India Prime Minister bows to opposition pressure on graft probe

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 February 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.
Parliament may now be open, but investors doubt their wish list of modernising laws will be passed. Even before the latest scandal, the prime minister was on go-slow with reforms seen as helping India compete with the likes of China. Singh, accused by the opposition of allowing corruption to go unheeded during his seven year rule, even within his cabinet, now faces two battle fronts - the parliamentary probe and an ongoing police investigation.
The federal police have arrested his former telecoms minister and questioned some of India's most powerful businessmen, including billionaire telecoms tycoon Anil Ambani, owner of No 2 mobile carrier Reliance Communications. Pushed on by a newly assertive Supreme Court, the police have until Mar. 31 to issue charge sheets. What is unclear is whether this probe will end in catharsis for a globalising India that shows itself capable of rooting out corruption, or whether it will end in bitter acrimony and mudslinging with little progress in the probe.