Bloomberg News

India’s Upper House Debates Graft Law in Singh’s Last Hurdle

December 29, 2011

(Updates with Congress party comment in eighth paragraph.)

Dec. 29 (Bloomberg) -- Indian upper house lawmakers debated a bill to curb corruption as Prime Minister Manmohan Singh fights to secure its passage after activist Anna Hazare ended his public fast early amid signs he may be losing support.

Approval in the upper chamber, where the ruling coalition is 28 seats short of a majority, is the final hurdle for legislation Singh is seeking to end a year of protests over alleged graft that have weakened his government, stalled policy making as Asia’s third largest economy slowed and led to the jailing of a minister and business executives.

“The government has wasted an enormous amount of time trying to pass this bill at the expense of other policies,” said Sudha Pai, a professor at the Centre for Political Studies at Jawaharlal Nehru University in New Delhi. “It highlights their weakness.”

The government must win the support of independent and regional lawmakers to clear the bill in the upper house, or Rajya Sabha. The bill, known as the Lokpal, passed in the lower house Dec. 27. An extended session of parliament ends today.

Opening the debate in Parliament, Arun Jaitley, a leader of the main opposition Bharatiya Janata Party, branded the bill “half-hearted” legislation. “Are they only willing to proclaim or are they ready to strike” against the corrupt, Jaitley said in a speech.

Singh’s government defeated Dec. 27 attempts by lower house lawmakers from several parties to give the proposed anti-graft ombudsman overall control of the country’s main criminal investigation agency, also a key demand of Hazare who argues it is the only way to ensure the new body has the powers to probe and punish those accused of corruption.

Junior Officials

The anti-graft agency Singh’s government wants to create will be able to scrutinize the prime minister except over issues of national security. It won’t have direct oversight of junior bureaucrats responsible for everyday acts of petty corruption that hinder business and effective governance.

Senior Congress politician Abhishek Manu Singhvi defended that decision in today’s debate, warning against creating a Lokpal so bloated it would itself become a “breeding ground for corruption.”

The bill passed by the lower house included changes that require the assent of state governments before a Lokpal agency can be set up at the provincial level. It was unclear if this would be enough for government allies like Mamata Banerjee’s Trinamool Congress who fear a dilution of state powers.

Hazare, 73, called off his protest yesterday as supporters expressed concerns over his health and crowds at the fast venue in Mumbai fell to a few thousand people.

Fast Tactics

Hazare, who based his campaign on the hunger strikes used by independence icon Mahatma Gandhi leading to charges he was holding a democratic government to ransom, dismissed the graft bill as too weak and vowed to protest against those who had “betrayed the nation.” His supporters will target Singh’s Congress party before elections early next year, he said.

As polls loom in five states, including in the country’s most populous province of Uttar Pradesh where Congress heir apparent Rahul Gandhi is leading campaigning, Singh needs to cap the damage done by graft scandals. They have included charges linked to a 2008 sale of mobile-phone airwaves, for which former telecommunications minister Andimuthu Raja is among those on trial, and last year’s Commonwealth Games.

Reserve Bank of India Governor Duvvuri Subbarao signaled on Dec. 16 that the country’s $1.7 trillion economy may expand less than an earlier estimate of 7.6 percent this fiscal year. Factory output fell 5.1 percent in October from a year earlier, the first contraction since 2009, data showed Dec. 12.

Defeat Options

If the government is defeated in the upper house it will either have to shelve the legislation or call a rare joint session of parliament to forge a consensus. If the bill is passed with some changes, Singh will need to take it back to the lower house for approval.

Singh’s administration will need a repeat of events in the lower house Dec. 27 when lawmakers of the Samajwadi Party, Bahujan Samaj Party and Rashtriya Janata Dal walked out of the chamber before voting began.

--With assistance from Mark Williams in New Delhi. Editors: Mark Williams, Abhay Singh

To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Andrew Macaskill in New Delhi at amacaskill@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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