Fresh headaches for PM as corruption scam rages

NEW DELHI Fri Feb 11, 2011 11:39am IST

India's Prime Minister Manmohan Singh walks on stage for a photo opportunity as part of the 5th East Asia Summit in Hanoi October 30, 2010. REUTERS/Christophe Archambault/Pool/Files

India's Prime Minister Manmohan Singh walks on stage for a photo opportunity as part of the 5th East Asia Summit in Hanoi October 30, 2010.

Credit: Reuters/Christophe Archambault/Pool/Files

Related Topics

NEW DELHI (Reuters) - Prime Minister Manmohan Singh faces more political headaches after the Supreme Court pressed for deeper probes into a multi-billion dollar corruption case and a ruling coalition ally was implicated in the scandal.

Allegations the government may have lost up to $39 billion in revenues after firms were awarded telecoms deals at rock-bottom prices in return for kickbacks have rocked the ruling coalition and compounded the fragility of India's fragile investment climate.

The Supreme Court, increasingly assertive under its new chief justice, told the federal police agency to go after more company executives and politicians and set up a special court to investigate India's biggest graft case in decades.

One Indian company executive, a former telecoms minister and two other aides have been arrested in the scandal.

"They are part of a wider conspiracy," a Supreme Court bench was quoted on Friday by local media as saying.

"We have a large number of people who think themselves to be above the law. You must catch all of them. Merely because a person is in the Forbes list of millionaires and billionaires does not matter. Remember there is no parallel to this case."

The Supreme Court, along with an aggressive media buoyed by widespread voter anger at the scams, has kept investigations alive, halting any government attempts to stonewall probes and underlining a shift in power politics as India modernises.

A federal police lawyer told a court on Thursday that in one instance companies linked to the scam had paid $47 million to a TV channel run by the regional DMK party, which helps the ruling coalition maintain its slim majority in parliament in Delhi.

The latest revelations will further tarnish the image of Singh and his coalition. While the government will likely survive, the scandal has paralysed Singh's government, with the last parliamentary session closed due to opposition protests.

Asia's third largest economy may be booming, but there may be signs of cracks in its high growth model as years of complacency over reforms to open up the heavily-regulated financial sector, industry and invest in creaky infrastructure takes its toll.

Foreign direct investment has fallen for three consecutive years, from 2.9 percent of GDP in 2008/09 to around 1.8 percent of GDP in 2010/11. Some of this has to do with the global economic slowdown, but investor scepticism is also a factor.

One factor may be the 78-year-old prime minister. His decision-making appears to have been paralysed in his second term despite winning re-election with an increased majority.

The main opposition Bharatiya Janata Party has said Singh's reliance on the DMK prevented him from probing the telecoms case.

The government appeared close to agreeing to a broad, cross-party investigation in the scandal, paving the way for parliament to resume as normal for a Feb. 28 budget session.

But there were few signs the parliamentary session would lead to more reform bills.

(Editing by Paul de Bendern and Jonathan Thatcher)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
VKirpal wrote:
A Government,where the Prime Minister becomes a mere robot,inspite of his manifold positive attributes,can do no good to the nation.

The complete political system in our country has reached a nadir and,there does not seem to be any light,at the end of the tunnel.

Thanks to an independent and strong media in our country,many acts of ommission and cheating the nation,are coming into the limelight.

It appears that this corrupt virus has spread,in most avenues of life,leading to lack of credibility,in the economic growth and the political maturity of India.

Silence on the part of the leadership means agreement to what has been happening in the past-to drain the wealth of the nation,towards unproductive areas-in a sense “hijacking money” for personal/selfish gains.

WE can only hope and pray that good sense and values will prevail soon,to unfurl the right and courageous leadership,that the people of India now need.

There is a sense of pity when we observe the manner in which the Prime Minister is conducting himself-gone is the courage when he took a stand regarding the nuclear agreement with the USA.

An awakening is required,otherwise,our country could possibly be broken up into a number of smaller countries-something that existed a couple of ceturies ago.

Feb 12, 2011 3:03pm IST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Sri Lanka Landslide

Sri Lanka Landslide

No hope for survivors in Sri Lanka landslide, over 100 dead.  Full Article | Slideshow 

Logistics Potential

Logistics Potential

India's delivery men offer prize investment as billions pour into e-commerce.  Full Article 

Samsung Results

Samsung Results

Samsung seeks smartphone revamp to arrest profit slide.  Full Article 

Entertainment Buzz

Entertainment Buzz

Film-maker Shonali Bose hopes to take gay issues out of the closet.  Full Article 

Rising Star

Rising Star

Xiaomi moves into third place in global smartphone war.  Full Article 

Fighting Ebola

Fighting Ebola

Ebola appears to be slowing in Liberia - WHO.  Full Article 

End Of QE

End Of QE

Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage