NEW DELHI (Reuters) ? Prime Minister Manmohan Singh is expected to make only minor changes to his cabinet on Tuesday, counting on veteran finance and interior ministers to help battle policy paralysis and rampant corruption in Asia's third-largest economy.
Avoiding a major reshuffle of the Congress party-led coalition government is likely to disappoint investors and those in civil society who had hoped for an injection of fresh blood to tackle poor governance, high inflation and economic reforms.
Congress party sources said that the finance, interior, foreign and defence ministers were expected to stay put.
"This is really an indication of a government that has become indecisive and that doesn't know what is in its best interest," said M.J. Akbar, editor of news magazine India Today.
"If there is a deadlock at the top then the deadlock can only be loosened by changes at the top...more of the same isn't going to solve the problem."
Halfway through his second term, Singh's reformist image has been hit by multi-billion dollar corruption scandals, weak leadership, infighting and a sense of complacency by many politicians focused more on enjoying the fruits of power.
Many had hoped Singh would use a cabinet revamp he announced earlier this year to try to regain the initiative. It is his second attempt this year after a reshuffle in January was criticised for only moving tainted ministers to new portfolios.
Singh is expected to tweak the line-up to accommodate coalition partners' wishes and fill posts made vacant when the former telecoms minister was arrested and his party colleague, the textile minister resigned -- both over graft allegations.
PARTY POLITICS
Government survival is so far not under threat. The opposition is weak and does not want a snap general election halfway through Singh's second term, this is one reason many say Singh is reluctant to push for a major cabinet reshuffle now.
"From a reforms point of view, I don't think it's going to make much of an impact," said a senior government source.
Congress is instead more concerned with politics aimed at staying in power -- like a popular but expensive scheme to provide jobs for the rural poor -- while Singh and some of his ministers and officials are seen as more reform oriented.
Congress is preparing its election campaign in the state of Uttar Pradesh next year -- a vote that will set the stage for a 2014 general election that could usher family scion Rahul Gandhi into the national race.
"Singh has an image problem but he has to take the call if he wants to change this now, in six months or a year down the road," said Sanjay Baru, Singh's media adviser in 2004 to 2008.
Bills to overhaul land acquisition policy, an archaic taxation system and to liberalise foreign direct investment rules have suffered as the government drifts, dampening market performance and spooking investors.
There are ominous signs, from weaker car sales to a dip in steel imports and FDI, that have coincided with global worries that emerging markets could soon hit a financial bump.
Given its 1.2 billion population and vast chunks of the economy being undeveloped, foreign and local investors view India as a hot investment destination in the long term, despite facing some short-term challenges.
(Additional reporting by Nigam Prusty, Abhijit Neogy and Krittivas Mukherjee in New Delhi; Editing by Nick Macfie)
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