Business | Thu Mar 17, 2011 2:09pm IST

BJP demands PM resignation over cash-for-votes scandal

NEW DELHI (Reuters) - The Bharatiya Janata Party (BJP) forced parliament to adjourn on Thursday and demanded Prime Minister Manmohan Singh resign over a WikiLeaks report that his party paid bribes to win a confidence vote in 2008, a fresh blow to the scandal-tainted coalition.

The Hindu newspaper, citing U.S. diplomatic cables released by WikiLeaks, said a ruling Congress party official told a U.S. diplomat they had a fund of 500-600 million rupees ($11-13 million) to pay off lawmakers in 2008.

The WikiLeaks report said the Congress official had showed the diplomat two chests of cash and said four lawmakers of a regional party had been paid 100 million rupees ($2.2 million) each to secure their support.

Analysts said the report was unlikely to affect the stability of the government, given the charges were old and that the new revelations could be written off as the personal perception of a diplomat that could not hold in a court of law.

But it added to the woes of a government already under fire for a slew of corruption cases, including a telecoms scam estimated to have cost the government billions of dollars.

"It is embarrassing for the government, but it is not that serious. Nobody is going to vote against the government on this," said D.H. Pai Panandikar, head of New Delhi-based think tank RPG Foundation.

The WikiLeaks report seemed to back earlier charges by the main opposition Bharatiya Janata Party (BJP) that the vote was bought, and adds pressure to Singh, reeling from the corruption charges against his administration.

BJP leader Sushma Swaraj said Singh's government had lost its legitimacy.

"This government has been under attack for the last three months, but this is a hammer blow that it cannot recover from," Swaraj said in parliament. "It has lost all moral responsibility to govern."

The speaker of the house was forced to suspend proceedings for the day after BJP lawmakers noisily demanded Singh resign.

OPPOSITION ON OFFENSIVE

The WikiLeaks report adds to a long list of scandals, led by charges the former Telecoms Minister A. Raja took bribes to dole out lucrative phone licences at rock bottom prices. That cost the state coffers as much as $39 billion in lost revenue, the government auditor has estimated.

Political protests over the scandals have led to economic reforms, such as opening up the supermarket sector for foreign investors and the deregulation of diesel prices, being put on the backburner.

"(The aide) mentioned money was not an issue at all, but the crucial thing was to ensure that those who took the money would vote for the government," the newspapers quoted from the cable.

Another Congress leader told the diplomat "PM Singh and others" had tried get a businessman to persuade a regional official to support the government, but had failed, the newspaper reported.

Finance Minister Pranab Mukherjee said the government could not confirm or deny the report. A spokeswoman of the U.S. embassy in New Delhi said they did not comment on classified material and could not comment on the report's authenticity.

Ahead of the vote in 2008, BJP lawmakers had brandished in parliament wads of currency notes they claimed Congress officials had given them to support the government.

The government narrowly won the vote, which was forced on it after Communists pulled their support due to a landmark civil nuclear cooperation deal between the United States and India.

Singh has been attacked by the opposition for appearing to pander to U.S. interests, and staked his political career on the landmark nuclear deal.

The report appears to have some inconsistencies. The four lawmakers whom the Hindu report said were paid bribes by the Congress official actually voted against the government. A committee set up to probe the charges in 2008 gave an inconclusive report.

(Editing by Alistair Scrutton and Miral Fahmy)

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