April 19, 1999
Web posted at: 2:10 a.m. EDT (0610 GMT)

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MUMBAI, India (CNN) -- Sonia Gandhi, widow of former prime minister Rajiv Gandhi, faced a new battle Monday in her effort to lead the Indian government.

Congress party lawmakers were scheduled to meet early Monday to discuss efforts to create a new government, one day after a hardcore Hindu party in India's defeated coalition government said that Italian-born Gandhi had no right to rule the country because she is of non-Indian descent.

Gandhi and other leaders are strugging to develop a new government following the stunning defeat of Prime Minister Atal Behari Vajpayee's 13-month-old coalition government. Vajpayee lost a confidence vote in parliament on Saturday by one ballot.

Some analysts say it is not clear whether Gandhi, head of the Congress party which led the raft of leftist and regional parties in the vote against Vajpayee, has enough support to become the new prime minister.

Adding urgency to the task of constructing a new government, was the danger of economic deterioration if the country's political disarray continues.

Leaders of all parties, including the ousted coalition, were concerned about the fate of the nation's budget.

India's budget for 1999/2000 (April-March) was rescued on Monday after the Congress party said it would cooperate to get parliament's approval for the Finance Bill drawn up by the previous government.

"The budget will be passed. We have decided to cooperate," Congress leader Sharad Pawar told reporters after an all-party meeting on Monday. The party said it would not insist on any amendments to the investor-friendly bill, and the new government formed could introduce changes later.

The budget, presented on February 27, must be approved by May 13. Otherwise, the bill would lapse and old tax rates of the 1998/99 budget would come back into effect.

News of the government collapse on Saturday sent Bombay's benchmark stock index plunging by nearly seven percent. Dealers said they expected further losses on Monday.

"A foreigner like Sonia Gandhi cannot become PM (prime minister)," Subhash Desai, general secretary and a senior leader of the right wing Shiv Sena party, told Reuters.

"I don't want to say anything about our future plans. Let them make her the PM, then we will show them our strength," said Desai, whose party is known for its violent tactics.

"A country like India with a huge population has many leaders who can run this country. We don't want an Italian prime minister," Desai said.

The Shiv Sena is an ally of Vajpayee's Bharatiya Janata Party in the western state of Maharashtra and its six lawmakers supported New Delhi's coalition.

With 141 seats in the 545-member lower house, Congress is the second largest party after Vajpayee's BJP, and Congress leaders expect President K.R. Narayanan to invite them to take the first shot at forming the government.

Sonia, as she is popularly known, is the widow of assassinated premier Rajiv Gandhi. Born Sonia Maino in a middle class Turin business family in 1946, she studied English at England's Cambridge university, where Rajiv also studied.

She married Rajiv in 1968 and acquired Indian citizenship in the early 1980s. Mother of a son and daughter, she speaks Hindi with an Italian accent.

The Gandhi family, descending from India's first Prime Minister Jawaharlal Nehru, has ruled the country for most of its years since independence in 1947.

Nehru's daughter Indira Gandhi was the second longest-serving prime minister and when she was assassinated in 1984, her son Rajiv Gandhi stepped in.

Sonia stayed out of public life but the pressures of being a member of the dynasty pushed her into prominence when Rajiv was himself assassinated in 1991.

She has taken an active role only since last November when her presence galvanised the Congress party, which won handsomely in provincial elections.

The prospect of fresh elections, India's third in as many years, loomed as signs emerged that Gandhi might fail to pull the raft of leftist and regional parties into a new alliance, or convince them to prop up a minority Congress government.

Analysts said it was far from certain whether the centrist Congress party, led by Gandhi, could drum up enough support from the fragmented ranks of parliament to rule.

With its rivals in disarray, the outgoing coalition argued that the president could use trends in Italy as a precedent and give Vajpayee a second chance to rule or forge a new majority.

"The country is heading towards mid-term elections. Go and prepare for mid-term elections," Vajpayee told a gathering of workers of his Bharatiya Janata Party (BJP).

Congress party leaders said they expected President K.R. Narayanan to invite them to take the first shot at forming a government, the country's sixth since 1996.

"We don't want to act without that initiative from the president," said party spokesman Arjun Singh.

Gandhi had been expected to meet a key regional leader, Jayaram Jayalalitha, on Sunday to put together the first pieces of a possible coalition.

But by late evening, the meeting had still not taken place.

Jayalalitha, a mercurial former movie actress,triggered the vote by pulling her southern party out of the coalition.

The Congress party has a tough task in wooing leftists who dislike its economic reforms nearly as much as the BJP's Hindu nationalism.

Seven deputies from the Revolutionary Socialist Party and Forward Bloc parties were adamant that they would not support Congress.

The Tamil Maanila Congress party said it would have no part of a government which included Jayalalitha's deputies, its rivals.

Another party, the Bahujan Samaj Party (BSP), said it saw the possibility of early elections. The BSP sealed the government's fate on Saturday by reneging on a promise to abstain in the vote.

Despite their disagreements, many of the parties agreed to cooperate in salvaging the nation's budget.

The President asked Vajpayee to seek consensus from the parties to pass the budget.

Narayanan told Vajpayee that opposition leaders were willing to cooperate, a spokesman for the outgoing prime minister said.

Once the budget is out of the way, Narayanan is expected to invite the main opposition Congress to take the first shot at forging a new government, Congress leaders said.

Reuters contributed to this report.

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