Modi to Revamp Cabinet to Spur Growth Before Key India Polls

(Bloomberg) -- Indian Prime Minister Narendra Modi plans to overhaul his cabinet to boost efforts to spur flagging growth and soothe increasing signs of social tension before state elections this year and the national vote in 2019.

Skill Development Minister Rajiv Pratap Rudy and junior Human Resources Development Minister Mahendra Nath Pandey resigned Thursday night, according to two members of the ruling Bharatiya Janata Party, who asked not to be identified citing rules on speaking with the media. Agriculture Minister Radha Mohan Singh and junior ministers Sanjeev Balyan and Giriraj Singh stepped down, NDTV 24X7 reported, citing people it didn't name.

Speculation is also rife about who will take charge of the crucial Ministry of Defence that's currently being looked after by Finance Minister Arun Jaitley. He has enough on his plate already, as data late Thursday showed India's economic growth unexpectedly slumped to the lowest since 2014. While Jaitley has overseen the easing of a border stand-off with China, Modi can't afford to lose focus on security with his army chief warning that such encounters are likely to increase.

Read more about the eyeball-to-eyeball stand-off

“He is making changes in his council of ministers and inducting new faces to give a thrust to his policies and governance to create employment and revive the slowing economy,” said Satish Misra, a political analyst at the Observer Research Foundation in New Delhi. “Possibly it will be his last major reshuffle before the next general elections due in 2019.”

Looming Vote

The reshuffle is likely at 10 a.m. in New Delhi on Sunday, the Press Trust of India reported, citing people it didn't identify. Jagdish Thakkar, a spokesman in the Prime Minister's Office, didn't answer calls seeking comment.

When asked if he expects to hold the defense portfolio for much longer, Jaitley this week replied, "I hope, not very long." Railways Minister Suresh Prabhu may also be affected by the reshuffle. He said last week he takes "moral responsibility" for a spate of deadly accidents. Prabhu met Modi, and Modi asked him "to wait," Prabhu said on Twitter without elaborating.

The growth slowdown makes it harder for the government to create enough jobs for farmers fleeing plunging agricultural prices, and these failures are stoking existing caste-based tensions. Members of an influential land-owning Gujarati community have rallied behind a 24-year-old firebrand named Hardik Patel to demand guaranteed jobs in the bureaucracy and state-run companies. Gujarat -- Modi's homestate -- is due to hold elections before January.

Read more about India's growth slump

Modi's party has already deputed the junior Human Resources minister Pandey to head the BJP in the crucial electoral state of Uttar Pradesh. The BJP swept the state in local polls this year but would want to take no chances with the national vote looming. Nine of India's 14 prime ministers have come from the nation's most populous state, which includes Modi's political base Varanasi.

Modi also needs to make room in his cabinet for representatives of enemy-turned-ally Nitish Kumar.

--With assistance from Abhijit Roy Chowdhury

To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net.

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Jeanette Rodrigues, Arijit Ghosh