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At a press conference in Lucknow, Vajpayee said representatives of supporting parties like the Trinamool Congress and Pattali Makkal Katchi would be inducted into the Cabinet.
Asked if the BJP's coalition partner in Uttar Pradesh, the Bahujan Samaj Party, would be part of the exercise, he said the reshuffle would involve National Democratic Alliance partners and the BSP was not part of it.
He said the reshuffle was aimed at bringing greater efficiency in the government and improving contact with the people.
"We have now started an exercise to make the government sensitive and responsive to people's aspirations," he said, adding that time had come to take stock of the government's functioning.
He also said that the appointment of a deputy prime minister was being considered.
"A proposal for a deputy prime minister has come. It is being considered. Consultations with NDA allies are on and a decision will be taken soon."
Replying to a question, the prime minister said that Jammu and Kashmir Chief Minister Farooq Abdullah was considered for the vice-president's post, but the decision was changed.
He said that the government had consulted the chief minister on the presidential candidate.
"He knew everything," Vajpayee said, adding that Abdullah had met him recently and given the assurance that his party, the National Conference, would remain a part of the NDA.
Declaring that assembly elections in Jammu and Kashmir would be free and fair, Vajpayee said the Centre would even consider imposing governor's rule, if necessary, during the polls.
Asked whether the Centre would hold talks with the All Party Hurriyat Conference, he said the government was always ready provided it was "unconditional".
He, however, pointed out that the Hurriyat had refused to speak to the Centre's interlocuter K C Pant.
When asked whether the appointment of the Vinay Katiyar as the UP BJP president was reflective of party's attempt to revive its Hindutva agenda, he asked, "When did the BJP abandon the Ram Temple issue."
On being asked for his comment on the Vishwa Hindu Parishad's decision not to abide by the court verdict on the vexed issue, he said "We favour a negotiated settlement or accept a court verdict."
PTI
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