NEW DELHI - India’s government lost its majority Friday when a key ally finalised its divorce from the coalition, but it was saved from the immediate risk of collapse by securing the support of a regional party.
All 19 Trinamool lawmakers will now join the opposition ranks, bringing an end to an uneasy alliance inside the left-leaning coalition and leaving Singh’s Congress party dependent on outside support from other parties in parliament.
But while analysts said Trinamool’s departure increased the prospects of early polls, Singh appeared in no immediate danger after the regional Samajwadi Party vowed to keep out the opposition BJP party and their Hindu nationalist agenda.
“We will not allow communal forces to come into power. Why should I withdraw support to the Congress?” Samajwadi party chief Mulayam Singh Yadav told reporters in New Delhi.
It was unclear if Samajwadi, whose 21 MPs generally back the government, would join the coalition formally and take up posts in the government when Singh reshuffles his cabinet.
Years of tension between Congress and Trinamool exploded last week after Singh’s government announced a string of reforms including allowing foreign supermarkets into the retail sector and hiking the price of subsidised diesel.
Fiery Trinamool chief Mamata Banerjee initially gave the government 72 hours to withdraw the measures, then announced that her party would quit on Friday unless her demands were met.
She accused the government of allowing in foreign supermarkets in “an undemocratic and unethical manner”, while speaking at a function in Kolkata on Friday.
“The government is selling out the country. You will lose your land, shops and livelihood if the decision is implemented,” she said. Even Samajwadi’s chief Yadav, a wrestler-turned-politician, is against foreign supermarkets entering India, underlining the difficulties the government will have in pressing ahead with promised new reforms ahead of elections due in 2014.
Finance Minister P Chidambaram unveiled new measures to boost the economy on Friday, indicating the administration was looking to build momentum and change the perception of a government bogged down for years in corruption scandals.
The changes aim to encourage investors to put extra money in the stock market and spur more domestic companies to borrow cheaply abroad, leading to fresh leaps on the Bombay Stock Exchange.
The benchmark 30-share Sensex Index closed up 2.2 percent at 18,752.83 points, while the Indian currency also climbed, hitting a four-month-high against the dollar of 53.38 rupees.
India’s Prime Minister Manmohan Singh said Friday that a series of reforms which prompted the resignation of a coalition ally were vital to combat an economic slowdown and restore investor confidence.
“I want your support to implement the economic reforms which are vital to combat the economic slowdown,” Singh said in a televised address to the nation.
“I promise that the country will return to a faster and inclusive growth track but I will need your support, please do not listen to those who are dissuading you,” he added.