India's cabinet Thursday approved the appointment of an inquiry to examine allegations that former foreign minister Natwar Singh benefited from the United Nations oil-for-food program for Iraq.
A UN report said Natwar Singh and the ruling Congress Party benefited from the program, an allegation which forced the minister to step aside from his position.
"The Justice R.S. Pathak Inquiry Authority is being set up under the resolution of the cabinet and will be clothed with all statutory powers as desired by the authority itself," Finance Minister P. Chidambaram told reporters after the cabinet meeting.
Chidambaram said setting up an inquiry authority instead of a higher-ranked commission would make "no difference in terms of the objectives to be achieved."
India's former chief judge R.S. Pathak will look into the claims made in the UN report by former US Federal Reserve chairman Paul Volcker.
The Volcker report - which caused a political furore in India - named Natwar Singh as a non-contractual beneficiary of four million barrels of Iraqi oil allotted to Zurich-based firm Masefield AG.
The Congress party, India's oldest political entity, was also listed as a beneficiary of a separate allotment of four million barrels of oil.
Natwar Singh will remain in the cabinet as minister without portfolio, and Prime Minister Manmohan Singh will take over as foreign minister pending the outcome of the probe ordered Monday.
If cleared by the inquiry, Natwar Singh will resume his duties as foreign minister.
The government also appointed former senior diplomat Virender Dayal to obtain information about the charges against the ruling party and its members.
The government says the inquiries by Pathak and Dayal are independent of each other.