NEW DELHI, 9 November 2005 — Indian Prime Minister Manmohan Singh said yesterday the government’s image was unmarred after his foreign minister stepped aside during an inquiry into claims he benefited from irregularities in the UN oil-for-food program in Iraq, while Natwar Singh stayed defiant after being demoted to a minister without portfolio on Monday. “Our image has not been spoilt,” Manmohan told a press conference in Patna in Bihar state. Natwar quit the foreign minister’s job on Monday, the first political casualty of a report by former US Federal Reserve Chairman Paul Volcker, who said many politicians profited from the $64-billion program.
Natwar was named in the report along with the ruling Congress party, which heads the federal coalition. Both have denied any wrongdoing or having anything to do with oil-for-food contracts or oil allocations made by the Saddam Hussein regime.
Some analysts and newspapers say the Congress-led government is facing its worst crisis since coming to power in May last year and the prime minister — whose image as an honest and decent politician is his strength — should be worried.
Though analysts saw no immediate threat to the government, which is backed from outside by communists, it could be under severe pressure from the opposition if the Congress and its allies lose a key state election later this month. Polls have forecast the opposition nationalist Bharatiya Janata Party (BJP) and its allies were ahead in the state of Bihar.
Natwar, meanwhile, questioned the nature of inquiry conducted by the Volcker committee, and asserted that he had not received any letter from the committee regarding allegations of corruption in the Iraqi oil for-for-food program. “I am just a loyal member of the big party (Congress). If somebody levels these kind of allegations, they should be ashamed of themselves,” Natwar told his supporters who had gathered in large numbers at his official residence.
Asserting that he will reply to the charges in the Parliament, he said: “I’m not going to make any political speech here, nor am I going to comment on the Volcker Committee report. The next Parliament session is going to begin on the 23rd of this month. And I’ll make a statement there.”
He said: “I am not a coward. I am standing here and I can answer to the whole world,” he added.
Taking note of companies like Reliance, Tata and Kirloskar being listed in the Volcker report, Natwar said that every body should get a chance to clarify their stand. “My name is not even in the main report and Volcker says he has informed everyone,” he said.
Suggesting that the Finance Ministry may independently scrutinize allegations made by the Volcker report about 125 Indian companies having paid kickbacks to Saddam Hussain government, a senior official said: “There is no formal probe but we will look into the tax returns of the 125 companies in the normal course to see whether there is any violation.”
