Manmohan to reshuffle cabinet amid graft, inflation

Manmohan to reshuffle cabinet amid graft, inflation

New Delhi: Prime Minister Manmohan Singh will reshuffle his cabinet on Wednesday in a mid-term effort to refresh a coalition government snared by corruption scandals and year-high food inflation as it faces key state elections.

The reshuffle, which could show the direction the government will take either to back reformist ministers or bow to political expediency and pressure from industry, is due to be announced at 5p.m., according to 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 controversial reformists, such as environment minister Jairam Ramesh.

A tide of anger over corruption and prices of basic foods like vegetables threatens to strain the coalition’s ties with its increasingly worried party allies in the run-up to important state elections this year and a general election due by 2014.

The credibility of the Prime Minister, who is otherwise regarded as an epitome of honesty, is also under threat because of his inability to deal with graft scams and the high food inflation.

Reelected in 2009, his government managed to shield the country from the worst of a global downturn, and its economy is heading for growth of nearly 9% in the fiscal year ending this 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 economic 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 story, 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 recent poll showed voter discontent with Congress party would 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.

Environment minister

The fate of outspoken Ramesh may show how much Singh will back a minister seen as a reformist who has been criticised in business and political circles for blocking major industrial projects over green concerns.

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