Ally of India

By Bappa Majumdar

NEW DELHI (Reuters) - A major ally of the Congress party said it will leave the ruling coalition due to disagreements over ministerial positions, potentially weakening the new government's ability to pass bills in parliament.

The DMK party from Tamil Nadu state said it would only offer its 18 lawmakers as outside support to the coalition in parliament, a senior party official said on Thursday.

The move will almost certainly not deprive the Congress-led coalition of a majority in parliament.

"Karunanidhi has asked me to inform you that DMK will support from outside," T.R. Baalu, a senior leader said, referring to a directive from the DMK leader.

The DMK's move came as the Congress party was cobbling together a coalition of parties on the eve of the swearing-in of Prime Minister-elect Manmohan Singh on Friday.

The coalition said it had the support of 274 lawmakers before the DMK exit, two more than needed for a parliamentary majority.

With outside support, the coalition said it had 322 members of the lower house of parliament.

MARKETS SURGE

Analysts said it may be political posturing amid negotiations over ministerial portfolios and noted that the DMK made the same move after the 2004 election, before eventually joining the ruling alliance.

"The Congress does not have to bother about them. It is only a threat and they will finally come around. They (the DMK) also are aware that the Congress party does not need to bother about them," said political commentator Kuldip Nayar.

"They (the Congress) have enough seats on their own and they can get others."

A Congress official said negotiations with the DMK were still ongoing.

Indian financial markets have surged on hopes the ruling coalition's strengthened mandate would allow Singh to pursue reforms at a time when growth in Asia's third-largest economy has hit a six-year low of 6.5 percent.

Signs of dissent were beginning to show among allies of the Congress party, after leaders of the Jammu and Kashmir National Conference, another ally, said the Congress had ignored them.

"My father is not in the habit of sitting around and waiting," head of National Conference, Omar Abdullah, said referring to his father, Farukh Abdullah, who is touted to get an important portfolio, but has not been told anything.

"He is senior enough and has been in politics long enough for a few basic courtesies to be extended," Omar said, adding that the Congress party has not made clear whether his father, would find a place in the cabinet.

Another ally, The Trinamool Congress party, which won 19 seats have also demanded several ministerial berths.

(Editing by Jon Hemming)

Article Published: 21/05/2009