India’s Cabinet “Face-lift”

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Washington, DC – On November 1, Prime Minister Manmohan Singh of India called a rare meeting with his newly assembled team of Union Council of Ministers. The meeting was expected to set the tone for the next year, as well as highlight the need to push through legislation that has been sitting idle since the disrupted monsoon session of Parliament. India’s central government has been the focus of intrigue and attention in the past year—for corruption scandals, policy confusion, shuffling of important portfolios, and once again, pushing economic reforms.

With general elections looming, Prime Minister Singh made news last week with a cabinet reshuffle aimed at moving economic reforms forward while simultaneously introducing fresh faces, all in the hopes of improving the Congress Party’s appeal to voters.

Many of India’s news outlets labeled the reshuffle a “face-lift”—India’s ruling class is much older than the vast majority of its citizens (66 percent are under 35). Twenty-two ministers were sworn in on Sunday, and the new cabinet is meant to be a mix of experience and youth.

The most talked about position in the lead-up to the reshuffle was that of Rahul Gandhi. Expected to be the Congress Party candidate for prime minister in the upcoming elections, some thought he would be given a senior government position. However, despite pressure from Prime Minister Singh and segments of the Congress Party to join the government, Gandhi has chosen to remain in the organizational side of the Congress Party, even though a number of his close associates were given cabinet-level positions.

Some highlights of the cabinet reshuffle follow:

–  External Affairs: Salman Khurshid replaces S.M. Krishna. India’s foreign policy could see some changes under his leadership. Prime Minister Singh promoted him from the Ministry of Law to External Affairs, one of the three most important ministries. Khurshid hails from India’s minority Muslim community, and some speculate his heritage could play a contributing role in India’s recent outreach efforts with regional Muslim-majority countries, including Pakistan, Bangladesh, and the Gulf states.

Khurshid was also recently put in the spotlight by anticorruption crusader Arvind Kejriwal for alleged misuse of funds from a nongovernmental organization run by his family. Nevertheless, Singh promoted him, indicating his confidence in Khurshid.

–  Telecom: Kapil Sibal had held this position in conjunction with the human resource development portfolio. Sibal will now focus on the telecommunications sector and will be watched closely for his handling of the November auction of 2G spectrum.

–  Corporate Affairs: Sachin Pilot takes over this portfolio, having recently served as minister of state, communications, and information technology. A close associate of Rahul Gandhi, and one of the rising stars in the Congress Party, Pilot takes the helm in time for deliberations on a new Companies Bill.

The Companies Bill has been discussed for two decades and is supposed to be brought before Parliament in this winter session. Speaking about the bill, Prime Minister Singh explained, “We must build a climate that attracts investment and encourages and rewards innovation, and establish fair and effective regulatory institutions and also legal processes. Above all, we have the responsibility to ensure probity, transparency and accountability in processes of governance.” The bill is part of the push to make India more attractive to foreign investors, after a difficult year.

–  Human Resource Development: M.M. Palam Raju was most recently minister of state for defense and now takes charge of the Human Resource Development (HRD) Ministry. He will likely oversee educational reforms undertaken by former HRD minister Kapil Sibal and further implementation of the Right to Education Act (2010).

Raju faces a huge task in increasing India’s general enrollment ratio and increasing the quantity and quality of both K-12 and higher education throughout the country. Many hope that he might be able to nudge the Foreign Educational Institutions Bill through Parliament.

–  Minister of State for Power: Jyotiraditya Scindia is another rising star in the Congress Party and has been brought in to take on the challenge of chronic energy shortages after India’s worst blackout in July of this year. Unreliable power supply is one of the most prominent constraints for doing business in India, according to the World Bank. Scindia, who has a background in commerce, industry, and telecommunications, ostensibly has an appreciation for the connection between India’s energy supply and economic growth.

–  Petroleum: Veerappa Moily will be in charge of ensuring reasonable prices for petrol, diesel, and cooking gas, while trying to decrease government subsidies on these items. Recent reforms saw a cut in the subsidy for diesel, but Finance Minister P. Chidambaram has called the current subsidies unsustainable, so perhaps there are further cuts on the horizon.

–  Railways: Pawan Kumar Bansal takes over the portfolio after Chief Minister Mamata Banerjee pulled her support for the coalition, thereby relinquishing control of the ministry to Congress in the lead-up to elections and keeping this very important portfolio “in house.”

Bansal takes over the ministry at a time when India’s extensive railway system is increasingly being labeled as underfunded and dangerous. When former minister of railways Dinesh Trivedi attempted to raise revenue by increasing ticket fares, he was quickly pulled from office.

Though Prime Minister Singh called the reshuffle the final one of the United Progressive Alliance’s current term, reorganization within the Congress Party itself is expected in order to prepare for the 2014 elections.

Rahul Gandhi will no doubt be instrumental in organizing the young, rising stars within the party for leadership positions. That reorganization will likely result in its own face-lift, projecting an image that corresponds more closely with the demographics of India, a country in which the vast majority are under 35 and half are under 25.

© 2012 by the Center for Strategic and International Studies. All rights reserved. 

Persis Khambatta
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Persis Khambatta is a fellow with the Wadhwani Chair in US-India Policy Studies at the Center for Strategic and International Studies in Washington, DC.

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