India rail minister quits in cash-for-job scandal

India's railways minister resigned on Friday following accusations his nephew took $160,000 in a bribe from an official in return for a plum post in the state-run network.

The exit of Railways Minister Pawan Bansal came as the future of the country's law minister, Ashwani Kumar, hung in the balance over a separate corruption scandal.

The resignation of Bansal is the latest setback to Prime Minister Manmohan Singh's scandal-tainted Congress administration, which the opposition has condemned as the "most corrupt" since independence.

"I have resigned," Bansal said after submitting his letter of resignation to the prime minister at his official residence in the national capital.

Bansal, a veteran member of the ruling Congress party, stepped down a week after police arrested his nephew, Vijay Singla, for allegedly extracting 900 million rupees ($160,000) from an official of the railway's policy-making board.

Bansal has denied any knowledge of his nephew's alleged activities but the opposition said it was impossible that he was not aware of them.

His resignation on what Indian news channel NDTV labelled "Black Friday" came hours after the ruling Congress, which must face voters in a general election in the first half of 2014, said it would not tolerate any corruption.

"It will not spare anybody mired in corruption.... If anybody is involved in manipulation, they cannot be spared," Congress spokesman Bhakta Charan Das told reporters.

Law minister Kumar's future is in major doubt over government interference in a federal police probe into the alleged illegal awarding of coal mines that cost the exchequer tens of billions of dollars.

Singh, in addition to being prime minister, was coal minister for part of the period under scrutiny, leading to opposition demands for him to also quit.

The government is still reeling from 2010 charges by the national auditor that cut-rate allocation of telecom spectrum may have cost the exchequer $31 billion. A total of 19 people, including a former minister, face trial over that scandal.

Earlier in the week, India's parliament was forced to adjourn early after the opposition stalled proceedings, demanding the resignation of both ministers over the scandals.

The early end to the session meant the government was unable to pass key reform legislation aimed at drawing more foreign investment and supplying heavily subsidised food to millions of the poor.

Congress officials are reported to be fearful the scandals will open the floodgates for the opposition to press hard for Singh's resignation.

Leading news magazine India Today in its latest edition asserted Singh was "fast becoming a prime embarrassment for the government" for failing to stem the tide of scandals on his watch.