Indian Prime Minister Modi drops ministers as economy slips

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India’s Prime Minister Narendra Modi on Sunday reshuffled some of his key minister’s portfolios to refurbish his government’s image, which has been dented by falling economic indicators.

Modi named Suresh Prabhu as the new commerce and industry minister and Piyush Goyal the railways minister. Dharmendra Pradhan was promoted as oil and gas minister. Modi dropped half a dozen ministers for failing performance.

A big surprise was 58-year-old Nirmala Sitharaman’s appointment as the country’s defense minister, an elevation from the post of junior commerce minister.

India’s economic growth rate has fallen four quarters in a row to 5.7 percent in April-June, down from 7.9 percent in the same quarter last year. Exports have stagnated for the past three years.

“It’s not easy going as far as the economy is concerned. There is a slump in the economic growth rate and industry and the farmers’ unrest over fall in incomes,” said Neerja Chowdhury, a political analyst.

Modi had promised 10 million new jobs every year when he came to power in 2014. According to government statistics, job creation for 2015 and 2016 stood at 155,000 and 200,310, respectively.

Chowdhury said that although he faces a challenging time, opposition parties are too weak to pose a serious threat to him in next national elections in 2019.

Opposition parties blamed Modi’s shock decision in November to withdraw from circulation the country’s highest-value currency bill and a nationwide tax overhaul launched two months ago as reasons for the economic downturn.


Though Modi said he was targeting tax evasion and corruption among the rich, the demonetization caused chaos across the country’s cash-dependent economy.

Raghuram Rajan, former governor of the Reserve Bank of India, said taking 87 percent of the country’s currency out of circulation created be a tremendous impact on anyone who used cash.

“It is probably fair to say that demonetization has had the largest impact on the people who transact informally, of which many might be very poor,” he said in an interview with The Times of India newspaper.

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