Supreme Court rejects CVC appointment

By C.J. Kuncheria
NEW DELHI | Thu Mar 3, 2011 11:00pm IST
(Reuters) - The Supreme Court on Thursday quashed the government's appointment of a top anti-graft official for involvement in a palm oil import scam, delivering another blow to Prime Minister Manmohan Singh's coalition.

The rejection of P.J. Thomas's appointment as central vigilance commissioner comes as Singh's government is trying to defend itself against a series of graft scandals, including a $39 billion telecoms licensing scam.

The opposition Bharatiya Janata Party (BJP), aiming to ride a wave of popular anger over the corruption scandals, seized on the verdict, demanding Singh accept responsibility and resign.

"It is a rebuke to the prime minister and the home minister. Governance with transparency and accountability has completely been lost," said BJP spokeswoman Nirmala Sitharaman.

Adding yet more pressure on the government, the Supreme Court, of late an outspoken critic of the government, also slammed its failure to crack down on large scale tax evaders.

The government has been criticised, including by the opposition, over the issue of so-called "black money" -- how to retrieve hundreds of billions of dollars said to be stashed illegally abroad.

The court on Thursday rebuked the government for not cracking down on high-profile suspects. Local media quoted the bench as asking, "what the hell is going on in this country?"

Singh has faced increasingly harsh questions about his leadership despite a reputation for personal integrity. But for the moment many analysts see his resignation as unlikely as it would probably lead to an early election and the defeat of the Congress party.

Singh, who headed a panel that chose Thomas as central vigilance commissioner last September, told reporters in parliament he accepted the court decision.

The ruling Congress party sprang to the prime minister's defence, saying the decision was not a reflection on Singh.

"The PM is not directly involved in any corruption. There is no question of him needing to resign," B.K. Hariprasad, a Congress general secretary, said.

The latest rebuke from the Supreme Court underlined the disarray in government and Singh's inability to govern effectively Asia's third-largest economy, which has seen foreign direct investment fall sharply as investor confidence saps.

"The prime minister comes across as a rubber stamp, not only in this case but in several others. This further dents his image and standing and is pushing him further into embarrassment," N. Bhaskara Rao, head of New Delhi-based Centre for Media Studies, said.

Last month, the prime minister was forced to defend himself against accusations that he was a "lame duck" leader, soon before the government gave in to an opposition demand to set up a parliamentary investigation into the telecoms scam, considered to be independent India's biggest corruption scandal.

Regulatory concerns in India, combined with the global economic slowdown, have hit foreign direct investment and contributed to making the Mumbai stock exchange the worst performing of the world's major share markets.