Sat, Feb 12, 2011 - Page 5 News List

More headaches for Singh as scandal imperils coalition

Reuters, NEW DELHI

Indian Prime Minister Manmohan Singh faces more political headaches after the Indian Supreme Court pressed for deeper probes into a multi-billion dollar corruption case and a ruling coalition ally was implicated in the scandal.

Allegations the government may have lost up to US$39 billion in revenues after firms were awarded telecoms deals at rock-bottom prices in return for kickbacks have rocked the ruling coalition and compounded the fragility of India’s fragile investment climate.

The Supreme Court, increasingly assertive under its new chief justice, told the federal police agency to go after more company executives and politicians and set up a special court to investigate India’s biggest graft case in decades.

One Indian company executive, a former telecoms minister and two other aides have been arrested in the scandal.

The Supreme Court, along with an aggressive media buoyed by widespread voter anger at the scams, has kept investigations alive, halting any government attempts to stonewall probes and underlining a shift in power politics as India modernizes.

A federal police lawyer told a court on Thursday that in one instance companies linked to the scam had paid US$47 million to a TV channel run by the regional DMK party, which helps the ruling coalition maintain its slim majority in parliament in New Delhi.

While the government will likely survive, the scandal has paralyzed Singh’s government, with the last parliamentary session closed because of opposition protests.

The main opposition Bharatiya Janata Party has said Singh’s reliance on the DMK prevented him from probing the telecoms case.

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