Modi Expands Cabinet as Party Prepares for India State Polls

(Bloomberg) -- Indian Prime Minister Narendra Modi expanded his cabinet as his ruling Bharatiya Janata Party gears up to face as many as seven state assembly elections next year.

Modi added 19 new junior ministers, of which all but two belong to the BJP and seven are from states that will hold elections in 2017. Junior minister Prakash Javadekar was promoted to the cabinet, sworn in by President Pranab Mukherjee at a ceremony in the colonial-era president's palace in New Delhi on Tuesday. Details on assignment of portfolios is expected later in the day.

This is the second major expansion since Modi swept to office in 2014 with the biggest electoral mandate in three decades. The BJP, which has a majority in the lower house of parliament, now seeks to consolidate power in the states that are crucial to control the upper house.

"This is a superficial restructuring," said Nilanjan Mukhopadhyay, who has written a biography of Modi and analyzes Indian politics. "He just accommodated various interest groups within the party, keeping state elections in mind. This will not fulfill the lack of talent in the council of ministers and does not address the basic necessity to give greater momentum to the government."

‘Minimum Government'

States due or likely to hold elections next year include Uttar Pradesh -- the nation's most populous -- and Modi's home state of Gujarat. Lack of adequate support in the upper house has thwarted Modi's attempts to ease land and labor laws, and a bill proposing a national sales tax is blocked by a political gridlock.

With the new entrants and assuming some ministers dropped from the previous cabinet, Modi now has roughly 80 ministers, near the constitutional limit of 82. While previous prime ministers too had bowed to demands from regional allies -- predecessor Manmohan Singh had 77 ministers in 2013 -- the size of Modi's council probably wasn't what investors were expecting from his campaign slogan of "Minimum Government, Maximum Governance."

"There is no evidence that a bigger ministry leads to more efficiency," Pankaj Sharma, head of equities at Ahmedabad-based Equirus Securities Pvt., said in an e-mail. Considering that the publicly stated objective of Modi's administration has always been reduction in the size of government and of the bureaucracy, the number of ministers "would not be looking very good," he said.

Even as Modi's personal approval rating remains high after completion of two years in office, job creation is seen as a major shortfall. The BJP in May secured a lone election victory among five Indian states holding roughly a fifth of the population, following defeats in Delhi and Bihar state elections last year.

--With assistance from Santanu Chakraborty To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net. To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Jeanette Rodrigues, Unni Krishnan

Also read our live blog on the cabinet reshuffle.