| NEW DELHI, March 6
NEW DELHI, March 6 India's embattled prime
minister on Sunday tried to patch things up with a key ally that
said it would quit his cabinet, aiming to avert another crisis
for a government shaken by a raft of corruption scandals.
The southern Dravida Munnetra Kazhagham (DMK) party, which
gave the Congress party-led coalition a slim majority in
parliament, said on Saturday it was pulling out its ministers
because of a dispute over seats to be contested in state
assembly elections next month.
Analysts, however, said the move was more likely linked to a
massive telecoms graft scandal that has implicated the DMK and
which has called into question Singh's ability to govern Asia's
third largest economy.
Congress Secretary-General Ghulam Nabi Azad was flying to
the southern city of Chennai to meet with leaders of the DMK to
try and resolve the crisis, a party official said.
The government is not under immediate threat of collapse
because the DMK ministers, who handle departments ranging from
textiles to chemicals and fertilisers, have yet to officially
tender their resignation and the party has said it would offer
But if the DMK were to quit, the government would become
more vulnerable to pressures from other coalition partners.
The ministers' withdrawal from the cabinet could complicate
the government's efforts to pass the 2011-12 federal budget
through parliament's current session. The government would fall
if its loses the budget vote.
The DMK's move would also make it harder for the government
to pass reform bills including a uniform sales and services tax,
a key peice of tax reform that will cut busines costs and boost
GRAFT, NOT ELECTIONS
Regulatory concerns, combined with the global economic
slowdown have hit foreign direct investment in India and
contributed to making the Mumbai stock exchange the worst
performing of the world's major share markets.
Singh's government is also under attack from the opposition
over its inability to tackle rising prices, especially food
inflation which, hit 18 percent in December, is among the
highest in Asia.
Singh must either depend on the DMK to support bills or seek
other alliance partners.
"The DMK's move to break the alliance is not about seat
sharing. It is about the investigation into the 2G scandal,"
said political commentator Cho Ramaswamy referring to the sale
of 2G mobile licenses.
The DMK, which said it was upset over a seat sharing plan in
its stronghold southern state of Tamil Nadu, is at the centre of
the $39 billion telecoms licensing scandal in which the former
telecoms minister A. Raja, a DMK member, faces possible charges.
Raja was sacked and is now in prison, but there is concern
that the federal investigation into the scandal may touch on
other top leaders of the DMK which is led by strongman
M.Karunanidhi and members of his family.
The scandal in which telecoms concessions were granted at
rock bottom prices has already been widened out to include a
probe into a TV channel linked to the DMK. .
"The alliance is wounded. The Congress and the DMK have
become a libility for themselves," said Arun Jaitly, a leader of
the main opposition Bharatiya Janata Party which has steadily
increased the pressure on Singh.
Singh has seen his unimpeachable reputation dashed following
the scandal, said to be independent India's biggest scam. Last
week he suffered another setback when the Supreme Court
rejected his appointment of a tainted civil servant as the head
of the country's main anti-graft agency.
(Editing by Miral Fahmy)
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