Confidence vote in Indian government despite scandal and financial woes

Confidence vote in Indian government despite scandal and financial woes

In a surprise victory, PM Singh’s government edges the opposition, 246 votes to 162.

April 28, 2010 9:03 by Katherine Azmeh

India’s Congress-led government won a key confidence vote in parliament on Tuesday by a stronger-than-expected 84 votes despite the coalition suffering problems from high inflation to a cricket scandal.

Prime Minister Manmohan Singh’s government was backed by 246 lawmakers in the 545-strong lower house. The opposition managed 162 votes against.

The vote was the first of the many demanded on Tuesday demanded by parties against an unpopular hike in fuel and fertilizer prices which they said hurt the poor, but which the government deems necessary to cut its fiscal deficit from a 16-year high of 6.9 percent.

The strong government showing may boost efforts to pass key bills. Financial markets have largely ignored the parliamentary row, anticipating no threat to the government.

Outside parliament, the communists and their allies shut down shops, offices, trains and airports in several states as they tried to enforce a dawn-to-dusk strike protesting inflation that is running at a 17-month high of 9.9 percent.

The strong government showing may boost efforts to pass key bills. Financial markets have largely ignored the parliamentary row, anticipating no threat to the government.

In the run-up to the vote, the government appeared shaky and deferred crucial legislation, with two allies withdrawing support over a bill to reserve legislative seats for women and others expressed disquiet over issues like high prices.

The government has already been forced to put on hold a bill to cap liability of operators in case of a nuclear accident, crucial for firms like General Electric and Westinghouse Electric to enter India’s $150 billion civil nuclear sector.

Other delayed bills included those to allow greater foreign stakes in pension and insurance, or to permit foreign universities to set up local campuses.

Government officials and analysts say these changes are needed for India to overhaul its creaky infrastructure and increase its trained workforce, key to achieving consistent double-digit growth rates like in peer China.

The demand for the vote on Tuesday was sparked by the government’s decision in February to raise petrol prices by 6 percent and diesel by 7.75 percent, angering opposition parties.

The opposition parties are also against a decision to free prices of most fertilizers, a move the government took in February to help reduce its subsidy bill.

–Arabnews