Prime Minister Manmohan Singh failedto win passage of his anti-corruption bill as an uproar brokeout in India��s upper house of parliament, capping a year ofsetbacks that stirred concern over a wrecked economic agenda.
Proceedings were adjourned late yesterday after a lawmakersnatched papers from a minister and flung them across thechamber. The leader of the main opposition Bharatiya JanataParty in the upper house, Arun Jaitley, accused the governmentof scripting the disturbance as it realized it was unable to wina vote on the measure that would create a graft-fighting agency.
The rebuff is the latest disappointment for Singh, 79,whose championing of free-market policies two decades ago helpedIndia become the second-fastest growing major economy.Allegations of corruption in his cabinet triggered mass proteststhis year, while a failure to contain inflation and a reversalon foreign investment in the retail industry sapped confidencein his administration.
��This is an annus horribilis for the government and theworst thing about it is that the problems are of their ownmaking,�� said Samir Arora, founder of Singapore-based hedgefund Helios Capital Management Pte, referring to the rulingCongress party��s failure to bring along its allies. ��Thegovernment is in complete disarray,�� Arora, who focuses oninvestments in India, said.
Parliamentary Affairs Minister Pawan Kumar Bansal said moretime was needed to consider 187 amendments to the bill that wereproposed by both opposition parties and allies of thegovernment. The bill passed in the lower house on Dec. 27.
��Running Away��
��The government is running away from the house because itis in a hopeless minority,�� Jaitley said. ��A government whichdid not have the numbers in the house has consciouslychoreographed�� events so as to avoid a vote, he said.
A spokesman for Singh��s Congress party, Janardan Dwivedi,denied Jaitley��s accusations and said the government��s rivalshadn��t been serious about wanting to ! pass a b ill to countergraft. ��There was a problem of a time limit,�� he said. ��Hadthe opposition cooperated, the bill could have been passed.��The winter session of parliament had been extended by three daysuntil Dec. 29 to allow for debates on the so-called Lokpal bill.
The setback may reinvigorate demonstrations led by anti-corruption campaigner Anna Hazare, who called off his latestfast to demand tough anti-corruption laws a day early on Dec. 28after finding fewer supporters than he attracted for an earliereffort this year.
Ally Anger
Hazare, 73, grabbed headlines in August with a 13-dayhunger strike that prompted Singh��s government to agree toconsider many of the demands presented by activists.
Proposals for a corruption ombudsman have been introducedto parliament nine times since 1968 without being passed. Thegovernment, which is 28 seats short of a majority in the upperhouse, failed to win the support of one of its largestparliamentary allies, the Trinamool Congress.
��This is a shameful day for India��s democracy,�� saidDerek O��Brien, a Trinamool upper house lawmaker, adding hisparty couldn��t back the bill because it infringed on states��autonomy. ��The government handled this situation very badly.��
The failure to pass the Lokpal bill is symbolic of a yearduring which Singh��s administration has been unable to clinchparliamentary support for promised policies to overhaul ajustice system clogged with millions of cases, change rules onhow farmland is acquired for factories and protect officials whoexpose fraud.
Singh Silent
All are backed up in a legislature that this year passedjust 22 laws, the second-fewest since 1952, according to the NewDelhi-based PRS Legislative Research.
Singh, who was in the chamber, made no statement and therewas no indication whether parliament will meet before its nextsession scheduled to begin in February. The prime minister��sefforts were undone in part by opposition from his party��sallies, an echo of wh! at happe ned to his proposal to let foreigncompanies buy majority stakes in Indian retailers.
That move, suspended Dec. 7, would have let in companiesincluding Wal-Mart Stores Inc., with the aim of helping overhaula national distribution system whose inefficiencies see 40percent of fruit and vegetables rot before they can be sold.Singh said in an interview this month that he plans to revivethe measure after regional elections early next year.
Bureaucracy Slashed
The prime minister��s record of attempts to unshackle theeconomy from regulation, bureaucracy and corruption date back tohis tenure as finance minister in the early 1990s, when hedismantled government monopolies, cut import tariffs andwelcomed foreign investment.
Corruption is an emotional issue in India, where at least12 whistle-blowers were killed and 40 assaulted after seekinginformation under a new Right to Information Act aimed atexposing local graft, according to data compiled by Bloombergfrom January 2010 through mid-October 2011. Enacted by Singh sixyears ago, the legislation became the most powerful tool forfighting wrongdoing in politics and business, with 529,000requests filed in the year through March.
With the legislation to set up the federal anti-graftagency, Singh failed to overcome resistance from his allies,opposition parties and social activists. The debate became themost divisive political issue since his government came closebeing toppled in 2008 over a civil nuclear accord with the U.S.
State Polls
The ruling Congress party faces state elections fromJanuary, including one in Uttar Pradesh, home to a sixth of allIndians. The polls will offer an indication of the government��ssupport two years before national elections are due.
Economic growth is slowing after the central bank raisedinterest rates by a record pace in its effort to tame thefastest inflation among BRIC nations, which include Brazil,Russia and China. India��s economy grew 6.9 percent in the threemonths through Se! ptember, the weakest since the second quarterof 2009.
The central bank��s campaign has had little impact, with thebenchmark wholesale price index climbing 9.1 percent in Novemberfrom a year before, compared with the 9.5 percent pace at thestart of this year. By comparison, China��s inflation rate was4.2 percent in November.
The rupee has weakened about 16 percent against the dollarthis year, Asia��s worst performer, as an exodus by investorssent the Sensex index of stocks down 23 percent, more than the18 percent drop in the MSCI Asia Pacific Index.
Telecoms Sale
Opposition to the Lokpal bill centered on two maincriticisms: the lack of direct control over the country��sleading criminal investigation agency that parties said robbedthe legislation of powers to punish the corrupt; and that itinfringed on the rights of states by forcing them to mold localgraft-fighting agencies to the federal law.
The ombudsman that Singh��s government wanted to createwould have been able to scrutinize the prime minister exceptover issues of national security. It wouldn��t have had directoversight of junior bureaucrats responsible for everyday acts ofpetty corruption that blight business and governance.
Former telecommunications minister Andimuthu Raja,bureaucrats and business executives are on trial accused ofconspiring to award cellphone permits to ineligible companies ina 2008 sale that India��s chief auditor says might have cost thegovernment $31 billion in foregone revenue. Other charges havebeen brought over contracts for the hosting of last year��sCommonwealth Games.
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