The governing Congress Party received another boost on Thursday when a faction of a small left-leaning party merged with it, giving Mr Rao a two-seat majority in the 528-member lower house of parliament. Mr Singh offered to step down after an all-party parliamentary investigation criticised the finance ministry for failing to anticipate and check the securities scandal.
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NEW DELHI (AP) - The Prime Minister, P V Narasimha Rao, tore up his finance minister's resignation letter yesterday, ending a cabinet crisis over a pounds 1.2bn securities scandal. An official in Mr Rao's office said the premier wrote to Manmohan Singh, architect of India's economic reforms, rejecting the resignation he submitted last week.