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India names new finance, power ministers

India's Home Minister Palaniappan Chidambaram attends a South Asian Association for Regional Cooperation (SAARC) interior ministers meeting in Islamabad in this June 26, 2010 file photo. -Reuters Photo

NEW DELHI: Indian Home Minister P. Chidambaram was switched to the finance portfolio on Tuesday in a reshuffle that also saw the power minister promoted as a massive electricity failure struck the country.

The president's office announced that Chidambaram would begin his third stint as the head of the finance ministry, where he will be charged with re-firing India's spluttering economy.

He will be replaced at the home ministry by Power Minister Sushilkumar Shinde, who spent Tuesday tackling an unprecedented electricity outage that saw supplies fail in half the country, affecting more than 600 million people.

“There has been a small reallocation of portfolios,” a senior official in the premier's office, Sharat Chandra, told AFP.

The son of a cobbler from the low-caste community, Shinde is a former police inspector who rose to become chief minister of the huge and politically vital western state of Maharashtra, home to commercial capital Mumbai.

He is seen as a staunch loyalist to the Gandhi family, which dominates the ruling Congress party, and has passed ahead of rivals to grab one of the biggest jobs in the government despite having a previously low public profile.

The opposition Bhartiya Janata Party (BJP) criticised the changes and there was incredulity on Twitter, where many users questioned the timing of his promotion.

“There is nothing much here to be lauded,” BJP spokesman Prakash Javadekar told AFP.

The power portfolio will be added to the responsibilities of M. Veerappa Moily, the current minister of corporate affairs, who will have to tackle an electricity crisis that has deeply embarrassed the government.

Early on Monday, the northern grid collapsed shortly after 2:00 am in the worst blackout in a decade. On Tuesday, this network and two others in eastern India also failed as problems escalated.

The finance portfolio is currently being handled by Prime Minister Manmohan Singh, who took over from former finance minister Pranab Mukherjee when he resigned last month to run for election to become India's president.

Chidambaram was praised by economists for his pro-business budgets during his previous stints as finance minister, although he faced brickbats from left-wing parties for his pursuit of foreign investment.

Seen as a safe pair of hands by the ruling Congress party leadership, the former lawyer was asked to take over the home ministry after the 2008 Mumbai attacks, which killed 166 people and left India reeling.

India's once-booming economy grew just 5.3 per cent between January and March, its slowest annual quarterly expansion in nine years, and the central bank issued new gloomy predictions on Tuesday.

The Reserve Bank of India slashed its GDP growth forecast for this financial year to April 2013 from 7.3 per cent to 6.5 per cent, while predicting that inflation at the end of the year would be higher than previously forecast.

Analysts have begun talking about India suffering from “stagflation” -- stagnant growth but high inflation -- and the government has been widely criticised by business groups for failing to introduce pro-market reforms.

There was no place in the cabinet for political pin-up Rahul Gandhi, scion of the Nehru-Gandhi dynasty, who had recently indicated he was ready to play a bigger role in politics.

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