Modi fights back on corruption claims

India’s prime minister is facing calls to resign over his government's dealings with French defence company Dassault.

915-Modi-634

Modi and Ambani: facing questions over defence deal
(Image credit: 2007 AFP)

India's ruling Bharatiya Janata Party (BJP) is fighting back amid a scandal over a $9bn arms deal that has seen the prime minister facing calls to resign, says Adam Withnall in the Independent. The scandal relates to a deal struck by Narendra Modi's government in 2016 to buy 36 fighter jets from France's Dassault Aviation. Under Indian regulations, foreign arms companies have to invest at least 30% of the contract with an Indian partner.

India's opposition party, Congress, claims that Dassault chose a company owned by a billionaire industrialist and friend of Modi, Anil Ambani, instead of a more established firm. On Friday, Franois Hollande, French president at the time the deal was struck, said that the Indian government gave France no choice. Modi, who "stormed to power" in 2014 vowing to end corruption, quickly came under attack from the opposition Congress party who said he had no "moral right to remain".

Under pressure to "shore up his political base" ahead of state elections this year and a national election in spring 2019, Modi's response has been to accuse Congress of "working with foreign influences to destabilise India".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

However, this is far from Modi's only problem, says the Washington Post. Unemployment, falling farm prices and rural wages and a "demonetisation exercise that sapped liquidity" are all weakening his position. He is still ahead in opinion polls, but the gap is narrowing.

So the launch of a vast new health insurance scheme on Sunday is a "clear electoral pitch" to India's poorest citizens, on whose support he depends, says Hugh Tomlinson in the Times. "Modicare", which is set to cost $1.6bn a year, is designed to help the poorest 40% of India's 1.3 billion population. But questions remain over whether it will work and how much it will cost. Opposition parties say citizens will soon see it for what it is: nothing more than "naked electioneering".

Emily Hohler

Emily has worked as a journalist for more than thirty years and was formerly Assistant Editor of MoneyWeek, which she helped launch in 2000. Prior to this, she was Deputy Features Editor of The Times and a Commissioning Editor for The Independent on Sunday and The Daily Telegraph. She has written for most of the national newspapers including The Times, the Daily and Sunday Telegraph, The Evening Standard and The Daily Mail, She interviewed celebrities weekly for The Sunday Telegraph and wrote a regular column for The Evening Standard. As Political Editor of MoneyWeek, Emily has covered subjects from Brexit to the Gaza war.

Aside from her writing, Emily trained as Nutritional Therapist following her son's diagnosis with Type 1 diabetes in 2011 and now works as a practitioner for Nature Doc, offering one-to-one consultations and running workshops in Oxfordshire.