Singh’s Resignation Sought by Indian Opposition Parties

Photographer: Sajjad Hissain/AFP/Getty Images

Members of the Bharatiya Janata Yuva Morcha (BJYM), the student wing of the opposition Bharatiya Janata Party (BJP), shout slogans during a protest near the Indian prime minister Manmohan Singh's residence in New Delhi on May 12, 2013. Close

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Photographer: Sajjad Hissain/AFP/Getty Images

Members of the Bharatiya Janata Yuva Morcha (BJYM), the student wing of the opposition Bharatiya Janata Party (BJP), shout slogans during a protest near the Indian prime minister Manmohan Singh's residence in New Delhi on May 12, 2013.

India’s main opposition party stepped up pressure on Prime Minister Manmohan Singh to resign, with protests outside his home after he sought to end a political crisis by firing two ministers over graft allegations.

Singh’s government, weakened by corruption scandals and a stalled legislative agenda, suffered fresh embarrassment when the law and railways ministers were forced to quit on May 10 amid graft probes by the nation’s Central Bureau of Investigation. The Bharatiya Janata Party, which lost power to the Congress party in 2004, said Singh has no authority left to govern.

The exit of the two Cabinet members is the latest blow to Singh, 80, whose government has been roiled by persistent corruption allegations in his second term as he struggles to revive an economy expanding at the slowest pace in a decade. Over the last four years, six cabinet ministers have resigned after being accused in corruption cases, with the opposition parties claiming this is the most graft-ridden government in India’s history.

“Singh’s reputation has certainly been damaged over this episode,” said D.H. Pai Panandiker, president of the RPG Foundation, a New Delhi-based economic research group. “His reputation for personal integrity is well established, but there is an impression he tolerates others being corrupt.”

Photographer: Sean Gallup/Getty Images

Indian Prime Minister Manmohan Singh was in charge of the coal ministry for part of the period under investigation and has been blamed by opposition parties for irregularities. Close

Indian Prime Minister Manmohan Singh was in charge of the coal ministry for part of the... Read More

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Photographer: Sean Gallup/Getty Images

Indian Prime Minister Manmohan Singh was in charge of the coal ministry for part of the period under investigation and has been blamed by opposition parties for irregularities.

Bribe for Job

Congress party chief Sonia Gandhi forced Singh to seek the exit of the two ministers from his council, the Indian Express reported on May 11. While Singh hasn’t commented, the president’s office issued a brief statement the same day saying on Singh’s advice, President Pranab Mukherjee accepted the resignations.

Rail minister Pawan Kumar Bansal resigned after the CBI earlier this month arrested a member of his family on charges he accepted money to help secure an official a top post in the rail department. Law minister Ashwani Kumar quit after the CBI told India’s top court last month that he was among officials who vetted a probe report on allocation of coal mines and altered its contents. Both men deny any wrongdoing.

Singh was in charge of the coal ministry for part of the period under investigation and has been blamed by opposition parties for irregularities.

India’s Supreme Court criticized the CBI and the government on May 8 for making changes to the report. It said the CBI has become a “caged parrot and it has many masters” as it directed the government to make it independent.

‘Question Mark’

“The question is not of one or two ministers, whatever has been going on has put a question mark on the whole administration,” the BJP President Rajnath Singh told reporters May 11. “If the prime minister introspects, there is no option but to resign.”

Protesters clashed with the police outside the prime minister’s official residence yesterday, prompting the police to use water cannons to disperse hundreds of members of the youth wing of the BJP. Television footage showed people burning an effigy of Singh and arrests being made by the police.

The exit of the two ministers won’t sway the financial markets in Mumbai though investors would want to know if Singh will last his term, said U.R. Bhat, director at Dalton Capital Advisors India Pvt.

PM’s Doorstep

The benchmark S&P BSE Sensex index slipped 0.6 percent as of 10:54 a.m. in Mumbai, trimming gains in the past month to 9.6 percent. It closed at a 28-month high on May 11 after a special trading session. The rupee weakened 0.1 percent to 54.875 a dollar.

“What could cause a problem is that it finally may reach the prime minister’s doorstep,” said Mumbai-based Bhat. “The way the government is going, it may not last the full term. Their moral authority to govern is diluted and we don’t know how long the edifice can withstand the pressure.”

The government in September began opening up industries including aviation and retailing to foreigners and cut taxes on investors buying bonds to encourage inflows as estimates by the statistics office showed the $1.8 trillion economy expanded 5 percent in the year to March 31, the least since 2003.

Singh is planning a Cabinet reshuffle this week, CNN-IBN television channel reported on May 11. Until then, road minister C.P. Joshi will handle the rail portfolio, while telecommunications minister Kapil Sibal will oversee law.

Accused by political opponents of being weak and indecisive, Singh has come under criticism for his initial reluctance to dismiss the ministers after the alleged scandals emerged. India’s parliament ended its budget session two days earlier than scheduled last week as opposition parties stalled proceedings, demanding the resignation of the two men.

Early Elections

The ruling Congress party may be trying to show that it is getting tough on graft to help build on the momentum after it swept to power in the southern state of Karnataka this month, routing the BJP that had faced its own share of scandals locally, said N. Bhaskara Rao, chairman of Center for Media Studies.

The decision to fire the ministers may be because Congress “want to show they are doing something about corruption and more effective governance,” New Delhi-based Rao said. “They are exploring the possibility of early elections.”

The BJP, which ruled Karnataka for the past five years, became embroiled in a $3.6 billion illegal mining scam where companies were accused by the state’s anti-corruption ombudsman of operating without permits and evading taxes. Chief Minister B.S. Yeddyurappa was named in the probe and forced to step down.

Those revelations have rendered BJP’s campaign against Congress corruption hollow as the nation faces polls.

Opinion Poll

Andimuthu Raja resigned in 2010 as telecommunications minister after being accused by the country’s chief auditor of favoring certain companies in the awarding of mobile-phone licenses in a move that may have cost the exchequer $31 billion. He is on trial and denies any wrongdoing.

Singh’s ruling coalition would lose an election, which must be held by May 2014, according to an opinion poll published last month, while the chief opposition alliance is on course to make only marginal gains.

The current political mood in India means regional parties such as the Samajwadi Party that rules Uttar Pradesh, Mamata Banerjee’s Trinamool Congress and the All India Anna Dravida Munnetra Kazhagam in power in southern Tamil Nadu province are gaining in strength, the C-voter survey for the Times Now TV channel found.

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

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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