NEW DELHI // The Indian government is scrambling for support ahead of a parliament session that will severely test its economic-reform agenda.
The government enters the session reduced to a minority for the first time since coming to power in 2004.
For the moment, there is no threat of the government falling. But an obstructive opposition and unreliable allies could mean there is little progress on reforms such as opening up insurance and pension businesses when parliament's month-long winter session begins today.
Manmohan Singh, the prime minister, has engaged in unusual dinner diplomacy with allies at his New Delhi home to build consensus on the next round of economic reforms, which need parliamentary approval.
Criticised in the past for cold-shouldering allies and opponents, Mr Singh also plans to dine this week with leaders of the main opposition Bharatiya Janata Party (BJP), whose obstructionist tactics washed out the last session. But analysts doubt he will manage to forge a consensus on the reforms. "If things go awry, and legislation gets deadlocked, it would be negative for markets and will mean those that were pessimistic on Indian reforms taking shape will be vindicated," said Suresh Kumar Ramanathan, the head of regional rates and foreign exchange market strategy at CIMB in Kuala Lumpur.
Analysts warn of a "nightmare scenario" in which the government loses a test vote in parliament on its flagship reform - opening up the retail sector to foreign supermarkets, a decision that has drawn fire from both opponents and allies who say it will destroy the livelihoods of small, corner-shop owners.
The reform does not require parliamentary approval. But left- and-right-wing opposition parties, with an eye to upcoming state and national elections, want to use the session to hold the government to account on the policy, which they say does not have popular support.
They are pushing hard for a symbolic vote against the measure. If the government lost the vote, it would be an embarrassing setback for a policy on which it has staked so much political capital.
It could also sap its political will to pursue more difficult reforms to cut high spending and reduce a ballooning budget deficit.
Most of the initiatives Mr Singh has announced have required only an executive order, so this session of parliament poses the biggest test yet of his reform drive. If he fails to get key allies and the BJP on board, his reformist agenda could stall.
Among the reform bills to be introduced are measures to allow up to 49 per cent foreign investment in local insurance companies and domestic pension funds. Currently, the cap for insurers is at 26 per cent and foreign investors are barred from buying into pensions.
