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India s PM concedes to new probe into telecom scam

NEW DELHI, Feb 22, 2011 – India\’s prime minister bowed to pressure on Tuesday and agreed to set up a cross-party probe into the tainted sales of telecom licences in 2008, which cost the country up to $40 billion.

Opposition parties wrecked the last session of parliament in 2010 by holding protests every day demanding an inquiry into the sale of the second-generation telecom licences which were overseen by ex-telecom minister A. Raja.

Raja, who stepped down last November, has been arrested and remains in police custody, while a host of senior businessmen including Anil Ambani, one of India\’s richest men, have been questioned over the alleged scam.

"We can ill-afford a situation when parliament is not allowed to function," Prime Minister Manmohan Singh told lawmakers. "So it is in this special situation that the government agrees to the setting up of a joint parliamentary committee."

He added, in a rebuke to the pressure tactics of the opposition, that "we must try to resolve our differences in a spirit of cooperation and collaboration".

Raja, a low-caste politician from a regional party in Singh\’s coalition government, is suspected of rigging the rules for the sale of phone licences in 2008 to favour certain companies.

An investigation by the national auditor concluded that losses from the flawed first-come, first-served sales process could amount to $40 billion dollars, though the government disputes this estimate.

A host of scandals ranging from criticism over the organisation of the Delhi Commonwealth Games last October to the so-called 2G telecom scam has sapped the energy of Singh\’s administration and led to months of bad publicity.

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