India’s Opposition BJP Dumps President Gadkari Amid Probe

India’s main opposition party, the Bharatiya Janata Party, unexpectedly dumped its president Nitin Gadkari less than 15 months before federal elections after graft allegations thwarted his attempts to win a second term.

Gadkari resigned late last night after the income tax department continued with its investigations into companies he founded. Rajnath Singh, who was BJP president between 2006 and 2009, will take charge of the party, replacing Gadkari.

“I have committed no wrong or any impropriety either directly or indirectly,” Gadkari said in a statement. The “government has been making an effort to spread disinformation about me in order to hurt me and my party,” he said yesterday.

The income tax investigation into Gadkari’s companies blunts the BJP’s ability to target Prime Minister Manmohan Singh’s ruling coalition over a series of high-profile graft scandals that have dented the popularity of his government. Gadkari’s resignation comes amid jockeying by BJP leaders to be its candidate for prime minister in an election that must be held by May 2014.

Income tax officials are conducting investigations at eight different locations at companies linked to the Purti Group, which is owned by Gadkari, NDTV television channel reported, without saying where it got the information. The income tax department is investigating the companies’ financial records and its investors, the television channel said.

Retail FDI

Singh, who will take charge of the party, is a former chief minister of Uttar Pradesh, India’s most populous state. During Singh’s last tenure as president that ended in 2009, the BJP were routed in elections suffering their heaviest election defeat in two decades.

The Hindu-nationalist BJP, the Congress party’s chief rival, is divided over who should lead the party into the next elections and in what direction. While it supported greater role for foreign investment in the economy when it headed the government between 1998 and 2004, the party has repeatedly opposed attempts by the present administration to allow overseas investment in areas such as retail.

A poll published in August by Nielsen Holdings NV (NLSN) and India Today magazine forecast that a BJP-led bloc would wrest power away from Congress at the next election. According to the survey, Singh’s coalition will win 181 seats, 78 fewer than it secured in the May 2009 election, while the BJP bloc of parties may win as many as 205.

Indian opinion polls routinely face sampling difficulties that can affect their accuracy, such as the make-up of the electorate that includes diverse castes, regional and linguistic groups.

To contact the reporter on this story: Andrew Macaskill in New Delhi at amacaskill@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.