NEW DELHI // Narendra Modi was sworn in on Monday as the 15th prime minister of India, alongside a small, lean cabinet of ministers that embodies the first half of his promise of “minimum government, maximum governance”.
President Pranab Mukherjee administered the oath of office to Mr Modi and his cabinet at Rashtrapati Bhavan, the presidential residence. The ceremony drew 4,000 guests, making it the biggest ever prime ministerial inauguration. Past ceremonies have had a maximum of 1,500 guests.
Amid tight security, and watched by parliamentarians, the heads of state of several South Asian countries, party workers and celebrities, Mr Modi, speaking in Hindi, promised to “do right to all manner of people in accordance with the Constitution and the law, without fear or favour, affection or ill-will.”
The outgoing prime minister, Manmohan Singh, was in attendance, as was Sonia Gandhi, the president of the Congress party, which lost the election so comprehensively to Mr Modi’s Bharatiya Janata Party (BJP). Rahul Gandhi, Ms Gandhi’s son and the vice president of the Congress, was present as well.
After Mr Modi was sworn in, only an additional 45 ministers – cabinet-rank as well as junior ministers of state – took the oath.
In contrast, the previous government, led by the Congress, had 29 ministers in its cabinet and an additional 12 outside the cabinet but in charge of various ministries. Along with the ministers of state, the total sometimes exceed 70.
Aakar Patel, a Bangalore-based political analyst, said the cabinet size reflected how Mr Modi liked to work. Even as chief minister of Gujarat state, “he put together a small team that he could work well with,” Mr Patel said. “He believes that others don’t have the drive that he does, so he’d rather do the work himself.”
Contrary to expectations, Mr Modi did not give himself charge of multiple ministries, as he did while chief minister of Gujarat.
Instead, he put other ministers in charge of clustered portfolios that, in previous governments, were served by different ministries. This has helped shrink the size of the cabinet.
For example, Ravi Shankar Prasad, formerly the deputy leader of the opposition in the Rajya Sabha, parliament’s upper house, will be in charge of both telecommunications and law ministries. Ram Vilas Paswan, leader of the Lok Janshakti Party in the BJP’s electoral alliance, will tend to the consumer affairs ministry as well as the food ministry.
Senior BJP leaders were given four prime posts in the cabinet.
Sushma Swaraj, who was the leader of the opposition in the Lok Sabha, parliament’s lower house, during the last government, will be India’s new minister of external affairs. Arun Jaitley, the previous leader of the opposition in the Rajya Sabha, will head the finance ministry as well as the defence ministry.
Rajnath Singh, the president of the BJP, was named home minister, contrary to Mr Patel’s expectation that Mr Modi would head the home ministry himself, as he did in Gujarat.
Mr Modi did, however, move a key part of the home ministry – the department of internal security – to the prime minister’s office.
No minister was named for the industry portfolio, suggesting the Mr Modi may retain it for himself, given the emphasis of his election campaign on rejuvenating the economy.
The new cabinet is a releatively young one – senior BJP leaders such as LK Advani and Murli Manohar Joshi did not make the cut because Mr Modi refused to include anybody over 75.
Throughout Monday, Mr Modi held short meetings with the leaders of the eight South Asian nations whom he had been invited to New Delhi for the inauguration. These included the Sri Lankan president Mahinda Rajapaksa and the Pakistani prime minister Nawaz Sharif.
Srinath Raghavan, a senior fellow at the Centre for Policy Research, a New Delhi-based think tank, told The National that these meetings would be "useful for Modi and his team to get to know these leaders in person. After all, they'll have to start formulating foreign policy with these nations very soon."
Mr Sharif and Mr Modi will hold another meeting in Tuesday.
“Why not turn the similarities [between India and Pakistan] into our strength?” Mr Sharif told the NDTV news channel on Monday.
“I very much look forward to meeting Mr Modi. We should remove fears mistrust and misgivings about each other.”
ssubramanian@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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