Indian Prime Minister Manmohan Singh (2L), chief of India’s ruling Congress party Sonia Gandhi (R) and Finance Minister Pranab Mukherjee after the United Progressive Alliance (UPA) meeting in New Delhi. — Photo by AFP
Indian Prime Minister Manmohan Singh (2L), chief of India’s ruling Congress party Sonia Gandhi (R) and Finance Minister Pranab Mukherjee after the United Progressive Alliance (UPA) meeting in New Delhi. — Photo by AFP

NEW DELHI: Indian Finance Minister Pranab Mukherjee, under fire for his handling of the faltering economy, is to step down after being named on Friday as the ruling coalition’s candidate for president.

The United Progressive Alliance (UPA) government, led by Mukherjee’s Congress Party, announced that the 77-year-old would be its nominee for the largely ceremonial post, which falls vacant in July.

The choice of who will succeed the incumbent president, Pratibha Patil, has exposed fresh cracks in the increasingly fractured coalition, with its partners clashing over which candidate to put forward.

“The UPA appeals to all political parties and all members of parliament and members of state legislative assemblies to support the candidature of Pranab Mukherjee,” Congress Party supremo Sonia Gandhi said in a statement.

The nomination means Mukherjee, a political troubleshooter whose popularity cuts across party lines, will have to resign as finance minister, with television reports suggesting he might do so on June 24.

Although the president is India’s titular head of state, real executive power resides with the prime minister and the cabinet.

Indian presidents are selected by an electoral college comprising MPs from both houses of parliament and state legislatures.

The election will be held July 19.

Mukherjee’s nomination comes at a time of growing criticism of his stewardship of Asia’s third-largest economy, which has slowed dramatically at a time of stubbornly high inflation and a depreciating rupee.

“I don’t think that I am the depository of all knowledge and expertise in our government. In our party there are a number of people who can handle the difficult economic situation,” Mukherjee told reporters after his nomination.

“The prime minister himself (Manmohan Singh) is an eminent economist and under his stewardship we will overcome the temporary crisis.”

In the January-March period, the economy grew just 5.3 percent, its slowest quarterly expansion in nine years.

Earlier this week, Standard & Poor’s warned India could be the first of the BRIC emerging economies to lose its investment-grade rating unless the Asian giant revives its growth and spurs reforms.

In April, the firm changed India’s credit outlook to negative from stable, maintaining India’s rating at “BBB-” but warning it faced at least a one-in-three chance of losing its status if its public finances worsened.

“BBB-” is just one notch above “junk”, which carries an increased risk of default and would see India having to pay higher interest rates on its public borrowing.

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