BREAKING NEWS

India government, coalition ally edge closer to deal

By REUTERS

MARCH 8, 2011 08:41

NEW DELHI - India's Congress party and a key ally appeared closer to a deal to retain the ruling coalition's parliamentary majority on Tuesday after threats to quit the government sparked worries of political instability in Asia's third-largest economy.

The Dravida Munnetra Kazhagam (DMK) has 18 seats and gives the ruling Congress a slim parliamentary majority. A pull-out would force Congress to look for other fickle allies or continue as a minority government dependent on conditional support from other parties.

The controversy, sparked by a disagreement over seats for a state election in April, was another blow for Prime Minister Manmohan Singh, who is fighting a series of corruption scandals and high inflation that have weakened his government.

The coalition was not in danger of collapse even if the DMK ministers left because the party said it would continue to give conditional support to the government. But instability could hit any hopes of economic reforms.

Local media said there were signs that the two sides were closer to patching up as meetings were due to continue on Tuesday.

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