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Monday, 1 July, 2002, 13:55 GMT 14:55 UK
Analysis: India appoints new finance minister
Jaswant Singh with Indian Prime Minister Atal Behari Vajpayee
Singh has been key to Vajpayee's foreign policies
In a sweeping cabinet reshuffle, Indian Prime Minister Atal Behari Vajpayee has replaced his finance minister with the foreign minister.

Jaswant Singh will now preside over the country's economic policies and former Finance Minister Yashwant Sinha will swap places with him at the Foreign Ministry.


On the whole, this exercise is aimed at improving the Bharatiya Janata Party's prospects at the next general elections

K Ramachandran
Tata TD Waterhouse Securities
Mr Vajpayee said his new cabinet would revamp the ruling Hindu nationalist BJP party and strengthen both government and party.

But Alok Mukherjee, the senior economics correspondent of The Hindu newspaper, told the BBC's World Business Report that in his opinion there would not be a dramatic change in government policies.

"It's the same government and prime minister, at the most there would be a change in style of implementing the reforms," said Mr Mukherjee.

"Since he has been brought in the middle [of the government 's term] to take charge of the finance ministry, there is an expectation he will be pushing for reforms with much greater vigour, but how much they can get through parliament, especially in the upper house where they do not have a majority," he said.

Economic hope?

Mr Singh has had a brief experience as finance minister when the Vajpayee government came to power for 13 days in 1996 and also as deputy chairman of the planning commission.

Former Finance Minister, now Foreign Minister Yashwant Sinha
Sinha's policies were blamed for recent poll defeats

He is one of the high profile leaders of the BJP and was the prime minister's original choice for the post when the government won power but could not take up the post because he lost a by-election.

Meanwhile, Mr Sinha, a 63-year-old bureaucrat turned politician, in February became only the third Indian finance minister to hold the post long enough to present five budgets.

But unpopular taxes on the middle classes and tariffs on a range of goods from toys to roofing tiles caused a series of humiliating electoral defeats for the BJP.

Analysts nicknamed Mr Sinha 'Rollback' for U-turns in April on many budget taxes and subsidies, which they regarded as a desperate bid to maintain the BJP's middle-class support.

Political matter

India's markets did not react to the cabinet reshuffle.

"On the whole, this exercise is aimed at improving the Bharatiya Janata Party's prospects at the next general elections," said K Ramachandran, the head of research at Tata TD Waterhouse Securities.

"To that extent, the focus will shift to politics rather than governance, which is slightly negative."

Thirteen new ministers and junior ministers were sworn in and others left the government to work for the party to get it into shape ahead of a string of state elections and national elections due by 2004.

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 ON THIS STORY
Alok Mukherjee, The Hindu newspaper
"The most there would be a change in style of implementing the reforms."
See also:

03 Jun 02 | Business
26 Apr 02 | Business
01 Mar 02 | Business
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