Pawan Bansal, Ashwani Kumar quit government

NEW DELHI Sat May 11, 2013 12:09am IST

1 of 2. Railway Minister Pawan Kumar Bansal (C) arrives to present the annual budget for the country's railway system, at the parliament in New Delhi February 26, 2013.

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NEW DELHI (Reuters) - Scandal-hit Railway Minister Pawan Kumar Bansal and Law Minister Ashwani Kumar quit on Friday, adding to speculation the prime minister may have to call an early election after the furore paralysed parliament and forced the delay of economic reforms.

Bansal had been widely expected to step down after police arrested his nephew on suspicion of accepting a bribe in a case that was seen as embarrassing to the Congress party-led government, which has been battered by a series of corruption scandals.

Kumar's departure comes days after the Supreme Court said the government substantially changed a report by the Central Bureau of Investigation (CBI) into alleged irregularities in the awarding of mining rights potentially worth billions of dollars to private companies.

They met Prime Minister Manmohan Singh late Friday and submitted their resignations, ruling Congress party spokesman Bhakta Charan Das told Reuters.

The main opposition Bharatiya Janata Party (BJP) has also demanded Singh's resignation, but stopped short of calling a no-confidence motion in parliament to bring down the government.

However, the opposition clamour for the resignations proved so disruptive that parliament was adjourned on Wednesday until further notice, two days ahead of its scheduled close, as it became impossible to carry out meaningful legislative business.

The government has had to postpone economic legislation and a flagship programme to give cheap food to 70 percent of the population.

DISARRAY

"The resignation of the two ministers shows that our demand for their resignation was justified and the government was unnecessarily adamant," BJP leader Sushma Swaraj wrote on Twitter.

"If they had accepted our demand for their resignations earlier, the parliament session could go on."

Led by octogenarian economist Singh, India's minority coalition government has been unsteady since two key allies pulled out and the resignations will add to speculation over whether Singh will call an election before May 2014.

The so-called Coalgate mining rights scandal has become one of the biggest headaches for Singh, who was coal minister when some of the blocks were awarded.

Bansal was appointed amid much fanfare last year to turn around the ailing Indian Railways, becoming the first railway minister from the Congress party since 1996 and the first to raise passenger fares in nine years.

However, his resignation seemed inevitable after his nephew, Vijay Singla, was arrested last week on suspicion of accepting a $160,000 bribe to arrange the promotion of a railways official. Singla has said he is innocent of the charges.

Bansal has denied any wrongdoing and is yet to be questioned by police. Indian media said the police were investigating how much Bansal knew about his nephew's activities.

Despite the seemingly endless stream of corruption scandals and setbacks, the Congress party is still hopeful of winning a third term in office.

The Hindu nationalist BJP is in disarray and has lost control of four state governments in the past year - most recently its only southern stronghold Karnataka - where Congress swept to victory on Wednesday.

(Additional reporting by Satarupa Bhattacharjya; Editing by Ross Colvin and Alison Williams)

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