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| Tuesday, 25 May 2004 |
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New Indian government gets to work with Kashmir, markets on its mind NEW DELHI, Monday (AFP) India's new government, dominated by experienced political hands, was getting to work Monday on preserving stability on the markets and in troubled Kashmir, while pushing social policy to the left. The cabinet assignments handed down by Prime Minister Manmohan Singh, a 71-year-old economist, gave top slots to veterans of his Congress party, in power for the first time in eight years. But even before the cabinet could meet, 28 Indian soldiers and their relatives were killed on a Kashmir highway in the deadliest landmine attack ever by Islamic rebels fighting Indian rule in the disputed territory. The first cabinet meeting Sunday condemned the Kashmir bloodshed with Singh vowing to continue to seek "a peaceful solution to outstanding problems" while fighting "the menace of terrorism with firm determination." Singh is most identified with opening up the Indian economy starting in 1991. He picked as his finance minister Palaniappan Chidambaram, another favourite of the markets which had initially crashed when the communist-backed coalition pulled an upset election victory this month. The Harvard-educated Chidambaram had thrilled industry when he followed Singh as finance minister from 1996 to 1998 and pushed an agenda of lower import tariffs and taxes. But while trying to keep the markets stable, Singh seemed more ready to shake the boat in social policy. A Sikh, Singh is the first religious minority prime minister. His human resources minister, Arjun Singh, whose charge covers schools, Sunday promised unspecified changes saying the Hindu nationalists had "messed up" education. Congress leaders have accused the previous government of distorting history books to portray religious minorities as villains and of failing to protect Muslims from vigilante violence in Hindu nationalist-ruled Gujarat state. Pranab Mukherjee, the new defence minister, said after being sworn in that the Congress-led government would "ensure that social harmony is maintained." "There should be no tension (among communities). If there is any tension, it should be defeated," Mukherjee said. Only one woman was among the 28 full ministers in the cabinet: Meira Kumar, who was given the social justice and empowerment ministry. The foreign ministry went to Natwar Singh, a 73-year-old diplomat and literary critic who as a Cambridge student savoured his correspondence with "Passage to India" novelist E.M. Forster, about whom he later wrote a book. Natwar Singh drafted an election statement that accused the last government of making India "subordinate" to the United States. Washington has said it wants to work with the new government to expand the bilateral relationship that grew dramatically under the last premier, Atal Behari Vajpayee. The Congress-led coalition pulled off the election victory with a campaign geared towards the rural poor disenchanted with the Hindu nationalist slogan that India was "shining." Meanwhile Indian shares jumped 2.11 percent in Monday morning trade as investors cheered the new finance minister seen as father of the nation's economic liberalisation, dealers said. The BSE 30-share benchmark Sensex index was up 104.65 points at 5,066.22 percent after Singh announced late Sunday that Palaniappan Chidambaram, an economic reformer and market favourite who served as finance minister in the 1990s, would hold the portfolio again. "The market has welcomed the new team very well, especially now that you have two able men who understand the economy - Singh himself as the prime minister and Chidambaram," said Vijay Tilakraj, dealer at KJMC Capital Market. "Chidambaram knows the state of the economy and the market is happy with his being named finance minister," said Tilkaraj. Dealers said despite Monday's early gains, the market was still cautious as underlying sentiment remains watchful after last week's volatility. |
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