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BW Businessworld

It’s Time For Work Appraisal

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All the signs seem to point to looming chan-ges in Prime Minister Manmohan Singh's cabinet. No one is clear about when they will come, other than to say "soon". In the wake of the scandals surrounding the Commonwealth Games and the alleged corruption in the 2G spectrum allocations, the PM has little choice: a cabinet reshuffle is the least he can do to revive sagging faith in his government's administration.

Long before the present spate of scandals increased the noise — in July 2010, as a matter of fact — there were similar reports of an imminent cabinet reshuffle. Then, it was about agriculture minister Sharad Pawar, who reportedly asked the Prime Minister to "reduce his burden". He wanted a few junior ministers to lighten his workload, and one way of achieving that would be through a reshuffle.

But cabinet reshuffles do not always have to — and often don't — make sense. And the infighting, the lobbying, the juggling for specific ministries, do not make it a very pretty process either. The larger question for the Congress party, the biggest member in the ruling coalition, is whether it will work. Will it reduce the noise about a joint parliamentary committee to look into the 2G spectrum scam, for example?

The rationale for a reshuffle is not always dictated by scandals, of course. Some ministers seem uncomfortable with their charge: according to the buzz, Sushil Kumar Shinde is one, and wouldn't mind changing to another ministry. S.M. Krishna, currently external affairs minister, is perceived as being too soft, especially when it comes to relations with Pakistan (commerce minister Anand Sharma is being tipped as his successor). Environment minister Jairam Ramesh has raised several hackles both in government, and perhaps in one state government  (read Orissa), and among the business community because of his apparent hard line on mining and land use issues.

Junior ministers — or ministers of state without cabinet rank — also use reshuffles to showcase performance. Salman Khurshid, who currently handles minority affairs and corporate affairs ministries, may expand his ambit to include science and technology and even be ‘promoted' to full cabinet rank. His reputation for performance is high, and he hails from Uttar Pradesh, where assembly elections are slated to be held in 2012.

The other junior minister who may be "promoted" — according to the buzz in government circles — is Parneet Kaur, minister of state for external affairs. Her husband Amarinder Singh is a close confidant of the Gandhi family, and runs the Congress party's affairs in Punjab.

Bad performance is similarly punished during a reshuffle. Social justice minister Mukul Wasnik, who ran the Congress campaign in the recently concluded Bihar assembly elections, might have his wings clipped. Others such as Ghulam Nabi Azad and Ambika Soni may be relieved of ministerial responsibilities and focus on party roles instead.

But cabinet reshuffles are also instruments that the PM can use to address the moral hazard problem, to borrow a term from the insurance business: how someone can behave when insulated from risk. Former telecom minister A. Raja behaved without fear of consequences because he believed that he was insulated from removal. The UPA government needed his party's support to stay in power. Reshuffles drive that point home hard to other ministers who believe themselves immune from risk of removal.

But do cabinet reshuffles restore public faith in government? Perhaps not, if the process follows the anticipated script, part of which includes the names discussed in preceding paragraphs. It will, if the PM shows the subtle strength he used to push the nuclear deal in the teeth of opposition from within and without his party, and surprises us all. And he can. 

(This story was published in Businessworld Issue Dated 17-01-2011)