With the new cabinet likely to be announced this week itself, there is intense speculation on who will hold the key finance portfolio. Most observers seem to think that it is a toss-up between current incumbent Pranab Mukherjee and the outgoing deputy chairman of the Planning Commission, Montek Singh Ahluwalia.

However, there are other dark horses in the race, such as erstwhile commerce minister Kamal Nath and former Reserve Bank of India governor Chakravarthy Rangarajan, who initiated several reforms during his term from 1992-97. Palaniappan Chidambaram may also regain the ministry he held earlier, but most observers say he is likely to continue as home minister.

Mukerjee, who is acting finance minister, is considered the frontrunner for the post while Ahluwalia's candidature is also being discussed, The Economic Times reported today, without citing any sources. It also said that while Prime Minister Manmohan Singh favoured Ahluwalia, the final decision would be taken by the party high command.

Ahluwalia declined to comment on his possible appointment, dismissing it as media speculation. After Chidambaram was shifted from the finance ministry to the home ministry following the Mumbai terror attack, Ahluwalia played an important role in drawing up the stimulus package to spur demand in the economy.

Though the prime minister and later external affairs minister Pranab Mukherjee handled the finance portfolio, Ahluwalia is said to have played a major role in preparing the vote-on-account document.

Ahluwalia, 65, is a votary of higher spending on infrastructure to sustain an average annual economic growth rate of 9 per cent in the five years to 2012, even if the government exceeds fiscal deficit targets. The next administration needs to cut interest rates and unveil stimulus packages of as much as 1 per cent of gross domestic product to revive a slowing economy, Ahluwalia has said.

Mukherjee too can be said to have strong credentials for the post - especially as an influential section of the party wants a politician rather than a bureaucrat appointed to the post, presumably because he would be more flexible in accommodating political demands.

The 73-year-old foreign affairs minister added the finance minister's portfolio after Chidambaram moved to the home ministry. Mukherjee unveiled a stimulus package, the government's third, in February that included lowering retail fuel prices, cutting taxes on consumer products and injecting capital into state-run banks.

Mukherjee, probably the most influential member of the UPA cabinet, was India's commerce minister in 1980 and finance minister from 1982 to 1984.