Govt gathering support for survival, N-deal
Facing the likely withdrawal of Left allies, the government moved closer on Friday to clinching political support it needs to avoid early elections and to force through a nuclear energy deal with the United States.
Prime Minister Manmohan Singh and his senior officials spent the day meeting with leaders of a key regional party, who gave their strongest hint yet they will back the Congress party-led ruling coalition in parliament if the communists walk away.
The Samajwadi Party (SP), a key regional party from Uttar Pradesh, has a history of pragmatic alliances with national parties and would be burying a decade of bitter relations with Congress if it comes to the rescue.
"The prime minister's clarifications on the nuclear deal are quite satisfactory," SP General Secretary Amar Singh told reporters after meeting the prime minister.
Soon after, the four communist parties that give the coalition a majority in parliament said the government must tell them by Monday if it plans to press ahead with the next step in finalising the civilian energy deal, which they strongly oppose.
With time fast running out, the government needs to seek approval for the deal from the International Atomic Energy Agency (IAEA), the next international move needed to make the agreement operational.
"We wish to know definitely whether the government is proceeding to seek the approval of the safeguards agreement by the board of governors of the IAEA," said Prakash Karat, head of the Communist Party of India (Marxist), reading out a letter addressed to the government.
"Please let us know the position by July 7, 2008."
The Left says the pact will make India a pawn of Washington, while critics argue their strident opposition is more due to an ideological dislike for the United States.
The pact, which would give India access to US nuclear fuel and technology, is potentially worth billions of dollars to US and European nuclear supplier companies and would give India more energy alternatives to drive its development.
Analysts say it would shift trade and diplomatic ties towards the West.
The communist party said it would launch a national campaign from July 14 to explain its opposition to the nuclear agreement and to policies it holds responsible for what it called "runaway" inflation.
The ruling Congress party replied sternly to the deadline.
"The entire track record of the UPA government has been an utmost transparency," said Congress spokesman Abhishek Singhvi, referring to the United Progressive Alliance (UPA) coalition.
"But that does not mean sovereign governments or political parties can be subjected to deadlines of short time limits."
Singh heads to a G8 summit in Japan next week, where he will likely meet U.S. President George W. Bush -- the man who shook hands with Singh over the accord at the White House in 2005.
Frustrated after four years of stymied reforms due to leftist opposition, Singh now seems to want to secure his legacy before the end of his term, even if some experts say time has run out for the US Congress to pass the deal before Bush leaves office.
The result could lead to months of electioneering and political bickering in India just as investors seek tough decisions on a trillion-dollar economy that faces inflation at a 13-year high, rising interest rates and signs of an economic slowdown.
The political uncertainty has hit markets this week.
Stocks fell more than 4.2 percent on Thursday, pushed down not only by worries over the government's future but also by record oil prices and inflation. Shares rose more than 2 percent by afternoon trading on Friday.
In Washington, White House spokeswoman Dana Perino told reporters on Thursday that Bush and Singh would discuss the deal during their meeting and the United States remained committed to it.
"We respect the democratic process that's currently working its way in New Delhi, and look forward to working with India when it is ready to move forward," she said.
The Samajwadi Party has 39 seats in parliament, compared with 59 for the communist parties. The Congress-led ruling coalition needs the support of 44 lawmakers to reach a majority. It would try to win the other five seats from smaller parties.