Indian Prime Minister to Keep His Economics Chief,
Indian Prime Minister P. V. Narasimha Rao tore up his finance minister’s resignation letter Friday, ending a Cabinet crisis over a $1.5-billion securities scandal.
A senior official in Rao’s office said the prime minister wrote to Manmohan Singh, architect of India’s recent economic reforms, rejecting the resignation submitted last week.
Rao indicated in Parliament on Thursday that he would keep Singh in his job. Friday’s letter made it official.
The governing Congress-I Party got another boost Thursday when a faction of a small, left-leaning party merged with it, giving Rao a two-seat majority in the 528-member lower house of Parliament.
Singh offered to step down after an all-party parliamentary investigation criticized the Finance Ministry for failing to anticipate and check the securities scandal, in which bank funds were illegally diverted to stockbrokers for speculation.
The uncovering of the scam in April, 1992, brought down the stock market, wiping out the savings of millions of investors.
Rao has promised to punish those named in the report but has asked for three months to study it. A police investigation is also underway.
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