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Indian PM Manmohan Singh readies cabinet reshuffle

Text by News Wires

Latest update : 2011-01-19

Indian Prime Minister Manmohan Singh is expected on Wednesday to reveal changes to his cabinet, which has been under fire battling multiple corruption scandals and public anger over rising food prices.

REUTERS - Indian Prime Minister Manmohan Singh will reshuffle his cabinet on Wednesday in a mid-term effort to refresh a coalition snared by corruption scandals and year-high food inflation as it faces keystate elections.

The reshuffle could show the direction the government will take either to back reformist ministers or bow to political expediency and pressure from industry. It is due to be announced at 5 p.m. (1130 GMT), according to government sources.

Singh may make cosmetic changes to smaller ministries, bringing in younger politicians to invigorate the government's image. Or he could make major changes with some contested reformists, such as Environment Minister Jairam Ramesh.

A tide of anger over corruption and prices of staples threatens to strain the Congress Party's ties with its increasingly worried party allies in the run-up to state elections this year and a general election due by 2014.

If Singh, 78 and founder of India's economic reforms, opts to clean up the government's image, he may dump Sports Minister M.S. Gill, criticised for overseeing a Commonwealth Games ridden by corruption scandals.

The removal of the outspoken Ramesh, criticised in business and political circles for blocking major industrial projects over green concerns, may show Singh is setting growth and jobs as priorities over the environment in a possible vote-winner.

But it may backfire for Singh, whose legacy is under threat from an inability to deal with graft scams and the highest food inflation of any major Asian economy.

If he makes only minor changes, it may fuel a perception that he is lost for ideas after failing to push big ticket reforms like freeing up diesel prices and streamlining taxes, or measures to contain inflation and clamp down on graft.

"What he wants to do is give a sense that he is in control and not weak-kneed," said analyst Paranjoy Guha Thakurta. "But I don't think he will succeed because there is a distinct impression that the government is in a state of paralysis."

Industry voices concern

Re-elected in 2009, his government shielded India from the worst of a global downturn, and its economy is heading for growth of nearly 9 percent in the fiscal year ending in March. But reforms seen as key to making that growth sustainable to compete with China have been in limbo, while inflation and graft have overshadowed the boom.

A group of 14 public figures, from industrialists to former central bank governors, warned this week in an open letter that corruption and bad governance threatened India's growth, a sign scandals were reaching a tipping point for civil society.

"We are alarmed at the widespread governance deficit almost in every sphere of national activity covering government, business and institutions," said the letter, quoted in the Hindustan Times.

A poll this month showed voter discontent with the Congress party could result in a loss of 40 seats in a general election which would threaten its majority and damage its ability to form a working coalition government.

Cabinet vacancies have been created by the resignations of Shashi Tharoor as junior foreign minister and Andimuthu Rajaas as telecommunications minister. Raja, from the Congress's regional DMK ally, quit over his link to a $39 billion telecoms scam.

Several elderly and powerful ministers have been accused of scuttling new thinking in government and frustrating efforts toward faster reform, such as opening up the retail sector.

Date created : 2011-01-19