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India: Congress Party Reaches Deals To Form New Government

The Congress Party of India says it obtained assurances from allies and communist legislators during the weekend that will allow Sonia Gandhi to be sworn in as prime minister as soon as this week (19 May). RFE/RL takes a closer look at the latest political developments in the world's largest democracy.

Prague, 17 May 2004 (RFE/RL) -- Officials from India's National Congress Party say they expect Sonia Gandhi to be sworn in as prime minister as soon as 19 May, following announcements by communist legislators that they will support her from outside of a governing coalition.

Manmohan Singh, a senior official in the Congress Party, said Gandhi obtained letters of support during the weekend from enough parliamentary groups to ensure the necessary backing of more than half of India's 545-seat lower house of parliament. "Once the [lower house of parliament] has been formally constituted, the constitutional process will start and everything will go smoothly," he said.
Despite declines in financial markets, most market analysts see the modernization of the Indian economy as largely unstoppable.

But already, some of Gandhi's supporters say the decision by communist legislators not to be part of the government could represent a setback. Among them is the noted Indian scholar Nirmala Deshpande. "If [the communists] had been a part of the government, they could have worked more,” she said. “They have given support from outside. We are happy. But it's not enough."

Despite the Congress Party's surprise election victory last week against the governing Hindu nationalist Bharatiya Janata Party (BJP), Gandhi still needs support from about 60 communist legislators to ensure backing from a majority of the parliament.

The largest communist group in the legislature is the Communist Party of India (Marxist). Its secretary-general, Somnath Chatterjee, announced today that although the party will support a cabinet led by Gandhi, it will not take any posts in the new cabinet nor consider itself part of the governing coalition. "We are not joining the government," he said.

Political analysts in New Delhi say it is common for Indian parliamentary groups to support a government from outside of a coalition. In such cases, legislators often side with the governing coalition on critical issues like a vote of confidence. But they also keep a distance because of specific issues where their political platforms differ significantly.

India's communists, who have their own economic agenda, oppose some privatization plans and other economic reforms supported by the Congress Party. In some parts of India, communist politicians are in direct opposition to members of the Congress Party.

Singh said the new government led by his Congress Party will be "both pro-growth and pro-trade." Singh was the architect of a series of reforms introduced in India in 1991 that are still being implemented today. He said that India's stock markets should find stability in the new government's policies.

Those remarks appeared to be aimed at calming the concerns of investors, who have seen India's main stock-exchange index and currency markets tumble since the results of the elections were announced last week. A plunge in share prices today was the second-largest drop in the history of the Bombay index. Trading was temporarily halted by an automatic mechanism after the main index fell 11 percent within minutes of the start of trading. And when trading resumed, the index continued to fall on fears that the communist influence on the cabinet could delay reforms. Trading was suspended again for two hours when those losses continued to plunge for a total of more than 15 percent for the day.

Despite those declines in financial markets, most market analysts see the modernization of the Indian economy as largely unstoppable. Sanjeev Sanyal, a senior economist at Deutsche Bank, said he expects the reform process to continue in the same direction as in the past 10 years. He said that if the new government comes up with a credible economic program and a credible economic management team, today's share price declines will represent a buying opportunity for investors. As a result, he said, investors are closely monitoring the remarks of Gandhi's political allies to get a sense of future policy directions.

Gandhi over the weekend told a gathering of Congress Party parliamentarians that the new government will be "strong and stable" and dedicated to the promotion of social harmony.

Meanwhile, some political observers warn that continued friction between Gandhi and the outgoing Hindu nationalists in the BJP could affect peace talks with officials in neighboring Pakistan. Pakistani Foreign Minister Khurshid Mehmood Kasuri last week called for the new Indian government to continue consultations with Islamabad in order to resolve the decades-old dispute between their countries over divided Jammu and Kashmir.

"Pakistan looks forward to seriously and closely engaging with the next government in India to promote this process of peace and resolution of differences and disputes, including the issue of Jammu and Kashmir. We in Pakistan are very sincere in carrying forward the peace process already initiated and sincerely hope the next government in India will join us in this endeavor so that this historic opportunity for peace in South Asia is not missed." Kasuri said.

But some political observers conclude that pressure from Hindu hard-liners could make it more difficult for Gandhi to negotiate and convince the Indian people to make the kind of concessions that Pakistan's President Pervez Musharraf is seeking to resolve the conflict over the disputed territory.