Modi names Sitharaman as India's finance minister

MUMBAI/NEW DELHI/BENGALURU (Reuters) - Indian Prime Minister Narendra Modi on Friday named Nirmala Sitharaman, previously the country's defense minister, as the next finance minister, while the chief of his Hindu nationalist Bharatiya Janata Party (BJP) will become home minister.

BJP President Amit Shah masterminded the party's landslide victory in the April-May general election.

COMMENTARY

AJAY BODKE, CEO-PMS, PRABHUDAS LILLADHER, MUMBAI

“Nirmala Sitharaman is eminently qualified to steer India's economy, which is facing multiple headwinds of slowing consumption impulses, moribund private capex cycle and anemic exports.”

“With limited fiscal maneuverability, it remains to be seen how she can inject a strong dose of fiscal stimulus to revive animal spirits. She will need to strike a delicate balance between the re-distributive policies advocated by Mr Modi toward the poor & downtrodden and yet ensure the government's firm commitment to adhere to medium-term fiscal consolidation.”

N.R.BHANUMURTHY, ECONOMIST AT NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY

“The choice of Nirmala Sitharaman as the finance minister will improve optimism on the economy as with her finance and trade background she could quickly adapt to deal with the economic challenges. The new finance minister will have to take steps to revive consumer demand and investments to boost economic growth as the economy is likely to grow below 7% for second consecutive year.”

JAGANNADHAM THUNUGUNTLA, RESEARCH HEAD, CENTRUM WEALTH, MUMBAI

“The ambiguity of portfolio allocation is now removed, so this is good for the market in a sense. We will get to see Nirmala's proposals and approach in the budget, which is due in about a month.”

“Emergence of clarity is what was important, and now the narrative in markets will be about the economic policies that will be adopted to revive and stimulate the slowing economy.”

“To stimulate the economy, the Modi government must have thought it will be good to give the portfolio to someone who understood and handled commerce.”

BEKXY KURIAKOSE, HEAD OF FIXED INCOME, PRINCIPAL ASSET MANAGEMENT, MUMBAI

“It is too soon to say. I have a neutral view. We will have to wait for her to speak to get her thoughts and ideas on reforms for the markets and the economy, but it will be in line with what the BJP-led government would overall target anyway.”

SANDIP SABHARWAL, DOMESTIC FUND MANAGER, MUMBAI

“Nirmala Sitharaman is a relatively unknown entity despite holding a key portfolio in the previous government. Expectations as such will be low. From the markets' perspective, it's neutral at this stage.”