New Delhi:
Jaipal Reddy, who is seen as the biggest loser in the cabinet reshuffle, is reportedly deeply upset by his transfer from the Oil Ministry to Science and Technology, widely perceived as a demotion. Publically, he has denied he is unhappy.
Mr Reddy's aborted term as Oil Minister has been attributed to his run-in with Reliance Industries, owned by Mukesh Ambani. The veteran Congressman arrived at his new ministry a little after 5 on Monday evening and was his usual affable self, shared a few laughs with gathered media men and said he was "intellectually excited" to take charge of the Science and Technology Ministry. But he was more philosophical, less emphatic in his denial that he was upset, refusing to comment on the petroleum ministry he just lost and talking ideology instead. He said, "My relationship with my PM is excellent. He has always shown affection and implicit trust in me." "My effort has always been to be a faithful party man and a truthful minister."
His supporters say Mr Reddy's options are limited, and while he is reportedly considering registering some sort of protest with his party, he will have to ride out the impact of his move.
Mr. Reddy was not present today at the petroleum ministry when his successor Veerapa Moily took charge; outgoing junior minister R.P.N. Singh, who will now be minister of state for home affairs, was there. Mr Reddy is expected to take over his new charge of Science and Technology only in the evening. Mr Moily reportedly visited Mr Reddy at his residence this afternoon. He has described it as a courtesy call.
"My predecessor, Mr. Jaipal Reddy, has done a wonderful job... he has really maintained the highest standards and probity in administration," Mr Moily said earlier this morning, also seeking to dismiss speculation that Mr Reddy was shunted out corporate pressure. The new petroleum minister said: "We do not work with any vested interests. When a government functions, it is not to benefit one or two companies or one or two individuals."
The BJP wants the government to explain the reasons for Mr Reddy's transfer. "Was there pressure from industrial houses?" asked the party's Venkaiah Naidu. Arvind Kejriwal, who launched an anti-graft party this month, was more direct. "Why did Jaipal Reddy lose his job? For resisting Reliance?" he tweeted.
Former Infosys director Mohandas Pai said yesterday that Mr Reddy's ouster was a "big negative". Mr Reddy, he said, "took a tough stand against a few corporate interests and he has been shifted out is a negative. Prima facie it shows that corporate lobbies work in India, large corporate houses can bend the government to their interest. And if the new minister doesn't stand firm and caves in and doesn't protect the country's interest and consumer interest then I think this government will stand accused of being capable of being manipulated by corporate interests. I think it is a big negative."
However, Mr Reddy's term has also been criticized for indecision and he was seen as having been a reluctant party to fuel reforms. An analyst at global investment bank Barclays said today that Mr Reddy was seen as too conservative and a minister who did not take decisions and that new Petroleum Minister Veerappa Moily was perceived to be more "pragmatic".
During his term, Mr Reddy has been criticised for delays in granting approvals to big deals. The purchase of Cairn India by UK-based Vedanta, a $9 billion deal, took months to get approval and through much back and forth, Mr Reddy was resolute that he would rather be safe than sorry. There was also a six-month delay in approval for a Reliance Industry Limited or RIL deal with British company BP. The $7.2 billion RIL-BP deal was put up for Cabinet approval despite 100 per cent foreign direct investment being allowed in the upstream oil sector. Then, even after the Cabinet's nod, the formal inclusion of BP in all 21 RIL operated block is pending.
Mr. Moily today pointed out that India had the potential to attract more than $50 billion in investments, and stressed that his "emphasis will be on quick decision making and innovation. Decisions should not be delayed. Delaying decisions will cost the nation. We do not want any delay in decisions." The new minister was clear about what he would not do. "Many a times it happens (that) you avoid taking decisions. That is not a solution. Avoiding or delaying decision is not a solution. And this is where we need to very seriously work on."
Kamal Nath, who took over as Parliamentary Affairs Minister today, said a reshuffle was the PM's prerogative. "The BJP had so many reshuffles, did we question motives ever?" Mr Kamal Nath asked.
Mr Reddy took over as Oil Minister in January 2011, replacing Murli Deora. He took on Reliance on multiple fronts over its DG gas fields in the Krishna Godavari (KG) basin off India's east coast. Once India's second-biggest producer of natural gas, the DG fields have been under-performing.
The Reliance-led consortium has said the problems are related to geological complexities. But Mr Reddy had asked arbitrators to look at the matter.
Reliance says it should be paid more for the natural gas it produces from the D6 fields because global prices of gas have been climbing. Mr Reddy refused.
Just last week, after months of warring, the Oil Ministry signed off on the company's plans to increase the output of natural gas.
The government also agreed that its auditor, the CAG, is not entitled to audit Reliance Industries for performance which would have measured the efficacies of the processes and technology it uses in its deep-sea operations. A financial audit of the company's spending on the KG-D6 block will however proceed.
The Oil Ministry had withheld approvals for Reliance's investment plans for the gas fields arguing that it must first allow an audit of the KG-D6 field from 2008-2012.
With a compromise reached on the audit, RIL can now implement urgent remedial measures at KG-D6 where output has dipped by more than 55 per cent in past two years.
In 2009, an audit by CAG had questioned the rationale of costs as billed by Reliance and had recommended that the government reconsider the profit-sharing agreement with the company.
In the 21 months that Mr Reddy was oil minister, RIL's share price saw a 26 per cent erosion - from Rs 1,076 per share then to Rs 799 per share now.
(
With inputs from agencies)