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Ex-soldier Singh to push economic reforms

Patrician ex-soldier Jaswant Singh, appointed India's new finance minister on Monday, represents the liberal, market-friendly face of the ruling Bharatiya Janata Party.

Singh swapped jobs with Yashwant Sinha, who will now take over as external affairs minister after Prime Minister Atal Bihari Vajpayee reshuffled his government in a bid to overhaul the 33-month-old Hindu nationalist-led coalition.

Analysts say the decision to move Singh, 64, signals a desire to revive economic reforms after an easing in a military standoff with nuclear-armed rival Pakistan.

It also gives Singh the responsibility of bolstering the BJP's public appeal -- which has taken a beating due to some harsh economic measures -- ahead of a series of provincial elections and federal elections due in two years.

Indian markets were neutral to news of the swap though shares and the rupee both gained on Monday, a development analysts credited more to signs of economic recovery rather than the financial reshuffle which was announced after the markets closed.

Those signs could also provide Singh an advantage as he grapples with economic liberalisation and a gaping budget deficit, a far cry from jet-setting across the world as foreign minister to mobilise global opinion against Pakistan-sponsored terrorism in Kashmir.

Singh, who breathed diplomacy and foreign affairs and is known for his baritone, measured speaking style, is expected to pursue the broad government programme to deregulate the economy, sell state-run firms and plug the budget deficit that hit 5.7 per cent of GDP in fiscal 2001-02.

Analysts say Singh's shift from foreign affairs has more to do with Sinha, who faced criticism from within the BJP over a failure to sell economic reforms and for policies which alienated the middle classes, the BJP's core constituency.

Free marketer

Indian economic growth rose to 5.4 per cent in the financial year ending in March 2002 -- high by most countries' standards but not high enough in the country of one billion people to make any serious dent on poverty.

India's 11-year-old reforms programme -- meant to raise economic growth to nearer 10 per cent a year -- has slowed due to protests from the opposition, government allies and unions.

Singh is expected to push that pace up.

During his first stint as finance minister -- when the BJP was in power for just 13 days in 1996 -- Singh opened his arms to foreign investors then but also said investment should be channelled into infrastructure projects including power, ports, telecom and roads.

The former career army officer's free trade agenda was also laced with a dose of protectionism when he said he wanted to defend Indian firms from "predatory takeovers" by multinationals.

But as foreign minister he has been one of the strongest advocates of closer ties with the United States.

These have improved since the end of the Cold War, during which India had thrown in its lot with the former Soviet Union.

A widely read and articulate politician, Singh belongs to the ruling elite from the desert state of Rajasthan, bordering Pakistan in India's west. Listed among his interests are horses, equestrian sports, music, golf, environment, wildlife and chess.

"Jaswant Singh is a progressive person and he is an old hand. He is savvy and has been a successful foreign minister. There should be no doubt about his ability to push through economic reforms," Sanjeet Singh, an analyst with ICICI Securities, said.

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