GOI PORTFOLIOS ANNOUNCED INCLUDING NEW FOREIGN

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 001062 SIPDIS DEPARTMENT FOR OPS, P (WEST),SCA (BLAKE) NSC FOR CAMP E.O. 12958: DECL: 05/26/2019 TAGS: PGOV PTER PREL PINR KDEM EAGR IN SUBJECT: GOI PORTFOLIOS ANNOUNCED INCLUDING NEW FOREIGN MINISTER, S.M. KRISHNA REF: NEW DELHI 1056 Classified By: A/PolCouns Les Viguerie for Reasons 1.4 (B, D) ¶1. (C) Summary: At a Cabinet meeting on May 23, the newly formed Indian government announced six major portfolios: -- S.M. Krishna, External Affairs -- Pranab Mukherjee, Finance -- P. Chidambaram, Home -- A.K. Antony, Defense -- Sharad Pawar, Agriculture -- Mamata Banerjee, Railways Former Karnataka Chief Minister S.M. Krishna, and the new Congress Party ally in West Bengal, Mamata Banerjee, are the only new faces among the six. Krishna - a Rajya Sabha backbencher - stands in stark contrast to his predecessor at External Affairs, Pranab Mukherjee, who remains the ultimate Congress Party operator and fixer. With Mukherjee wanting a move to Finance, Congress Party leaders appear to have chosen Krishna as a safe pair of hands, someone non-controversial and without deep ambition. This likely means Prime Minister Singh, and the External Affairs bureaucracy, will have a large hand in shaping Indian foreign policy over the next several years. Other portfolio allocations including Commerce and Industry, Civil Aviation, Petroleum and Human Resource Development, along with a second tranche of Ministers that were originally scheduled to be announced today, will likely be announced later this week. End Summary. Announcement of Second Tranche Of Ministers Delayed -------------- ¶2. (C) News channels reported over the weekend that another group of Ministers (in addition to the initial 19) would be announced on May 26, but the expansion was postponed to an unspecified later date, probably before the end of the week. While the negotiations with its allies appear to have been settled, the Congress Party leadership continues to closely consider and weigh the political and managerial credentials of its own aspirants. This delay should not be cause for concern as Indian governments are typically formed after careful negotiations that take into account a myriad of caste, ethnic, religious, gender and regional concerns. While youth was not served in the first group of Ministers, we will likely see a few younger faces in the second round. Many Familiar Names -------------- ¶3. (C) Chidambaram, Antony and Pawar all remain in their respective positions from the last government. Mukherjee has moved to Finance. He had been acting Finance Minister since January, when Prime Minister Singh underwent heart surgery, and is seen as a pragmatic administrator who is open to ideas, although not necessarily focused on reforms. He is no stranger to economic policy; he was Finance Minister from 1982-1984 (when Manmohan Singh was the Central Bank Governor) and he was the Deputy Chairman of the Planning Commission from 1991-1996 (when Singh was Finance Minister) and oversaw India's most dramatic economic reforms. ¶4. (C) Mamata Banerjee, head of the West Bengal-based Trinamool Congress, will be the new Railways Minister, a position she held from 1999-2001 under the Bharatiya Janata Party-led government. Backed by a pre-poll alliance with the Congress Party in West Bengal, Banerjee dealt the ruling communists a devastating setback in the recent elections. She is singularly focused on becoming West Bengal Chief Minister in 2011 and will use her ministerial position to demonstrate her ability to govern, solidify her voter base NEW DELHI 00001062 002 OF 002 through pro-poor railway policies and increase central assistance levels to the state. S.M. Krishna External Affairs Minister -------------- ¶5. (C) Of the six appointments announced, Somanahalli Mallayya (S.M.) Krishna as External Affairs Minister is the only surprise. According to Embassy contacts Krishna was the choice of Congress Party President Sonia Gandhi. She most likely first met Krishna when he was a confidant of Rajiv Gandhi as a lower level minister in the government of Indira Gandhi during the early 1980's. He is not a political heavyweight along the lines of Mukherjee, nor does he have a well-established international reputation of his own, such as former UN official Shashi Tharoor. He is therefore not a political "threat" to any Congress Party leader, and owes loyalty for his new job directly to Sonia Gandhi. ¶6. (C) Krishna is a current Rajya Sabha member and was Chief Minister of his home state, Karnataka, from 1999-2004. Bangalore had already emerged as a world class technology hub when Krishna became Chief Minister in 1999 but he helped provide a supportive and nurturing environment for continued investment. After he and the Congress Party lost power in the state in the 2004 state assembly elections he was appointed Governor of Maharashtra - Governor posts in India are largely ceremonial retirement jobs for has-been politicians and senior civil servants - and served there until 2008. After that he made an abortive attempt to re-enter Karnataka politics during the 2008 state elections. Since then Krishna has been a little heard from Rajya Sabha backbencher. Continued Strong Bilateral Relationship -------------- ¶7. (C) Comment: With Krishna's appointment, India gains a seasoned politician as its chief diplomat and a reassuring persona to the wider world. Krishna studied law at Southern Methodist University, was a Fulbright Scholar in the 1960's and is a fluent English speaker. We expect his time in the U.S. allowed him a better understanding of American values and hope it has made him better disposed to the American approach to international engagement. Bringing back a retired politician and Gandhi family loyalist who does not appear to have any strong personal views about foreign policy means that for the next several years Indian foreign policy will be shaped predominantly by Prime Minister Singh, and the External Affairs bureaucracy. So while we may continue to have differences on some issues and will experience day to day hiccups at the working level, the state of the bilateral relationship will grow stronger, particularly since the communists will have no influence on this government. End Comment. BURLEIGH