India opposition stand may jolt reforms moves
Thursday, 31 July 2008

NEW DELHI, Tue Jul 29, (bdnews24.com/Reuters) - India's main opposition said on Tuesday it would try to block parliamentary approval for key economic reforms like privatisations after the government won a confidence vote marred by bribery charges last week.

Although its own economic agenda did not vastly differ from the pro-reforms Congress party-led government, the Hindu nationalist led opposition coalition said the government did not have the "moral authority" to push through any major decisions after the "tainted" confidence vote.

Emboldened by winning the parliamentary vote, during which opposition lawmakers flashed wads of cash they said were offered as bribe to abstain, India's government was expected to revive some privatisations.

An intransigent opposition coalition will now be a major headwind for any efforts to open up the economy, analysts say.

"Let a new government come and they can discuss new economic reforms," Mukhtar Abbas Naqvi, a leader of the Hindu-nationalist Bharatiya Janata Party that heads the opposition coalition told Reuters.

"The government won the vote through questionable means. They have no moral authority now."

The government of Prime Minister Manmohan Singh won the confidence motion by 19 votes, a bigger margin than expected, after several opposition lawmakers voted for it or abstained. The vote was held after the government's communist allies withdrew support to protest against a nuclear deal with the United States.

While the government enjoys a slender majority in the lower chamber of parliament, it is in minority in the less-powerful upper chamber. Most bills have to be ratified by both chambers of parliament.

"It will be all about floor management because the government will have to prove majority everytime a bill is put to vote," D.H. Pai Panandikar of private think-tank, RPG Foundation, said.

Singh, held back from initiating a reforms barrage for the better part of his four-year-tenure by his former communist allies, has little time for major action now.

Economists say the government's top priority will be to bring inflation down before national elections due in 2009, meaning the reforms may take second place on the agenda.

Analysts say the government would like to move ahead with reforms in insurance, retail, bank, pension and privatisation of state-run firms.

A slew of bills, including on banking and pension fund remain stalled which the government would like to introduce in parliament when it convenes on Aug, 11.

"They can hope for no support from us," Naqvi said. "We will stall every move."

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