Indian government wins confidence vote

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

The government said it would now push ahead with the pact, which would give India access to foreign nuclear fuel and technology and end decades of isolation, as well as work towards reforms to liberalize the trillion-dollar economy.

"This will send a message to the world at large that India's head and heart is sound, that India is prepared to take its rightful place in the comity of nations," Singh told reporters. "I have always said the deal was important and now we know it."

The government's joy at its victory was tempered by a bribery scandal, after opposition lawmakers interrupted the debate to wave wads of cash they said were offered as bribes by the government to abstain.

The furor was described as one of the lowest points in parliamentary history, and led to fresh demands for Singh to resign, and catcalls preventing him from even delivering his concluding remarks after the two-day debate.

Singh said the accusations has made him "extremely sad" and promised to cooperate in a parliamentary inquiry.

There had been a flurry of horse-trading in the run-up to the vote as both sides wooed small, regional and caste-based parties. But in the end the government won more comfortably than expected, by 275 votes to 256 with 10 abstentions.

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 next task for the government will be how much it will be able to push through on the reforms front." said Agam Gupta, head of trading at Standard Chartered Bank in Mumbai.

"Stocks should start on a strong footing and bonds will also get bought. This is a positive for all the asset markets."

Political analyst Mahesh Rangarajan said: "It's a clear victory and an endorsement of the nuclear deal."

"But the bribery scandal will come back. Expect an opposition offensive in the coming weeks."

Nevertheless, analysts said the government should now survive until the end of its term, with elections due by next May.

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 Indian government wins confidence vote 
Activists of Democratic Youth Front of India, DYFI, hold placards and march in a rally protesting the proposed India-U.S. nuclear deal in Calcutta, India Tuesday, July 22. India’s government survived a no-confidence vote Tuesday, avoiding early elections and clearing the way for a landmark nuclear energy accord with the United States. (AP)

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