Shinde's reward on day of worst blackout: Home

  • HT Correspondent, Hindustan Times, New Delhi
  • |
  • Updated: Aug 01, 2012 02:21 IST

Union home minister P Chidambaram arrives for a cabinet meeting at South Block in New Delhi. PTI/Shahbaz Khan

The day half the country went through the second day of power grid collapse - the worst in the world so far - power minister Sushil Kumar Shinde received his good performance award: the home ministry.

P Chidambaram returned to the finance ministry after a three-and-a-half-year stint in the home ministry, following former finance minister Pranab Mukherjee's elevation to Raisina Hill.

The reshuffle also saw corporate affairs minister M Veerappa Moily getting the power portfolio as an additional charge.

After a quick assessment of the second grid collapse hitting 20 states and about 600 million, Moily said the collapse of the three grids was a "very difficult and challenging situation".

Tuesday's blackout came less than 36 hours after a similar outage in the northern grid.

The move to put Chidambaram at the helm of the finance ministry is believed to be initiated at the top as Prime Minister Manmohan Singh, who held finance after Mukherjee's resignation on June 26, wanted to have a full-time finance minister to take questions in the monsoon session of Parliament beginning on August 8.

A combination photo of Sushilkumar Shinde and P Chidambaram. Files/Reuters/PTI


What's more, the PM will need a new leader of the House in Lok Sabha, and the post is likely to go to Shinde.

Chidambaram returns to the finance ministry at a time when policy makers are grappling with options to halt the economic slowdown due to high inflation and industrial deceleration.

Since his move to the home ministry following the Mumbai terror attacks on November 26, 2008, Chidambaram was keen on returning to the finance ministry. But there had been no vacancy till Mukherjee moved out.

After Mukherjee's exit, both Congress president Sonia Gandhi and the Prime Minister agreed on Chidambaram as the next finance minister. Chidambaram's track record in the ministry would also be reassuring for the economy.

For Shinde, there are several political issues, such as the volatile battle front with Maoists and negotiating with the Opposition on setting up the National Counter Terrorism Centre, that require immediate attention.

Besides, the former Maharashtra CM - who quit his police sub-inspector's job and joined politics in 1971 - would also have to set up a mechanism to coordinate intelligence agencies.

For steering India's economy out of the mess - from a sharp slowdown in growth to a free-falling rupee, from industrial deceleration to rising prices - Chidambaram also has his task cut out.

From a countrywide goods and services tax (GST) to a direct taxes code (DTC) and from allowing foreign direct investment (FDI) and pension and insurance sectors to opening up of the banking sector, Chidambaram is expected to implement the unfinished reforms agenda, most of which he himself had unveiled during his earlier stint in 2004-08.

Industry leaders expect Chidambaram to announce the much-needed round of reforms.

"We are confident that he will set in motion quick actions to revive the flagging investor sentiments and restore the driving forces of the economy," said Chandrajit Banerjee, director general of industry chamber Confederation of Indian Industry.

Industry is also waiting for cues from the government on tax proposals, such as the budget provision to empower taxmen to scrutinise older corporate transactions like the Hutch-Vodfaone deal of 2007.

This, along with uncertainty over general anti-avoidance rules (GAAR), has sparked fears among global and domestic investors, who said it would choke foreign investments into India.


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