Left in limbo

Overview

The latest political manoeuvrings in Delhi merely postpone by 4-6 weeks the moment of truth in the festering government crisis. The most that can be said for certain is that at around the turn of the year, it will become clear whether the government is going to fall over the US-India nuclear deal with the resulting national election probably being held in April, or if it will be able to serve out its full term ending in May 2009.

We predict that the coalition parties will step back from the brink. None of them wants an early election although the timid Congress party in reality has less cause to fear this outcome than any other party, the opposition Bharatiya Janata Party included. So underlying stability and policy continuity might even benefit if our prediction proves wrong, and an early election does take place after all. And in that event, it now appears that the nuclear deal would be implemented anyway.