India begins quizzing former minister over telecoms row

NEW DELHI Fri Dec 24, 2010 2:51am EST

NEW DELHI Dec 24 (Reuters) - Indian federal agents questioned a former telecoms minister over the country's biggest corruption case on Friday, a move the government hopes will help ease a crippling political row with the opposition.

Andimuthu Raja is being investigated over his role in the sale of telecoms licences, which a government audit says may have been given too cheaply to ineligible firms in 2007-8, causing a potential government revenue loss of $39 billion.

The row has led to the most serious political standoff in recent times in India with an assertive opposition disrupting the last session of parliament which ended this month, demanding a joint inquiry which would have the power to summon the prime minister for questioning.

The standoff has put policymaking in limbo and economic reforms have been delayed in Asia's third-largest economy.

R.K. Gaur, spokesman of the Central Bureau of Investigation (CBI), said Raja was being questioned at the agency's New Delhi office.

Although there is little threat to the Congress party-led government, a series of scandals has eroded its image since an impressive election victory last year and has become a test of how Prime Minister Manmohan Singh tackles widespread corruption.

Raja, a member of the DMK party from south India which is a key member of the coalition, denies any wrongdoing.

Corruption is widespread in India and prosecutions are rare, particularly of high government officials or political leaders.

The world's second-fastest growing major economy ranks 87th on graft watchdog Transparency International's list based on perceived corruption -- a worse rating than rival China.

India's Supreme Court had criticised the CBI for not questioning Raja in its year-long investigation despite him being at the centre of the inquiry.

The country's top court has also dragged the prime minister into the scandal by forcing him to answer questions on why he was slow to act against Raja. (Writing by Krittivas Mukherjee; Editing by Nick Macfie)