Numerous corruption scandals hobble govtNEW DELHI: Indian police have made the first arrest of a company executive in a multi-billion dollar telecoms corruption scandal that has rocked the Congress party-led government and undermined Prime Minister Manmohan Singh. Parliament's last session was halted by opposition protests demanding a probe into the scandal. The government has refused a parliamentary investigation, but there have been recent signs it may cave in, worried more chaos could make the passage of the key Feb. 28 budget difficult, and seriously harm its image ahead of state elections this year. Shahid Balwa, vice chairman of a joint venture with Abu Dhabi's Etisalat , was arrested overnight on allegations two Indian telecoms firms got favourable treatment when licences were awarded in 2008 in the world's fastest growing mobile market. One of those companies was Swan, which has since been renamed Etisalat DB and is about 45 percent owned by Etisalat. Police suspect government officials colluded with the private sector in selling them lucrative 2G mobile licences below market value and are now probing whether anyone received kickbacks.The growing scandal has not yet threatened the survival of the coalition government because it holds enough seats in parliament, but a wrong move by the prime minister could hurt the ruling Congress party's chances in forthcoming elections. The case is India's biggest graft scandal since 1989, when the Congress party lost a general election due to the Bofors scandal over gun contracts involving close associates of then Prime Minister Rajiv Gandhi who were accused of taking bribes. The stakes in the 2G scandal , which may have cost the country up to $39 billion in lost revenue, are higher though. Since Bofors, India has grown into a global power and a key destination for global investors in emerging markets.
