Piyush Goyal
Coal and Power Minister Piyush Goyal.Reuters

In a major Cabinet reshuffle expected after the annual Budget, Prime Minister Narendra Modi is likely to move Minister of State for Power and Coal Piyush Goyal to the finance portfolio, replacing Arun Jaitley, a Reuters report said on Friday

Although reports of a possible Cabinet revamp have emerged in the past few weeks, the finance minister's position has attracted attention in the wake of growing criticism over the BJP-led government's inability in Parliament to pass key reforms, including the Goods and Services Tax (GST) Bill.

Jaitley could be assigned the Defence Ministry in the Cabinet revamp, the report said, quoting sources close to the developments.

"But Finance Minister Arun Jaitley, responsible for delivering the Modi message to international investors, may move to defence after he delivers his annual budget in late February," sources told the news agency.

Jaitley held the defence portfolio in the first few months after the formation of the Modi government. Moving Jaitley back to defence "could better suit the veteran corporate lawyer and keep the strategically important portfolio in trusted hands", the report said.

Goyal, an investment banker-turned-politician, is likely to be promoted to the big role following his tackling of chronic power shortages and backing of renewable sources of energy.

He is already "being groomed" for the new role, a Central minister and two BJP officials told Reuters, adding that the minister had already been given a white paper on banking to "seek his inputs".

"Goyal is doing a fine job — he has brought a lot of energy to the coal and power sector," said Rajiv Kumar, senior fellow at the Centre for Policy Research in New Delhi. "But I'm not sure he can do justice to the complex finance portfolio." 

Also, the Cabinet reshuffle assumes importance in light of the Assembly elections in Uttar Pradesh next year. Modi may retain Amit Shah as BJP president, taking into account the crucial test for the party in the state elections.

"If Shah wins Uttar Pradesh, no one can stop Modi from becoming prime minister again," said a senior BJP leader.