Indian government wins confidence vote

Indian Prime Minister Manmohan Singh's government won a vote of confidence in parliament on Tuesday, ensuring the immediate survival of the ruling coalition and a civilian nuclear deal with the United States.

Earlier the opposition demanded the resignation of the prime minister anyway after three of its lawmakers said they had been bribed to abstain.

The government won 275 votes against 256 for the opposition, the parliamentary speaker Somnath Chatterjee announced.

The session was angry and chaotic. The debate was briefly adjourned when opposition lawmakers interrupted the debate to wave wads of cash they said were offered as bribes by the government to abstain.

The vote pitted the Congress-led coalition that negotiated the civilian nuclear deal against its former communist allies and opposition parties led by the Hindu-nationalist Bharatiya Janata Party (BJP).

With the vote very close, several MPs who are ill were flown or wheeled in from hospital, and others, in jail for crimes such as murder and extortion, were granted temporary release.

The win means the four-year-old, left-of-centre government will, for the moment, stay in power. It will try and move ahead with a civilian nuclear deal, seen as one of the few legacies of the prime minister.

The deal would draw India closer to the West and allow the Asian giant access to foreign civilian nuclear fuel and technology, despite not signing the Non-Proliferation Treaty and conducting nuclear tests in 1974 and 1998.

It could unlock $40 billion in investment over the next 15 years, according to an Indian business lobby group, as India seeks new energy sources to tap its booming, trillion-dollar economy.

But it is unclear whether the prime minister will be able to stay in power until elections scheduled by May, 2009, especially if the bribery scandal spirals and involves top government officials.

Investors had hoped the victory would give the government time to battle rising inflation, which has hit the pockets of millions of poor voters, as well as passing some economic reforms in sectors like insurance and pensions.

Investors had expected a narrow win for the government, and said the victory could boost markets. The main share index has risen by more than 12 percent in the last four sessions.

The confidence vote was sparked by the withdrawal of the government's communist allies to protest the nuclear deal, which they say will make India's security and energy policies dependent on the United States.

Finance Minister Palaniappan Chidambaram, in a speech frequently interrupted by shouting from the opposition benches, defended the government's record and said nuclear power was vital if the country was to emulate the economic success of China.

"This government under Dr. Manmohan Singh's leadership is charting out a new path which will end India's nuclear isolation, which will pave the way for India becoming an economic superpower," he said.

Despite the parliamentary victory, it is still unclear whether there is enough time for the deal to be passed by U.S. Congress under the Bush administration.

The agreement needs clearance from the governors of the U.N. atomic watchdog and a 45-nation group that controls sensitive nuclear trade.

The government helped secure a parliamentary majority with the support of the regional Samajwadi Party (SP), which replaced the communists as its parliamentary support.

The SP will now effectively hold the balance of power in India and the party is expected to give the government more room than the communists to pass economic reforms.