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Graft probe accuses top officials in Indian state
India's Hindu nationalist party hit by bribery scandal, asks top elected official to resign
By The Associated Press

NEW DELHI (AP) ' The Hindu nationalist Bharatiya Janata Party on Thursday asked its top elected official in a key Indian state to resign after an anti-corruption panel indicted him in a multibillion-dollar bribery scandal involving granting of mining contracts.

The BJP, the main national opposition party and the ruling party in Karnataka state, is the latest to be hit by corruption controversies. The country's ruling Congress party has been mired in a slew of corruption scandals ' from the hosting of last year's Commonwealth Games to handing out cellular licenses in 2008.

B. S. Yeddyurappa, the chief minister of Karnataka state, was meeting with his supporters in the state capital and was expected to step down. Bangalore, the Karnataka state capital, is India's key information technology hub.

"Yeddyurappa has been asked to resign and a new leader will be chosen in his place," BJP spokeswoman Nirmala Seetharamam told reporters in New Delhi on Thursday.

The anti-corruption panel recommended that lawmakers and hundreds of government officials be prosecuted on charges of bribery for handing out mining contracts in southern India, the Press Trust of India news agency reported.

The three-member investigation panel, headed by retired Judge Santosh Hegde, found that the top elected official of Karnataka state, several ministers and opposition lawmakers also violated environmental laws.

The recommendations were sent to the federally appointed governor of Karnataka on Wednesday.

Huge mining interests are owned or controlled in Karnataka state by several senior state politicians.

The Indian Express newspaper said the loss to the state exchequer between 2006 and 2010 from illegal mining and iron ore exports has been estimated around 168 billion rupees ($3.3 billion).

Meanwhile, India's Cabinet on Thursday approved draft legislation for setting up an anti-corruption watchdog. It, however, rejected a key demand by rights activists that the prime minister and the judiciary be within its purview.

Salman Khurshid, India's law minister, told reporters that the watchdog could investigate corruption allegations after a prime minister left office and that a separate law could probe corruption charges against the judiciary. The proposed law would cover ministers, lawmakers and bureaucrats.

Rights activist Anna Hazare has threatened to resume a hunger strike next month if the government did not enact strong legislation for the watchdog.

He ended a four-day hunger strike in April after the government set up a committee to draft the legislation. He is expected to react later Thursday after consultations with his supporters.

Khurshid said the draft law would be introduced in Parliament for approval when it meets next week for its monsoon session.

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