India government says ally's exit won't derail reforms

India's government insisted Wednesday it has the votes to steer major economic reforms through parliament as ministers from the second biggest party in the coalition handed in their resignations.

"These bills are necessary to take the country forward. I am confident that on the merit of the bills, political parties will come out and support the government," Finance Minister P. Chidambaram told a press conference.

Chidambaram was speaking the day after the Dravida Munnetra Kazhagam (DMK) party announced it was pulling out of the Congress-led government over its perceived failure to condemn alleged atrocities against Tamils in Sri Lanka.

The DMK, with 18 members of parliament, is based in the southern state of Tamil Nadu and depends on Tamil voters who have close ties to their counterparts in Sri Lanka.

The pullout led to a slide on the stock market amid fears the pullout could delay government efforts to introduce more pro-market reforms at a time when the economy is stuttering.

Speculation that the DMK could have a last-minute change of heart ended Wednesday when all its five ministers arranged a meeting with Prime Minister Manmohan Singh to formally hand in their resignations.

"The ministers are going to submit their resignations. It is just a matter of time and process," DMK leader T. M. Selvaganapathy told AFP.

Three of the ministers handed in their resignations at a lunchtime meeting and the other two were due to meet Singh later in the day.

The DMK's exit from the coalition less than a year before India is due to go to the polls means the government, which had already lost its parliamentary majority, is even more vulnerable to a vote of no confidence.

But Parliamentary Affairs Minister Kamal Nath, speaking at the same press conference, dismissed the possibility of early elections.

"This question (of early elections) is not correct at all," Nath said.

The government's prospects improved on Wednesday when the leader of the Uttar Pradesh-based Bahujan Samaj Party vowed to continue supporting it from the backbenches.

"We will continue to support the government from outside but not be part of it," Mayawati, who only uses one name, was quoted as saying by the Press Trust of India news agency.

The government wants to pass a series of bills in the current session, including ones opening the insurance and pension sectors to foreign investment and making the land acquisition process easier for businesses.

On Tuesday the lower house of parliament approved a bill toughening punishments for sex offenders.