NEW DELHI, July 1: Indian Prime Minister Atal Behari Vajpayee carried out a major cabinet reshuffle on Monday whereby the foreign minister and the finance minister swapped their jobs in a move that may well have an impact on the way the ties with Pakistan evolve.

There could be a significance too in shifting Jaswant Singh to Sinha’s job as Singh was the first finance minister in Vajpayee’s brief government in 1996. As finance minister in the 13-day Bharatiya Janata Party administration the pro-West Singh signed a controversial deal with America’s Enron power company for a multi-billion dollar project in Dhabol.

US Ambassador Robert Blackwill has hinted strongly that settling the dues of the troubled company would be seen as a litmus test for India’s commitment to economic reforms.

Sinha, as finance minister, was among the rare Indian leaders to hold informal talks with his Pakistani counterpart during a tour of the United States when even seen talking with Islamabad was considered non kosher.

Yashwant Sinha, who swaps places with Jaswant Singh, said he expected the economic reforms to continue under new the finance minister and asserted better times are ahead for the economy. He will also team up with a new foreign secretary Kanwal Sibal.

“My message is good times are coming. We will do our best. The country is going to move forward much more strongly,” Sinha told reporters after the swearing-in ceremony in which 13 new ministers were inducted.

Sinha dismissed reports that the swap was aimed at pushing him out of the top economic spot because of lacklustre economic policies during his tenure.

“I expect there will be continuity of economic policy,” he said, adding: “Shifting me to MEA is in no way a comment on my work.”

In the wider reshuffle, outgoing BJP President Jana Krishnamurthy, filmstar Shatrughan Sinha and former Delhi chief minister Sahib Singh Verma were inducted as full cabinet ministers representing the BJP. Another film actor, Vinod Khanna, a BJP MP, was among those sworn in as minister of state.

Three BJP ministers, including Law Minister Arun Jaitley and Venkaiah Naidu were relieved from their jobs to reinforce the sagging image of the party. Naidu took over as the BJP President and said he would shore up the link between the party and the government.

Press Trust of India said the BJP’s organizational machinery needed to be effectively strengthened to counter challenges ahead of the assembly elections in 12 states in the coming two years leading up to the general election in 2004.

It quoted the new BJP spokesman, Arun Jaitley, as saying that a new team to be headed by Venkaiah Naidu, would seek to address a general feeling that the party morale was dipping and needed urgent attention.

Asked about his shifting from Law Ministry to party, Jaitley said: “I had always said that whenever the party wanted me, my services would always be available.”

The swearing-in was not without its hiccups as Trinamool Congress leader from West Bengal Mamta Banerjee refused to be inducted into the cabinet over demands that she should either be given the railway ministry, or her party be given three cabinet berths, reports said.

Among those who were dropped in the reshuffle were Programme Implementation Minister Maneka Gandhi, who was involved in a spat with Health Minister C.P. Thakur, who also resigned.

Minister of State for Textiles V. Dhananjaya Kumar and Minister of State for Labour Muni Lal were also dropped.