Asia St: Why India’s New Cabinet Reshuffle Matters

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Why India’s New Cabinet Reshuffle Matters

July 8, 2021

The BGA India Team, led by Managing Director Ratan Shrivastava, recently wrote an update to clients on India’s latest cabinet reshuffle. The update addressed some of the key changes as well as the potential implications for clients and other relevant stakeholders.

Context

(Photo Credit: Indian Prime Minister Narendra Modi’s Twitter Account).

The reshuffle constitutes major overhaul of India’s Union Cabinet and is the first Cabinet expansion of Prime Minister Narendra Modi’s second term. The Cabinet has been revamped with the induction of 43 ministers, including several new entrants to the Cabinet and existing ministers who have been reassigned new portfolios. The Cabinet reshuffle is arguably the biggest for this government to date and the third-largest Cabinet since 1990.

The sweeping changes targeted individual ministries as well as some key sectors. Some high-profile ministers have been dropped from the Cabinet — including the union ministers for Law; Information Technology; Environment; Information and Broadcasting; and Health. Newer, younger leaders with administrative experience have been introduced, including technocrats and sector experts.

Significance

The overall focus of this expansion and reshuffle signals the government’s push for quicker reforms. Economic reforms have been stalled in the last year and half due to the pandemic, and the government intends to advance social agenda items such as education reforms and digital connectivity. There is also an effort to bring in state-level leaders including past chief ministers, increase the representation of women and shore up representation from socially and economically underprivileged communities.

More broadly, the reshuffle could signal a course correction in response to the government being perceived as not doing enough. This would explain why efficiency and governance seem to have taken center stage with the induction of new ministers and professionals.

 Implications

The reshuffle could see changes in individual ministries as well as collaboration between them to promote greater efficiency in reform and governance. Of particular note is the effort to synergize various ministries with overlapping domains, with a case in point being Piyush Goyal who will handle the Ministry of Textiles in addition to the Ministries of Commerce and Industry to bring synergies between ministries that are export-oriented, deal with trade policy and are among the biggest employment-generating ministries.

The reshuffle constitutes an important data point ahead of key state assembly elections lined up next year. For instance, the fact that the new Cabinet also includes a number of ministers from the east and the northeast regions apart from Uttar Pradesh, with ministers from Assam, Manipur and Tripura and four from West Bengal sworn in, indicates that the region remains a political priority for the Bharatiya Janata Party in the coming years.

BGA will continue to keep you updated on new developments as they occur. If you have any questions or comments, please reach out to BGA India Managing Director Ratan Shrivastava at ratan@bowergroupasia.com.