In a break from the past two terms and indicating the changed dynamics, as many as 71 ministers (excluding the Prime Minister) were sworn into the Council of Ministers of the National Democratic Alliance government headed by PM Narendra Modi. These include 30 Cabinet ministers, five Ministers of State with independent charge, and 36 Ministers of State.
In the first term of the NDA government, 46 ministers were sworn in, and 58 in the second. The Council was, however, expanded in the middle of those terms, and that could hold for NDA 3.0, too, given the compulsions of a coalition government. The Council can have a maximum of 81 ministers, including the PM.
However, with its 240-seat strength in the Lok Sabha, the Bharatiya Janata Party has retained key ministries including home, finance, defence, external affairs, agriculture, commerce and industry, railways, and roads and highways.
Allies such as the Telugu Desam Party, Janata Dal (United), Lok Janshakti Party (Ram Vilas), Hindustani Awam Morcha (Secular), and Janata Dal (Secular) have also been given allocated portfolios like Civil Aviation, Panchayati Raj and Fisheries, Animal Husbandry & Dairying, and Heavy Industries and Steel.
Prime Minister Narendra Modi has retained the Ministry of Personnel, Public Grievances, and Pensions; the Department of Atomic Energy; and the Department of Space. Other allies, including the Apna Dal, Shiv Sena, and Rashtriya Lok Dal (RLD), have got Ministers of State portfolios.
By retaining most of the senior ministers in their earlier portfolios, sources point out that the government intends not just to indicate that the BJP retains political heft but also ensure continuity in policy.
“Before the General Elections and the Model Code of Conduct, the Prime Minister had directed ministries to continue work and ensure that 100-day agendas were prepared. With the formation of the government, ministers will spearhead these and ensure they are implemented at once,” said a source, noting that officials are also comfortable working with the same ministers. While taking charge, ministers made clear their key priorities and held meetings with their officials.
In the finance ministry, for instance, the preparation of the Budget is underway, and officials are awaiting policy direction from the PM and Finance Minister Nirmala Sitharaman on how to tweak schemes and allocations.
Commerce and Industry Minister Piyush Goyal, soon after assuming charge for a second term, held a review meeting with officials. At that meeting, the secretaries of commerce and the Department for Promotion of Industry and Internal Trade presented briefs on the current proposals and action items.
Markets and investors also seem comforted by the NDA’s strategy, and equity markets have recovered smartly from the initial meltdown when poll results were trickling in on June 4—the benchmark BSE Sensex dropped nearly 6% that day. In a note, financial services firm Nomura pointed out that 22 current Cabinet ministers were also a part of the earlier Council of Ministers, and this represents a sense of continuity.
“After the election outcome, the key investor concerns were about political stability and policy continuity. Any escalation of such concerns leading to a sharper fall in the markets could also adversely impact domestic flows, which have been resilient post-Covid,” Nomura said. It added that, over the course of the past week, those concerns have abated. “The composition of the Cabinet... also indicates policy continuity at the moment,” it said.
Some changes in policy orientation will be inevitable. Rating agencies and industry players feel the government may have to put labour, land, and farm reforms on the back burner to accommodate coalition partners. The first glimpse of this was visible with Petroleum and Natural Gas Minister Hardeep Singh Puri stating after taking charge that the privatisation of the Bharat Petroleum Corporation Ltd, once touted as India’s biggest ever such exercise, is completely off the table now.
But investment in and capital allocation for infrastructure, manufacturing, renewable energy, and electric mobility sectors are expected to get a boost, keeping in mind the Viksit Bharat 2047 (Developed India) vision. In the Interim Budget presented in February, the government made a record allocation of Rs 11,11,111 crore for the infrastructure sector.
With the Cabinet in place, the focus has shifted now to the Budget for 2024–25, expected to be presented in July, for further indications of the government’s path. To start with, the new Cabinet will work on the 100-day action plan prepared while the elections were underway. Some of the measures that require Parliament’s approval and fund allocation are expected to be tabled during the Budget.
For now, it appears to be business as usual. But investors will closely monitor the speed of decision-making by the new coalition government and actual implementation on the ground. The results of the upcoming assembly elections in the states of Maharashtra, Haryana, and Jharkhand will be the next inflection point for the coalition. These are interesting times indeed.
@surabhi_prasad, @richajourno