Tuesday, February 22, 2011

India - Govt has conceded a parliamentary inquiry into the 2G spectrum licence scam

[reuters]Indian Prime Minister Manmohan Singh gave in on Tuesday to opposition demands for a parliamentary probe into a multi-billion dollar scandal over sales of telecoms licenses for kickbacks, a setback for his embattled government and a victory for the opposition.

Singh, wary that a parliamentary probe could drag on for months and overshadow his Congress party-led coalition, only bowed to pressure after months of opposition protests stalled the last parliamentary session and threatened to block passage of the Feb. 28 budget.

"Our country can ill afford a situation when parliament is paralysed," Singh told parliament.

The Hindu newspaper on Tuesday called the scandal, in which the state auditor said up to $39 billion was lost in revenues, "the biggest scam in the history of independent India."

The government will likely stay in power, but is wary of a repeat of 1989 when Congress lost a general election due to the Bofors scandal over gun contracts involving associates of then Prime Minister Rajiv Gandhi who were accused of taking bribes.

The latest controversy has halted the progress of reform bills and worried some investors in Asia's third biggest economy. Concerns about security of contract, combined with the global slowdown, have hit foreign direct investment and contributed to the Mumbai stock exchange's recent performance, the worst of the world's major share markets.

India PM bows to opposition

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