Crisis-hit government defers parliament reopening

Prime Minister Manmohan Singh's popularity is at its lowest since he first came to power in 2004. Policymaking has been paralysed by a series of high-profile corruption scandals and Asia's third-largest economy is slowing down on high inflation and interest rates.

The government is trying to avoid a repeat of April's anti-graft protests by talking to a team of civil society activists who had forced it to fast-track the decades-old proposal for an independent ombudsman to investigate corruption in high places.

But the negotiations have seen differences emerge over the contents of the legislation, most importantly whether the prime minister should be investigated by the ombudsman.

Swami Ramdev's hunger strike against corruption had to be broken up by force this month. Anna Hazare, a popular Gandhian activist who had fasted in April to demand the bill, has vowed a repeat if the new law is not tough.

The monsoon session of parliament will begin on Aug. 1 and run till Sept. 8, Parliament Affairs Minister Pawan Bansal told reporters, two weeks later than it usually convenes.

"They would like to get things in order. It's been a very rocky period for the government," said political analyst Mahesh Rangarajan. "Otherwise legislative business will not be possible. I'm not sure it'll work, it'll be a stormy session."

Apart from the anti-corruption bill, the government may also propose laws to make it easier for industries to acquire land, a step seen key to take the edge off protests that have delayed projects like POSCO's $12 billion steel mill.

The last two sessions of parliament saw almost no legislative business conducted, with the main opposition Bharatiya Janata Party forcing shutdowns over a telecoms scandal that may have cost the government $39 billion in lost revenue.

Economists, industrialists and bankers have warned the policy paralysis could make India unattractive for foreign investors and lead India into an economic slump that will be difficult to recover from.

The deferral may also give Singh a chance to reshuffle his cabinet, following up on his earlier comments for bringing in young and efficient administrators into the government where many of the ministers are above 70-years-old.

The cabinet has long been criticised for being out of touch with public sentiment, mired in accusations of corruption against ministers and lacking teeth to take decisions.

The Congress-led coalition is not expected to fall as it still has a slim majority in parliament. Some of its allies are also mired in corruption scandals and would not want to face the wrath of the electorate.