The Nehru-Gandhi dynasty has been a force in Indian politics since independence

As India’s new cabinet was sworn in, the biggest applause was reserved for one of its youngest members, Agatha Sangma, who is all of 28.

She was among several young faces who were brought into government by the Congress party to inject a sense of freshness and energy after its resounding poll victory.

But every single one of them belongs to political families.

Political nepotism appears to be a trend that isn’t abating but seemingly spreading beyond the influential Nehru-Gandhi dynasty to a handful of clans across India.

So the formation of the new cabinet was held up because the chief of the southern Dravida Munnetra Khazagam (DMK) party wanted posts for his children and members of his extended family.

Even the smaller parties are often family fiefdoms with parents handing over the reins to their children.

‘Subverting democracy’

It’s not a guarantee that just because you have a political background things will be easy for you Agatha Sangma

Jiten Jain who runs Youth For Equality, a political advocacy group, says increasingly politics is being seen as a lucrative business.

“Sons, daughters, relatives are becoming MPs. This is disturbing. You are moving towards a monarchy where one constituency is ruled by one family and 500 families will rule India.”

Youth for Equality put up a candidate in the election but she was routed by her better-funded opponent from a well-known political family.

“There are three to four political families that have five to six ministers in the cabinet. Except for one or two, none of them have worked in the social domain, none of them have any political experience. They have just come with the name of their fathers and grandfathers and got elected,” he says.

It’s not the voters who are at fault.

Vir Sanghvi, editor of the Hindustan Times newspaper says the parties are simply subverting democracy and freezing out the people.

“Often the voters are given two or three choices and all of those choices are dynasts. The internal democracy that we should be seeing in parties is almost entirely missing.

“So while there may be democracy when it comes to elections there is no democracy within parties. It’s almost always the dynasts who get nominated,” he says.

The young political beneficiaries of this trend argue that they have earned the right to be here.

Agatha Sangma, who is the daughter of a former Speaker of parliament, accepts that a political background, especially at a young age, is a huge advantage but it’s not enough to succeed.

“It’s not a guarantee that just because you have a political background things will be easy for you. It gives you an initial advantage but after that you have to be able to perform and only that will determine your political future,” she says.

Family business

So at a time when India is emerging as a major international player, the world’s largest democracy and an economic giant whose companies are at the forefront of global buy-outs - what can explain this apparently regressive step?

Priyanka Gandhi (left) is often urged to join her brother Rahul in politics

“It’s an extremely profitable business, people who become ministers tend to make a lot of money,” says Vir Sangvi.

“There’s also a sense, particularly in the smaller parties, that if you allow proper succession you lose control of the party. It’s much more tempting to run it like a family business.”

Then there’s the tradition in India of children, usually male but increasingly female, going into the family profession.

Sociologist Dipankar Gupta says that unlike their Western counterparts, middle-class Indians feel that they cannot afford to leave the family profession, be it medicine, law, or increasingly, politics.

“The gap between the rich and the poor is so large that nobody wants to risk sliding to the bottom of the social scale. And because of a shortage of avenues you need your parental help otherwise you’ll be at the bottom of the social rung.”

So why do the parties select people from political families?

Mr Gupta says it has to do with a vast system of patronage between the politicians and the parties where they both end up favouring each other often at the cost of ordinary people.

But for many, this is extremely worrying for Indian democracy.

“If this continues, you will have the emergence of a political caste - a sort of Brahminical caste. Indian democracy will cease to be participatory, it will cease to be a way of empowering people. To get elected to parliament you will have to be born into political families,” says Mr Sanghvi.

“The whole point of democracy in India is that poor people should be able to enter politics and change their lives.

“If there’s just going to be a class of new Brahmins who get elected because the peasants vote them into power, the consequences for India will be devastating.”

A cruise ship scare helped spike swine flu infections in Australia

The World Health Organization has said that a sharp increase in swine flu cases in Australia may push it to finally announce a flu pandemic.

It would be the first such pandemic announced in four decades.

More than 1,200 people have contracted the virus in Australia, a four-fold increase in a week.

Less than a month ago Australia had only a handful of cases of the H1N1 virus but it now has the highest number of infections outside North America.

Victoria and the state capital, Melbourne, are the worst-hit with more than 1,000 confirmed cases, although most of those affected are suffering only a mild illness.

There have been no swine flu fatalities in Australia.

But the Queensland Health Minister Paul Lucas has warned it was inevitable the contagious respiratory condition would claim lives.

Going global?

The rapid spread of swine flu in Australia could force the World Health Organisation to declare a pandemic, meaning the outbreak had gone global.

Australia’s new cases come with the onset of winter in the southern hemisphere

For that to happen, officials would have to verify that the disease had become established outside North America, where the crisis began.

As the number of H1N1 cases in Australia passes 1,200, Singapore has urged its citizens to avoid travel to Victoria.

Authorities in New South Wales and South Australia, as well as the national capital, Canberra, have told children who have recently travelled to Melbourne to stay away from school for a week on their return home.

The entire squad and staff of the Brisbane Broncos rugby league club have been put into quarantine as tests are carried out on a player suspected of contracting swine flu.

The U.S. Supreme Court on Tuesday cleared the way for the sale of Chrysler to a consortium led by Italian automaker Fiat.

On Monday, the Court had delayed the sale pending review of the merits of a case brought by the Indiana state pension funds, which argued that they and other lenders deserved better treatment by the bankruptcy court.

Chrysler’s asset sale was approved by a bankruptcy judge on May 31, just hours before the bankruptcy filing of General Motors (GMGMQ).

The bankruptcy judge overseeing the Chrysler case had given approval for the company’s most valuable assets, such as plants, dealerships and contracts, to become part of a new company in which Fiat would hold a significant stake.

Chrysler said in a prepared statement that the transaction is now expected to close “very shortly.”

“Chrysler LLC thanks the Courts for their expeditious work throughout this process,” the company said.

Indiana Treasurer Richard Mourdock had appealed the ruling of a federal bankruptcy court. Mourdock made his appeal on behalf of three pension funds — for Indiana teachers and state police, as well as a “Major Moves” construction fund. The funds hold about $42 million, or less than 1%, of Chrysler’s $6.9 billion debt.

“I am disappointed to have learned that the U.S. Supreme Court has lifted the stay in the Chrysler bankruptcy case,” Mourdock said in a statement released late Tuesday. “I have fought for Indiana’s retired teachers, retired state policemen, and Hoosier taxpayers. I have no regret for having done so and for having carried this case to the door step of the nation’s highest court.”

If the Chrysler deal goes through, Chrysler would sell its best assets — including its best-performing factories and dealerships — to a newly formed entity called the Chrysler Group.

The Chrysler Group would be controlled primarily by a United Auto Workers union trust, which will own a majority stake of 55%. Fiat will own 20% initially. Minority stakes would go to governments: 8% for the United States and 2% for Canada. Fiat’s stake will increase to 35% if it reaches certain goals.

Chrysler would leave behind the assets that it doesn’t want, including eight factories and franchise agreements with 789 dealerships, placing thousands of jobs in jeopardy.

To keep the company afloat, Chrysler received $4 billion from the Treasury Department in December and $4 billion more this year. But after many of the company’s creditors rejected a debt-for-equity swap to help the company restructure, the Obama administration forced the automaker to seek Chapter 11 bankruptcy protection.

“We are delighted that the Chrysler-Fiat alliance can now go forward, allowing Chrysler to re-emerge as a competitive and viable automaker,” the White House said in a statement issued after the Supreme Court order.

If the Supreme Court had agreed to take the case, it would have jeopardized the sale to Fiat and risked Chrysler’s ability to restart operations. Chrysler shut most of its operations a few days after its bankruptcy filing and has said that its factories would remain closed until it completed a deal with Fiat.

Filings from the company suggest that Chrysler’s distribution centers are already close to running out of parts needed by dealerships to perform regular maintenance on Chrysler, Dodge and Jeep vehicles.

In addition, it is estimated that Chrysler is losing $100 million for each additional day it has to spend in bankruptcy.

The U.S. Treasury has ruled that Chrysler is no longer viable as a standalone company and that it needs a partner to receive additional federal dollars it needs to continue to operate.

Former Chrysler President Tom LaSorda testified in bankruptcy court last month that the company sought combinations with all of the major global automakers and that Fiat was the only one interested in pursuing a deal.

The backdrop for the case by the Indiana pension funds is this: When a company goes bankrupt and must be liquidated, the secured creditors must be paid off completely before any of the unsecured creditors can recover a dime. (“Tough legal questions”)

The Indiana funds claim that the government-sponsored sale effectively gives unsecured creditors — the UAW — a recovery before secured creditors — the pension funds — have been fully paid, violating the fundamental rules of bankruptcy and amounting to an unconstitutional taking of their property.

Since there are $6.9 billion in bonds outstanding, the resulting payoffs to secured bondholders will be about 29 cents on the dollar. In fact, the Indiana funds are getting close to 72 cents on their dollar, according to Chrysler’s opposition papers, in that they purchased their face-value $42 million worth of bonds at a distressed price of just $17 million, and stand to recover $12.2 million of that under the planned sale. An attorney for the Indiana funds did not immediately return an e-mail seeking comment.

Edward Morrison, a bankruptcy law professor at Columbia Law School, said in an e-mail to Fortune that the New Chrysler appears to be paying a reasonable price for the Old Chrysler’s assets.

“This would have been a very different case if there were proof that the sale price is artificially low [and, therefore] . . . that the government is diverting wealth from the senior bondholders to the workers. But there’s not enough proof here. No other bidders showed up at the auction,” wrote Morrison.

In fact, according to bankruptcy judge Arthur J. Gonzalez, who oversaw the Chrysler bankruptcy and held a three-day hearing on the sale in late May, the value of Chrysler’s assets in liquidation would have only come to about $800 million, rather than the $2 billion in going-concern value that they’re fetching in the sale. Accordingly, secured creditors, including the Indiana pension plans, are doing better in the sale than they could have done otherwise.