Will Modi's Reshuffle Clinch His Re-election in 2019?

This article first appeared on Riding the Elephant.

Narendra Modi has today carried out his most significant government reshuffle since becoming India's prime minister three years ago, with ministerial moves that strengthen three top posts while at the same time balancing the political interests of different states and illustrating the limited talent available at senior levels.

The headline-grabbing appointment is that of Nirmala Sitharaman, 58, who has been a low-key commerce and industry minister of state since 2014, to be India's first full-time woman defense minister. The post was held twice by Indira Gandhi when she was prime minister in 1975 and the early 1980s.

Some observers thought Sitharaman might be dropped from the government, but instead she was promoted to the cabinet and then announced as defence minister, which makes her a member of the top-level cabinet committee on security. She succeeds Arun Jaitley, the finance minister, who has been looking after defense since March when Manohar Parrikar, the previous minister, resigned to become chief minister of Goa.

The three appointments that should strengthen the government include Piyush Goyal, 53, who has been a successful power and renewable energy minister, to be railways minister, succeeding Suresh Prabhu, 64, who replaces Sitharaman at commerce and industry.

Goyal, who keeps responsibility for coal (which depends on the railways for transport), will probably prove to be tougher than Prabhu in tackling the entrenched railways establishment. Prabhu offered to resign two weeks ago after a spate of railway accidents and will bring a new policy approach to commerce and industry.

The third appointment is Nitin Gadkari, 60, who has added water resources and reviving the River Ganga to his highways and shipping portfolio.

The relatively limited talent pool that Modi can call on to fill senior ministers' jobs is illustrated by the appointment of four senior public officials without any political experience to be ministers of state, three of them with independent charge reporting direct to the prime minister. They all became active Bharatiya Janata Party members after retiring from public service and have been chosen because of their administrative ability and experience, not necessarily because of their past specialties.

This is graphically illustrated by Hardeep Singh Puri, 65, a former top diplomat known for his tough style, who retired as ambassador to the United Nations. He has become housing and urban development minister and will be tackling – on a steep learning curve – an acute shortage of viable homes and uncontrolled expansion of towns and cities.

A former home secretary, Raj Kumar Singh, 64, succeeds Goyal as minister for power and renewable energy and will be continuing his reforms, while a former Delhi Development Authority commissioner, Alphons Kannanthanam, 64, known as "demolition man" after clearing 15,000 illegal structures, is becoming minister of state for tourism, electronics and information technology. Satya Pal Singh, 61, previously a Mumbai police commissioner famed as a "top crime buster cop" has gone to the human resources and water resources ministries.

These moves come a few days after doubt has been cast on the success of one of Modi's most high profile and dramatic initiatives – the sudden demonetisation of 86 percent of the country's bank notes last November. The Reserve Bank of India has reported that 99 percent of the cancelled high value banknotes were deposited in banks. This undermines government claims that a third of the high value notes would be removed from the economy because holders of black money would not dare to try to bank them.

Economic growth has fallen to 5.7 percent, which is more than 2 percent below the figure a year ago and the lowest since 2014. It was hit by demonetisation and has also been affected by the introduction in July of a long-awaited goods and services tax which, while a much-needed reform, is far more complex and difficult to implement that was originally intended.

Such results sometimes lead to speculation that Arun Jaitley, who was responsible for demonetisation and the new sales tax, would be moved, but he remains at the finance ministry and is the most senior cabinet minister, sharing influence as a Modi adviser with Amit Shah, the party president.

The reshuffle was triggered by Prabhu offering to resign and being told by Modi "to wait" after three passenger trains derailed in the past two weeks, two of them in the space of just five days killing at least 20 passengers and injuring more than 200.

All were clearly failures of railways management. On one, there was no warning of rail track works, while another happened when a truck overturned on the tracks. Since 2012, 60 percent of rail accidents have been caused by mistakes or the negligence of railway staff, according to a study by NITI Aayog, the government's planning commission.

Managing the railways that carry 23m passengers and 3m tonnes of freight every day on 66,000kms of tracks is a highly complex task, which is made worse by tensions and collusion between the various parts of the establishment that includes the ministry and a railways board.

Prabhu, who was the ninth railways minister in as many years, began in the three years he held the post to modernise many of the operations, but some commentators say he was not tough enough with those involved.

Sitharaman faces an equally tough task at the defence ministry, where she has no prior experience (nor did her two predecessors in the past three years). The most urgent job is re-equipping the grossly under-prepared armed forces at a time when tensions are high with China and Pakistan.

This includes speeding up the award of new defence contracts, especially with Indian companies, which links with Modi's well-marketed but under-performing Make in India campaign launched by her old ministry. Jaitley seems likely to be monitoring and encouraging this work, while Modi's national security adviser and the cabinet security committee play a key role on the country's defence.

Commentators have suggested that Sitharaman was given the post partly to raise the BJP's profile and acceptability in Tamil Nadu, which is her home state in southern India where the party is not yet strong. Such regional considerations also affected the reshuffle elsewhere with the appointment of two new ministers from Uttar Pradesh and Bihar, which are key targets for the BJP in the 2019 general election.

So, as always, politics rather than ability plays a role in the selection of ministers, as it does in any democracy. But today's appointments also show that Modi is trying to strengthen the effectiveness of his ministers and government for work that urgently needs to be done before 2019.

John Elliott writes from New Delhi. His latest book is Implosion: India's Tryst With Reality (HarperCollins).