Govt may face trust vote

Govt may face trust vote

New Delhi: The opposition forced Parliament to shut briefly on Monday over a report security agencies had tapped senior lawmakers’ telephones, adding pressure on the government a day before a possible confidence vote.

Few expect the Congress-led government to fall, despite it being at its weakest since re-election last year after two allies quit the coalition last month.

Here are some questions and answers about the vote, why the government will likely survive it and what the fate of pending reform proposals will be.

What is the vote about?

At least 13 opposition parties, led by the Communists, have demanded a vote against an unpopular hike in fuel prices which has helped push headline inflation to a 17-month high of 9.9%.

If the government loses the vote, it must resign. The Speaker has still not ruled whether the vote will be allowed on Tuesday for a part of the budget allocation of funds to ministries.

What is the likely outcome?

Congress, like many observers, expects to survive the vote despite the coalition being considerably weakened after two allies quit. Others have expressed disquiet publicly.

Few parties, including the main opposition Bharatiya Janata Party (BJP), want an election. The main Communist party has said the vote is not to pull down the government but to make it roll back the hike in taxes that made fuel more expensive.

Many who oppose Congress could abstain rather than vote against the government, letting the government scrape through.

Observers say even the BJP could end up abstaining. In a telling sign, the party has not yet sought a vote against the government despite vowing to demand one of its own.

Some analysts have put the coalition’s strength at 274, two more than the half-way mark. But the ruling party received a boost when a key regional party with 21 lawmakers said it would not let the government fall.

Will it be business as usual?

Even if the government survives a vote, it will be hobbled by its wafer-thin majority, raising questions about Prime Minister Manmohan Singh’s ability to push through reforms.

With allies suspicious of opening up the economy and of its impact on their voters, crucial legislation will be further delayed, disappointing domestic and foreign investors.

The government has already suspended the introduction of a bill to cap operator liability in case of a nuclear accident, crucial for US firms like General Electric and Westinghouse Electric to enter the $150 billion sector.

Other bills to open up the pension and insurance sectors and to allow foreign universities set up local campuses are also set to be put on ice for now.

What are markets thinking?

Bond and stock markets have largely taken the events in their stride, with few participants expecting the government to fall.

If the vote goes against the government, markets would tumble on worries the political uncertainty would leave the economy rudderless just as it is rebounding from a slowdown.