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O 291432Z MAY 09
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6776
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INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 07 NEW DELHI 001099 
 
STATE FOR SCA/INS JASHWORTH AND SCA/RA MURENA 
USDOC FOR 4530/ITA/MAC/OSA/LDROKER/ASTERN 
DEPT PASS TO USTR FOR SOUTH ASIA - CLILIENFELD/AADLER 
DEPT PASS TO TREASURY FOR OFFICE OF SOUTH ASIA - MNUGENT 
TREASURY PASS TO FRB SAN FRANCISCO/TERESA CURRAN 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD EAGR PREL PGOV PTER IN
SUBJECT: GOVERNMENT SIGNALS PERFORMANCE IS PARAMOUNT IN KEY ECONOMIC 
AND DEVELOPMENT MINISTRIES 
 
REF: NEW DELHI 1062 
 
¶1.  (SBU) Summary.  The Congress-led United Progressive Alliance 
(UPA) announced the remainder of its 79-member council of ministers 
on May 28, who join the earlier round of ministers announced on May 
22 (see reftel).  The week-long process of selection seems to have 
placed more weight on capable and committed administrators and 
supporters of Prime Minister Singh's policies, rather than the more 
usual coterie of party and Gandhi loyalists.  Many have construed a 
comment by Congress Party President Sonia Gandhi to signal that 
Cabinet ministers must succeed in the government's infrastructure 
and social sector goals, or expect to be replaced.  Indeed, the 
exclusion of several senior and loyal party members who were 
perceived as nonperformers can be taken as the first proof of that 
resolve.  Press is interpreting the assignments as designed to 
maximize the Prime Minister's imprint on economic policy goals and 
outcomes.  If successful, that bodes well for US economic and 
commercial interests.  However, it may be worthwhile to heed recent 
contacts who warn that reform advocacy will only be welcomed where 
it is tied to concrete, direct benefits for struggling Indians. 
Efficiency and openness per se will not be winning arguments, but 
tangible job creation and improved service delivery in 
infrastructure and the social safety net will carry the day.  End 
summary. 
 
Second Time Around, Performance Matters Most 
------------------------------------------ 
 
¶2.  (SBU) In the UPA's last term, allies' demands within a fragile 
coalition and party loyalty were larger determinants in portfolio 
assignments, leading to significant underperformance in ministries 
key to improving livelihoods, including roads, power, health, and 
education.  The ministerial appointments announced late on May 28 
suggest, encouragingly, that effectiveness is now the more important 
factor, with PM Singh's input seen more clearly in the allocation of 
portfolios.  Singh has reportedly told Congress Members of 
Parliament that "business as usual" won't do.  Notably, several 
Gandhi loyalists are out this time around - Arjun Singh, who was 
Minister for Human Resource Development (HRD), HR Bhardwaj, and 
octogenarian Sis Ram Ola, amid perceptions that they held back their 
ministries.  Three senior Congress leaders, seen as take-charge 
people who have the PM and Sonia Gandhi's support, have been 
assigned key social and infrastructure ministries.  They are former 
Jammu & Kashmir Chief Minister Ghulam Nabi Azad at Health, Kapil 
Sibal at HRD, and Kamal Nath at the Roads and Surface Transport 
Ministry.  These and the other assignments are credible first steps 
towards the UPA's delivering on improving living standards, physical 
and human infrastructure development, and job creation.  Most of the 
key economic ministries, along with implications for the US, are 
noted below. 
 
Ministry of Finance - Pranab Mukherjee 
-------------------------------------- 
 
¶3.  (SBU) Pranab Mukherjee was chosen as Finance Minister on May 22, 
in the government's first tranche of senior ministers (see reftel). 
He has been acting Finance Minister since January, when Prime 
Minister Singh underwent bypass surgery.  Key priorities for the 
Finance Minister will be passage of the budget (septel), returning 
India to a higher growth trajectory, and reining in the fiscal 
deficit.  The Finance Ministry will have to decide whether it can 
afford another fiscal stimulus as well as examine how effective the 
stimulus packages introduced so far have been.  The fiscal 
constraint may be partially mitigated by re-starting partial 
divestment of public sector companies.  (Note: Government figures 
released on May 29 put GDP growth for the April 2008-March 2009 
fiscal year at 6.7%, well within government estimates and above most 
economists' forecasts.  End note.)  Mukherjee has also told press 
that he will focus on inclusive growth and sees reforms as the way 
to stimulate the economy. 
 
¶4.  (SBU) Contacts have told Econoffs that since Chidambaram moved 
over to the Home Ministry in December, Planning Commission Deputy 
Chairman Montek Singh Ahluwalia has provided the substantive policy 
input for the government's response to the global finance crisis and 
the economic downturn.  There is no word yet that this will 
 
NEW DELHI 00001099  002 OF 007 
 
 
continue, but Post judges it likely, given Mukherjee's limited 
economic policy experience with India's integration with the global 
economy.  Contacts describe Mukherjee as an astute and capable 
administrator, who is most interested in improving government 
performance.  As such, he is viewed as agnostic on reforms, rather 
than an ardent reformer.  US interlocutors may find him more open to 
dialogue, but not easily persuaded on the merits of liberalization 
without specifically tying it to concrete results in "inclusive 
growth" objectives such as more roads, electricity, or schools. 
Overall, Mukherjee brings with him vast experience in government, 
uncanny political instincts and uncommon intellectual ability. 
 
¶5.  Bio: 78-year old Mukherjee, from West Bengal, is the most senior 
UPA Cabinet Minister.  Mukherjee is frequently tagged in the press 
as the country's de-facto Prime Minister as he chairs Cabinet 
meetings in the Prime Minister's absence.  Mukherjee was at the 
forefront of the U.S.- India Civil Nuclear Deal as the Foreign 
Minister from 2006-09.  He is one of the Congress Party's most 
highly-regarded stalwarts and strategists, and a close advisor to 
Sonia Gandhi.  He has favored stronger ties with the U.S., including 
more economic and trade cooperation. 
 
Ministry of Commerce and Industry - Anand Sharma 
--------------------------------------------- --- 
 
¶6.  (SBU) In a move that surprised many commentators and contacts, 
former Minister of State for External Affairs, Anand Sharma, was 
elevated to Minister of Commerce and Industry (MOCI) on May 28. 
Some industry officials were not surprised that former MOCI Minister 
Kamal Nath was replaced, given political signals in recent days, but 
deemed the move to bring in Sharma in his stead as 'unexpected'. 
Sharma is seen by some as close to the Prime Minister, given that he 
played an occasional role as an envoy and troubleshooter in helping 
to advance the PM's agenda on civil-nuclear and counter 
proliferation issues.  Indeed, some media speculated that Nath's 
tough postures in multilateral forums, particularly the WTO Doha 
Round, may have undermined his position with PM Singh, with the 
latter feeling better placed to remove Nath after a strong election 
outcome.  Embassy officials who have met Sharma in different 
settings describe him as a consummate diplomat, a quick study, 
polished, and not drawn to the limelight, unlike his showman 
predecessor. 
 
¶7.  (SBU) Foreign mission contacts in Delhi told Econoff May 29 that 
they discussed the possible attendance of MOCI Minister Sharma at 
the Cairns Group Ministerial in Bali, June 7-9, with senior MOCI 
bureaucrats.  The Cairns meeting will be one of the first 
multilateral meetings where WTO members plan to reengage on the Doha 
Round agenda in the wake of the Indian and U.S. elections.  The 
senior MOCI bureaucrats confirmed that they will recommend that 
Sharma attend the meeting.  Sharma does not have sufficient clout to 
change India's substantive positions in the WTO Doha Round; that 
will require consensus within the government.  However, Post expects 
Sharma to avoid the public posturing on behalf of the developing 
world that Nath did, in favor of a more constructive, 
consensus-seeking approach that burnishes India's image as a global 
economic player. 
 
¶8.  Bio:  The 56-year old veteran Congress official Anand Sharma is 
a lawyer by profession.  He was appointed Minister of State for 
External Affairs in February 2006.  As a former Youth Congress 
leader, Sharma was the face of the Congress Party when he was its 
spokesman for several years leading up to his MEA appointment.  In 
addition to his experience in external affairs, Sharma is conversant 
with parliamentary and legislative procedures and international law. 
 He has also organized several major international conferences, 
including the Non-Aligned Movement (NAM) Youth Conference in 1985. 
Although his work with NAM might give pause, Sharma is seen as a 
pragmatist. 
 
Ministry of Agriculture - Sharad Pawar 
-------------------------------------- 
 
¶9.  (SBU) Pawar was reappointed Minister of Agriculture and will 
immediately confront certain key decisions that have to be made on 
government grain stocks and minimum support prices (MSP).  High MSPs 
 
NEW DELHI 00001099  003 OF 007 
 
 
in the past few seasons, especially for wheat and rice, along with 
good monsoon rains, have underpinned large crops.  Much of this 
harvest has been procured by the government, with 33 million tons of 
wheat and 16 million tons of rice projected in stocks by July 1. 
Faced with a glut of wheat, in particular, Pawar will have to decide 
whether to feed the stocks into the broken public distribution 
system or to export.  A decision to export wheat would require a 
costly subsidy since the domestic MSP-supported price is higher than 
the internationally-traded wheat price.  In addition to adding to 
India's near-term fiscal deficit, an export subsidy would likely 
violate WTO rules. 
 
¶10.  (SBU) Longer-term, Indian agriculture faces a number of 
intertwined economic and political challenges revolving around the 
need to improve agriculture productivity and growth.  If the GOI is 
to make progress on raising agricultural productivity, Pawar will 
have to focus during his tenure on agricultural research and 
education, rationalizing the costly fertilizer subsidy and the MSP, 
undertaking marketing reforms, addressing futures trading in 
commodities, and finding a vehicle to provide cheap credit to 
farmers without creating moral hazard.  Pawar has in recent days 
stated that he is looking at a soft-credit program to enhance farmer 
borrowing capacity. 
 
¶11.  Bio:  Pawar, 69 years old, began his career in politics early, 
becoming president of the State Youth Congress at 24.  In 1978, he 
became the Chief Minister of Maharashtra at the age of 38.  Mr. 
Pawar completed two more terms as Chief Minister before being 
appointed India's Defense Minister in June 1991.  An additional 
stint as Maharashtra CM and as an opposition leader in Parliament 
followed.  Pawar was appointed Union Minister of Agriculture in 
¶2004. 
 
Ministry of Human Resource Development (HRD) 
- Kapil Sibal 
---------------- 
 
¶12.  (SBU) Educators across India are today breathing a sigh of 
relief at the appointment of Kapil Sibal, 60, as Minister of Human 
Resource Development.  A member of Parliament from Delhi, Sibal 
served in the previous government as Minister of Science and 
Technology where he served effectively and was a regular Mission 
interlocutor.  Said to be Rahul Gandhi's personal choice for this 
Ministry, Sibal's appointment represents a recognition by the 
government that it is time to end the practice during both Congress 
and BJP-led governments of using the position as a holding spot for 
the PM's internal rivals, on the assumption they could never succeed 
in office. 
¶13.  (SBU) The lack of long-expected forward movement on education 
reform during PM Singh's first term was a major sore point for many 
of the Congress Party's urban supporters, even as the government 
raised education outlays in recent years.  Mission believes that 
Minister Sibal, who has traveled many times to the U.S., will be an 
active interlocutor in our bilateral educational dialogue.  In the 
past, Sibal has told senior USG visitors that he supports the 
opening of India's education market to international participation, 
consistent with the intent of legislation that has been stalled in 
Parliament by his predecessor for three years.  Although many 
questions remain about the conditions under which U.S. educational 
service providers may enter the Indian market, forward movement with 
these reforms represents an important litmus test for urban Indians 
of the UPA's desire to modernize and expand India's creaky education 
system.  India's teachers and administrators are hopeful that with 
Sibal's appointment, things will finally get moving. 
Ministry of Civil Aviation (MOCA) - Praful Patel 
--------------------------------------------- --- 
 
¶14.  (SBU) As a Minister of State with an independent charge, Praful 
Patel is back in the Union Cabinet with the same portfolio.  He 
resumes charge of the aviation sector at a time when it is 
undergoing a deep crisis globally, with estimates that the Indian 
aviation industry alone accounts for almost one-third of the global 
losses.  Following his appointment, Patel told reporters that his 
top priority will be focusing on state-run carrier Air India which 
has been underperforming and continues to face stiff competition 
from private carriers.  Since the Air India and Indian Airlines 
 
NEW DELHI 00001099  004 OF 007 
 
 
merger in 2007, Patel has faced criticism for the huge losses 
incurred by the airlines.  At present, Air India is estimated to be 
grappling with losses of nearly $800 million.  The ministry is 
likely to consider a new proposal for Air India which will include a 
larger restructuring plan, equity infusion and a soft loan. 
 
¶15.  (SBU) Patel, an industrialist turned politician, has been 
credited for bringing a business-like approach to the aviation 
sector, including reforms to liberalize the sector, to modernize the 
aviation infrastructure, and to secure new aircraft for Air India 
and Indian Airlines.  His reappointment is viewed as affirmation of 
his solid performance under the previous UPA government.  Patel will 
now face the tremendous challenge of turning around the depressed 
aviation sector and moving ahead with modernization plans for the 
nation's airports.  One of the ministry's top priorities is said to 
be the implementation of a new civil aviation policy, formulated 
nearly three years ago, which among other matters allows foreign 
airlines to acquire up to 49% stake in domestic carriers.  Patel has 
been a strong supporter of closer U.S.-India ties; he signed the 
historic bilateral Open Skies Agreement in 2005 and the Aviation 
Cooperation Program in 2007, a public private partnership to assist 
in developing India's aviation infrastructure. 
 
¶16.  (SBU) Bio: Praful Patel, 52, is a young and dynamic leader of 
the Nationalist Congress Party (NCP).  He has been a member of the 
Rajya Sabha from Maharashtra since April 2000 and is a close 
confidant of NCP chief Sharad Pawar.  Patel serves as party 
treasurer and spokesman.  Patel is a member of the U.S-India 
Parliamentary Forum, a group of Indian parliamentarians interested 
in stronger US-India ties.  Patel is forward leaning on reforms and 
has been supportive of liberalization of India's civil aviation 
sector.  He is credited with allowing increased competition into the 
sector with the entry of low cost carriers.  Patel helped to expand 
the fleets of Air India and Indian Airlines with large aircraft 
orders. 
Ministry of Road Transport and Highways 
- Kamal Nath 
---------------------------------------- 
 
¶17.  (SBU) Kamal Nath, previously Minister for Commerce and 
Industry, was named Minister of Road Transport and Highways with 
Cabinet rank on May 28.  His appointment is being cast by the GOI as 
putting a Congress Party heavyweight with long standing 
administrative experience in charge of key infrastructure policies. 
Nath told reporters that the "old regulatory framework" overseeing 
the transportation sector will be modernized to make it "practical". 
 He said his first priority will be to examine the major impediments 
in implementing plans for infrastructure development in the country 
and then introduce new models for reworking the regulatory policy 
framework for roads. 
¶18.  (SBU) Major challenges facing Nath will include raising funds 
for the sector; dealing with the liquidity crunch under the current 
global recession which has delayed the financial closure of key 
projects under the National Highway Development Plan (NHDP); 
encouraging private investment and confidence in state-level public 
private partnership projects; strengthening institutional capacity; 
and helping ease land acquisition clearances.  While some contacts 
were surprised by the appointment of Nath to the Road Ministry, they 
noted that his tough postures at multilateral forums as Commerce 
Minister may have led to the change in portfolios.  Nath is viewed 
as an able administrator and is expected to help turn around the 
road and transport ministry to deliver on major infrastructure 
projects to stimulate the economy. 
¶19.  (SBU) Bio: While former head of MOCI, Nath was responsible for 
major trade policy initiatives, bilateral and multilateral trade 
negotiations, and domestic industrial policy.  During his tenure, a 
comprehensive Foreign Trade Policy (2004-09) was announced outlining 
a coherent roadmap with a twin focus on exports as well as 
employment.  India's merchandise export growth rate increased during 
the first four years of his tenure, before turning negative in the 
past several months with the global slowdown.  As MOCI, Nath pursued 
major bilateral trade initiatives with ASEAN, Japan, the EU, and 
within South Asia.  On the WTO Doha Round, Nath has been a vocal 
proponent of differential treatment for developing countries and a 
leader - along with Brazil - of the G20 in the trade talks.  Many 
observers place the blame for the July 2008 collapse of a crucial 
 
NEW DELHI 00001099  005 OF 007 
 
 
WTO Ministerial meeting on Nath's unwillingness to reach a 
compromise with the U.S. on the level of protection to be afforded 
developing country farmers. 
Ministry of Power - Sushil Kumar Shinde 
----------------------------------------- 
 
¶20.  (SBU) Sushil Kumar Shinde, 67, retains his position as Minister 
of Power, which he started on January 29, 2006.  The Ministry of 
Power oversees one-third of India's installed power generation 
capacity and all inter-state power transmission through its 
centrally-owned companies; and it affects inter-state policy related 
to the state-owned and privately-owned power stations, that are 51% 
and 15% of total capacity respectively.  The separate Department of 
Atomic Energy handles nuclear power (3%).  With coal-fired thermal 
power accounting for 65% of its power production, Shinde's ministry 
and the power sector make up a large percentage of India's carbon 
dioxide emissions, and thus any GOI climate change concerns must 
take into account his responsibility for supplying electricity for 
India's economic development.  Shinde is tasked with achieving 
India's ambitious targets of expanding power generation capacity by 
over 50% by 2012 and he sees expansion of coal-fired capacity 
(two-thirds of the addition) as the mainstay for growth through 
¶2032. 
 
¶21.  (U) Bio: Sushil Kumar Shinde is a Dalit from a poor cobbler's 
family in Maharashtra, a sub-inspector who studied law.  He won an 
assembly seat and rose through state Congress Party ranks to be 
Finance Minister and then Chief Minister of Maharashtra (2003-04), 
and held the non-political post of Governor of Andhra Pradesh for a 
year before becoming Power Minister. 
 
Ministry of Petroleum and Natural Gas 
(MPNG) - Murli Deora 
--------------------------------------- 
 
¶22.  (SBU) Murli Deora, 72, continues as Minister of MPNG, which he 
became in February 2006, replacing Mani Shankar Aiyar, who was seen 
as acting too independently on India's hydrocarbon-related foreign 
activities, including in potential deals with Iran.  Deora has seen 
Iran as an unreliable potential partner, such as in the proposed 
Iran-Pakistan-India natural gas pipeline.  With strong connections 
in both the Indian parliament and the U.S. Congress, Deora was an 
important behind-the-scenes player and interlocutor for the 
U.S.-India Civil Nuclear Initiative negotiations.  India now imports 
about 26% of its natural gas and 78% of its crude petroleum 
consumption (with about 10% re-exported as refined products) and is 
actively seeking equity in foreign oil and gas reserves.  The 
MPNG-controlled ONGC Videsh Ltd has been a potential partner in 
proposed oil and gas deals with Iran, but none has yet come to 
fruition. 
 
¶23.  (SBU) MPNG oversees government-owned companies responsible for 
the majority of India's domestic petroleum and natural gas 
production, refining, transportation and marketing, as well as its 
overseas exploration, production and services activity through ONGC 
Videsh.  Deora says he supports decontrol of refined oil product 
prices, a politically delicate position, which however could end the 
need for large subsidies to GOI-owned refining and marketing 
companies and could attract private sector participation.  MPNG does 
not control private companies like Reliance Industries Ltd (RIL), 
which will soon produce new natural gas that doubles India's output, 
but which is also a past and potential source of diesel and gasoline 
exports to Iran. 
 
¶24.  (U) Bio: Murli Deora, prior to becoming MPNG Minister, was a 
member of the Upper House (Rajya Sabha) of the Indian Parliament, 
and has represented the prestigious South Mumbai constituency in the 
Lok Sabha for three consecutive terms in 1984, 1989, 1991, and again 
in 1998.  Deora is the Congress Party's liaison with corporate 
funding sources.  He was previously elected Mayor of Mumbai with the 
highest ever majority and was the Chief of Mumbai Region of Indian 
National Congress for a record period of 22 years.  He graduated in 
Economics from the Univ. of Mumbai. 
 
Ministry of New and Renewable Energy (MNRE) - 
Farooq Abdullah 
 
NEW DELHI 00001099  006 OF 007 
 
 
--------------------------------------------- 
 
¶25.  (SBU) Farooq Abdullah, 72, of the National Conference Party and 
from Kashmir's predominant political family, was appointed MNRE 
Minister.  MNRE is responsible for policy related to renewable 
energy, including wind, solar, bio-mass, and small hydropower (under 
25 Megawatts capacity), but it does not directly supervise any fuel 
or power production from these sources, which is mainly run by the 
private sector.  The MNRE is promoting feed-in tariffs and renewable 
portfolio standards (RPF) and it is drafting the "Solar Mission" 
policy aimed at incentives for developing and deploying photovoltaic 
and solar thermal power.  MNRE has been cooperative with the 
U.S.-India Energy Dialogue's New Technology and Renewable Energy 
Working Group, including with the U.S. Department of Energy's Office 
of Energy Efficiency and Renewable Energy in a wide variety of 
programs, in addition to recently signing an MOU on Cooperation in 
the Development of Bio-fuels.  MNRE has also supported several 
recent USDOC trade delegations for clean and renewable energy, 
including the solar mission in March 2009.  To date, renewables 
account for only 2% of electricity production.  The GOI promotes 
renewables more as way to help meet the power demand-supply gap and 
to deliver energy to remote areas, and less as a way to mitigate 
greenhouse gas emissions. 
 
¶26.  (U) Bio: Farooq Abdullah was elected MP from Kashmir's summer 
capital Srinagar in 1980 and succeeded his father as Chief Minister 
succeeded on his father's death in 1982.  He returned to power in 
1987 and forged an alliance with Congress.  After years of direct 
Presidential rule, he again became the Chief Minister of Jammu and 
Kashmir in 1996.  His son Omar Abdullah is currently Chief Minister 
of Jammu and Kashmir.  His daughter Sara is married to Sachin Pilot, 
the new Minister of State the Ministry of Communications and 
Information Technology. 
 
Ministry of Communications and 
Information Technology (MCIT)- A. Raja 
------------------------------------- 
 
¶27.  (SBU) Mr. Andimuthu Raja, 46, continues as MCIT Minister, which 
he became in May 2007, after the ruling United Progressive 
Alliance's coalition partner, the Tamil Nadu-based Dravida Munnethra 
Kazhagam (DMK)Party forced out Minister Dayanidhi Maran, due to an 
intra-DMK conflict.  The MCIT is divided into the Department of 
Telecom (DOT) and Department of Information Technology (DIT). 
MCIT/DIT has overseen India's boom in information technology, with 
India's world-class software technology and data-processing services 
contrasting with its very low rate of computer and internet 
penetration for the population as a whole. 
 
¶28.  (SBU) MCIT/DOT (Telecom) has presided over India's phenomenal 
growth in mobile telephony, both by directly overseeing GOI-owned 
MTNL and BSNL, and by allocating telecom licenses and radio spectrum 
for second generation (2G: voice) and now third generation (3G: 
data/video/voice) mobile services to private Indian and foreign 
companies.  Thus, the MCIT's authority creates a possible 
susceptibility to corruption in a booming competitive private market 
dependent on GOI licenses and allocations.  Raja is expected to move 
quickly in the long-awaited open auctions for 3G spectrum -- an act 
welcomed by foreign participants.  In his first term, Raja was 
viewed positively for his support of raising the foreign direct 
investment (FDI) ceiling to 74% and for approval of U.S. companies' 
long distance licenses.  However, he faced intense criticism as 
"Spectrum Raja" for favoritism in his handling of 2G spectrum 
allocation policy and for delays in the controversial 3G auction 
policy.  The Wall Street Journal India partner Live Mint's editorial 
on May 29 reported that the Prime Minister had allegedly wanted Raja 
out of the new cabinet, and said that Raja's reappointment "cancels 
out" the PM's "positive signal" of removing another 
politically-connected minister who had caused "damage." 
 
¶29.  (U) Bio: Andimuthu Raja, a 46-year old Dalit lawyer, and Member 
of Parliament from Nilgiris, Tamil Nadu was groomed into a 
politician by the late Murasoli Maran and is now a loyalist of 
Rajathi Ammal, third wife of the DMK party Chief M Karunanidhi.  He 
is known for his oratorical skills.  Raja held positions as Minister 
of State for Rural Development and for Health and Family Welfare, 
 
NEW DELHI 00001099  007 OF 007 
 
 
and he was elevated to cabinet rank as Minister of Environment and 
Forests in 2004.  He is entering the Lok Sabha for the fourth time 
in a row since 1996.  A Raja is one of DMK's propaganda 
secretaries. 
A Rose by Any Other Name: New Name for Reforms? 
--------------------------------------------- -- 
 
¶30.  (SBU) Even amidst the positive signals coming from Congress' 
stronger Parliamentary position and Ministerial choices, several 
contacts this past week have mentioned that advocacy of reforms 
should be handled carefully, noting that it is wrong to assume that, 
because the Left is out of the way, that the government will 
wholeheartedly embrace reform.  Dr. Subir Gokarn, Senior Economist 
for Standard & Poor, Asia, told an industry seminar on May 28 to 
view the UPA's re-election mandate with caution.  Calls for reform 
should not be presented as "reform for reform's sake" but should be 
translated into "tangible outcomes for inclusive growth."  Dr. 
Saumitra Chaudhury, member of the Prime Minister's Economic Advisory 
Council, told Econoff on May 27 that reforms needed a new name, 
comparing it (with only small irony) to US Treasury's renaming of 
toxic assets as legacy assets.  Chaudhury asserted that reforms in 
India are seen as being pushed predominantly by those who most 
benefit from them.  Instead of reforms, he suggested calling 
proposed changes as something like "home improvements," that would 
address the new government's heightened focus on better service 
delivery in roads, power, schools, and teachers. 
 
Comment 
------- 
 
¶31.  (SBU) While Post still advises tempered expectations on making 
headway on key bilateral economic interests, the UPA this week sent 
an encouraging message with its selection of ministers for key 
economic and development posts.  The Prime Minister seems to have 
convinced party leader Sonia Gandhi that performance matters in 
previously marginalized ministries, such as roads, health, and 
education.  Given the low health and education indicators that 
prevail in India, these ministerial appointments are a good first 
step towards improving livelihoods in India and fulfilling India's 
potential as a sustained, inclusive, high growth economy, as well as 
expanding opportunities for mutual, bilateral trade and investment. 
The next important move will be to act quickly and decisively - the 
first 18-24 months of a new Parliamentary session are the best 
opportunity for policies that have longer-term gains but 
shorter-term costs. 
 
BURLEIGH