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[OS] INDIA/GV - Strike grips India state, piles pressure on government

Released on 2013-09-09 00:00 GMT

Email-ID 2068439 Date 2011-07-05 15:17:44 From michael.sher@stratfor.com To os@stratfor.com

[OS] INDIA/GV - Strike grips India state,

piles pressure on government





Strike grips India state, piles pressure on government

05 Jul 2011 11:54

http://www.trust.org/trustlaw/news/strike-grips-india-state-piles-pressure-on-government/



NEW DELHI, July 5 (Reuters) - A strike aimed at forcing the government to

recognise statehood for a southern Indian region shut businesses and

disrupted transport on Tuesday, posing another challenge to floundering

Prime Minister Manmohan Singh.



The strike in the ruling Congress party stronghold of Andhra Pradesh state

came as the resignation of one cabinet minister and a diatribe against

homosexuals from another further embarrassed the government in a day of

turbulence indicative of growing political chaos in Asia's third largest

economy.



On Monday, nine Congress members of parliament from Andhra Pradesh

resigned from the federal parliament over the party's failure to take a

stand on the four-decades-old demand to declare Telangana, a northwestern

region of the state, a separate state.



Activists pushing for Telangana to become India's 29th state, called the

strike and authorities deployed more than 13,000 police and paramilitary

troops in Hyderabad, the capital of Andhra Pradesh, in a bid to prevent a

repeat of pro-independence protests in March that turned violent.



Sporadic incidents of violence erupted in the city and nine other

districts as protesters attacked vehicles, shops and factories, with

businesses and educational institutions shut and public road transport

suspended.



Singh has already been hit by a series of corruption scandals this year

and the latest controversies will add to a sense of drift in India,

further paralysing reforms from land acquisition to tax streamlining.



Activists want the new state carved out of Andhra Pradesh, one of the

country's biggest states. Its capital, Hyderabad, is home to the Indian

headquarters of global firms such as Microsoft and Google .



The resignations - which still need to be accepted by the government -

could halve the government's rough majority of 18 only weeks before a new

parliamentary session starts on Aug 1. Media said more MPs had threatened

to quit over Telangana.



Just when Telangana came to the boil, two other controversies surfaced.



"TORRID TIME"



Corporate Affairs Minister Murli Deora offered to resign, according to

government sources, citing personal reasons.



He has come under scrutiny after a state auditor criticised the oil

ministry - which Deora used to head - for allowing exploration companies

to overstate costs.



The party had yet to formally discuss the resignation, a Congress

spokesperson told reporters.



Health Minister Ghulam Nabi Azad heaped more embarrassment on the

government by saying late on Monday, at a conference attended by Singh,

that homosexuality was a "a disease which has unfortunately come to our

country".



"Congress is going through a torrid time, of that there is no doubt," said

Vinod Mehta, editor of news magazine Outlook.



"Telangana accentuates and emphasises the kind of turbulence the party is

facing all over the country ... At the moment it has many fires to put

out. And on top of all this, the PM's reputation and credibility has been

eroded."



Government survival is so far not under threat. The opposition is weak and

does not want a snap general election halfway through Singh's second term.



But Telangana joins a list of issues unresolved by a rudderless Congress

that includes archaic taxes and foreign investment rules that have spooked

investors.



Singh was reelected in 2009 with a greater majority, but since then his

government has faced one storm after another, including India's worst ever

corruption scandal in which up to $39 billion was lost in kickbacks for

telecom licenses.



The government's foot-dragging over Telangana -- it approved the new state

in principle last year, but changed its mind after criticism from the

opposition -- adds to a slew of corruption scandals and a failure to curb

high inflation that forced Singh to refute accusations that he was a

lame-duck.



If the resignations of the state assembly members are accepted, Congress

would lose its majority there.



"Cong mess now adds Telangana to its menu", The Economic Times blazed on

its front page on Tuesday.



Independence activists say the Telangana region has been neglected by

successive governments and trails other regions in terms of development.

They called for a 48-hour strike to press their demands shortly after the

lawmakers resigned.



A cartoon in the Hindu newspaper depicted Singh and Congress president

Sonia Gandhi being singed by a Telangana fire as they stepped out to open

parliament.



Congress holds 32 of the 42 national parliamentary seats from Andhra

Pradesh, making the state one of the most important in a general election.



India has 28 states and carved out three new ones in 2000. Besides

Telangana, there are demands for new states in western and eastern India.









