Chidambaram Is New Home Minister, Singh Keeps Finance

By Bibhudatta Pradhan and Pratik Parija

Nov. 30 (Bloomberg) -- Palaniappan Chidambaram took over as India's home minister, replacing Shivraj Patil, who resigned today after owning moral responsibility for the worst terrorist attack in the nation in 15 years.

The attacks in Mumbai, which began on Nov. 26 at two luxury hotels, a railway terminal and a building housing a Jewish center, lasted until yesterday morning, leaving 195 people dead.

Prime Minister Manmohan Singh appointed a new home minister after Patil was criticized by opposition parties and others for intelligence and operational failures, apart from decision- making delays, in tackling this and other terrorist attacks in India. About 300 people have died this year in India as bombs have exploded in markets, mosques, bus stations and theaters, with most of the attacks still unsolved.

The new appointment was announced by the president of India in a press release issued in New Delhi. The finance portfolio will be held by Prime Minister Singh, President Pratibha Patil's office said. Singh, a former central bank governor, has served as finance minister before and is credited with starting India's economic-reform program in 1991.

Chidambaram, finance minister since 2004, when Prime Minister Singh's government came to power, will take over the home ministry after having steered India's economy through record growth.

With general elections due by May, the current government won't present a full-fledged budget in February for the next financial year, which starts April 1.

Home Ministry Experience

The new home minister has previous experience of the ministry. He served as junior minister for internal security from 1986 to 1989 under the late prime minister Rajiv Gandhi.

Chidambaram and Reserve Bank of India Governor Duvvuri Subbarao have been seeking to loosen fiscal and monetary policy to shore up growth in Asia's third-biggest economy and unlock a credit freeze that took hold in September.

Economic growth in the year to March 31 will slow to 7-8 percent because of the financial turmoil before rebounding to 9 percent in the following year, Chidambaram has said.

Chidambaram has been a key member of the administration's economic team, along with Prime Minister Singh and Montek Singh Ahluwalia, deputy chairman of the Planning Commission.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net.