PM keeps key ministers; fresh focus on rural vote

NEW DELHI Wed Jul 13, 2011 12:15am IST

Newly inducted cabinet members pose for pictures with Prime Minister Manmohan Singh and President Pratibha Patil after the swearing-in ceremony of the reshuffled cabinet at the presidential palace in New Delhi July 12, 2011. REUTERS/B Mathur

Newly inducted cabinet members pose for pictures with Prime Minister Manmohan Singh and President Pratibha Patil after the swearing-in ceremony of the reshuffled cabinet at the presidential palace in New Delhi July 12, 2011.

Credit: Reuters/B Mathur

Related Topics

NEW DELHI (Reuters) - Prime Minister Manmohan Singh retained key allies in a cabinet reshuffle on Tuesday, shunning big changes in a bid to hold onto power amid charges of graft and policy paralysis.

In his second cabinet revamp this year, the beleaguered prime minister shied away from his pledge of a major shakeup, choosing instead to focus on gaining rural support ahead of 2012 state elections.

He retained his influential but often troublesome finance and interior ministers, a sign that stalled economic and political reforms were unlikely to be fast-tracked soon.

Tweaks to the government were seen as an attempt to remove some underperforming ministers and prepare the ruling Congress party for a key election in Uttar Pradesh next year, India's largest state with some 200 million people, a vote seen as setting the stage for a national election in 2014.

"I don't think it is a big-ticket change. I mean there have been some changes at the margin. It could be that part of this exercise is with an eye on the U.P. elections," said Sonal Verma, a Mumbai-based economist at Nomura, who still expected some economic reforms in the near-term.

The Congress party-led government has repeatedly promised new policies, including opening the retail sector to foreign investment, simplifying the taxation structure and land acquisition laws.

Singh did recently cut fuel subsidies, a sign that the government can push difficult decisions it if so wishes.

Bond and stock markets in Mumbai did not react to the reshuffle as those ministers who handle one of the world's fastest growing emerging markets were kept in their posts.

Singh was quoted by local media as saying that this would be the last reshuffle before the national election in 2014.

But hours after the swearing-in ceremony, Gurudas Kamat, a newly appointed cabinet minister in charge of drinking water and sanitaion, resigned. Media reports said he was asked to quit after voicing disappointment over his new portfolio.

MAVERICK MOVED ON

In one surprise appointment, the maverick Jairam Ramesh was moved to the rural development ministry from environment, a change expected to be welcomed by business.

As environment minister Ramesh held up multi-billion-dollar investments into the steel, infrastructure, mining and power sectors by strictly enforcing green laws, displeasing big business and worrying investors.

Ramesh is believed to be close to Congress president Sonia Gandhi, the power behind the government, but has had differences with the prime minister.

The rural development ministry, which looks after an expensive job guarantee scheme popular with the poor, is central to the ruling party's strategy to keep its rural voter base.

Singh is likely to face a hostile monsoon session in parliament from Aug. 1 when opposition parties are expected to press the government on corruption and inflation, currently the highest in any major Asian economy.

Voter discontent in India has steadily grown after one corruption scandal after another have embroiled the government. The former telecoms minister is under arrest over accusations of taking bribes in a scandal that may have cost the state $39 billion in lost revenues.

Left-of-centre Congress has traditionally relied on the rural poor for votes and the tweaks in the cabinet suggest Gandhi wants to ensure the recent scandals, coupled with soaring inflation will not lead to a loss of support in coming years.

(Additional reporting by Abhijit Neogy in New Delhi; Editing by Daniel Magnowski and Yoko Nishikawa)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Market at Record

Market at Record

Sensex, Nifty hit record highs; reforms outpace hawkish Fed.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Samsung Results

Samsung Results

Smartphone woes drag Samsung Elec Q3 profit to more than 3-year low.  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage