here in Uttar Pradesh, Rajiv Gandhi is being challenged by his estranged sister-in-law, Maneka, for his parliamentary seat in the town of Amethi. With the exception of Bharatiya Janata Party leader Atal Behari Vajpayee , India's national party leaders, two general-secretaries, and both the present and former prime ministers are all standing for election in this state. Also running are film idols, Indian ''mafia'' leaders, and dacoits (robbers from organized gangs), scions of former princely families.

Each has a well-known name. And, of little import to the voters, most have had little of substance to say.

In the Indian political arena, gestures are more important than programs; issues are secondary to flamboyance and style. Feudal landlords control entire constituencies in the six states of the Hindi belt - Uttar Pradesh, Madhya Pradesh, Haryana, Bihar, Himachal Pradesh, and Rajasthan.

The Congress (I) Party, hoping for a massive outpouring of sympathy for the inexperienced son of the assassinated Indira Gandhi, is seeking a simple vote of confidence in the Nehru-Gandhi dynasty.

Twenty million posters of the slain prime minister call out from the country's railway stations, lampposts, and every conceivable wall. Printed is her last message, from a speech in Orissa State on Oct. 30, the day before she died: ''If I die today every drop of my blood will invigorate the nation.'' Next to a poster here in Bulandshahr are smaller posters of Rajiv Gandhi and of Amitabh Bachchan, the larger-than-life film star.

Other than the sympathy factor, the Congress (I) is running on a platform of national unity - that only it can ''save the nation'' from a host of unnamed ''foreign and domestic threats.''

Violence and the exchange of money have always accompanied Indian campaigns. This is why the elections are being scattered over three days: to enable security forces to police the polling booths. Here in Uttar Pradesh, Ram Lal, a local party leader, said that party workers should have guns.

The question of security has become particularly acute during this campaign, as there are fears for Rajiv Gandhi's personal safety. If Mr. Gandhi were to be killed now, Indian democracy would face an even greater challenge than it did when his mother was killed. There is no clear successor, either within or outside the party.

During the campaign, the Congress (I) has charged that the opposition is unable to run the country and that it lacks an ideology.

One is hard pressed to dispute the latter charge. Only twice since independence in 1947 has India been ruled by anyone other than a member of the Gandhi-Nehru house. The first exception was Lal Bahadur Shastri, who served as prime minister from 1964 to 1966. The second break came in 1977 when, as a reaction to Mrs. Gandhi's emergency rule, the opposition swept to power, capturing 295 seats in Parliament with 41.3 percent of the vote. Never in an Indian election has any party captured a majority of the vote.

But after two years of a five-year term, the Janata coalition fell apart because of the quarrels of its leaders.

Today, the opposition parties are led by the same men. One of the overriding weaknesses of India's democratic system is that it has never been able to spawn a viable two-party system or an opposition of credibility or strength. Perhaps this is the result of the overriding stature of Jawaharlal Nehru, who was independent India's first prime minister, then of his daughter, Indira Gandhi, and now, perhaps, of her son.

Except for the leaders of the two communist parties, all of the opposition leaders are former Congressmen. They had been split from or were kicked out of the grand old Indian National Congress, far more over personality differences than ideology.

''I don't think that (having a strong opposition party) makes a difference,'' Mrs. Gandhi told the Monitor in a 1982 interview. ''Because democracy is not whether there is an opposition or not, but whether the people can express their views.''

Despite all of the odds against the voters, they have continued to do this. For India's democratic system is steeped in tradition and Indian national pride.

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