Indian coalition wins crucial support

India's government secured crucial backing from a regional party on Friday that saves it from the immediate risk of collapse after the loss of a one-time coalition partner in a split over economic reforms. Barring an unexpected last-minute compromise, six ministers from the Trinamool party were to resign their posts in New Delhi on Friday and its 19 lawmakers will end their uneasy alliance inside the left-leaning coalition. The move leaves Prime Minister Manmohan Singh's Congress party running a minority government, dependent on outside support from other parties and vulnerable to falling before the scheduled date for the next elections in 2014. But Singh appears in no immediate danger after the Samajwadi Party (SP) from northern Uttar Pradesh state, whose 21 MPs have generally backed the government, vowed to keep the Hindu nationalist Bharatiya Janata Party (BJP) from power. "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 the SP would join the coalition formally and take up posts in the government when Singh reshuffles his cabinet after the departures of the Trinamool ministers, who hold the railway portfolio among others. 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 them, then announced on Tuesday that her party would quit on Friday unless her demands were met. "The chairperson of the TMC (Trinamool) clearly spelt out the three issues," vice-president and spokesman Derek O'Brien told AFP, saying the supermarket reform and changes in diesel and gas policy should be reversed. If the demands were not met by 3:00 pm (0930 GMT) on Friday, Trinamool would complete its withdrawal, he explained. Banerjee has said she is "totally against" the idea of opening India's retail sector to global chains such as Walmart and is angered by the hike in diesel prices. She has accused the left-of-centre Congress party of being "anti-poor". The SP's populist leader Yadav, a wrestler-turned politician, is also against foreign supermarkets, underlining the difficulties the government will have in pressing ahead with promised new reforms. News reports suggested Friday the government was preparing to raise the cap for foreign direct investment in Indian insurance companies from 26 percent to 49 percent. Shopkeepers, traders and labourers blocked railway lines and closed markets across the country on Thursday in a day of protest against reforms organised by trade unions and opposition parties. The SP's move to publicly back the government and a perceived reluctance of the main opposition BJP to try to bring down the government reduces the chances of early polls, a huge undertaking in the world's biggest democracy. "Felling this government and forcing an election is not our sole purpose," said BJP party president Nitin Gadkari. "We have not thought about bringing any no-confidence motion." Analysts say Singh and his boss, the more left-leaning Congress party president Sonia Gandhi, appear to have been finally convinced reforms are necessary to improve India's bleak economic outlook. Reports on Friday said the media-shy Singh, who has not spoken in public since Saturday, would give a televised address to the nation once Trinamool had quit the coalition to justify the reforms. Deteriorating growth, a ballooning fiscal deficit along with the threat of losing its investment grade status "all played a role in forcing the hand of authorities", said Credit Suisse economist Robert Prior-Wandesforde. "It's a shame that the government waited so long to take action, but, as is often the case in India, it requires near crisis conditions before anything is done," he said.