Kapil Mishra, who was the tourism and water minister in the Delhi Cabinet, was removed from his post by Chief Minister Arvind Kejriwal on Saturday.
He was also removed as the chairman of the Delhi Jal Board.
Meanwhile, Rajendra Gautam and Kailash Gahlot have been included in the Delhi Cabinet.
Mishra was believed to be close to senior party leader Kumar Vishwas, who was earlier this week given charge of Rajasthan where assembly elections are due to be held late next year.
Meanwhile, Deputy Chief Minister Manish Sisodia said, "Water management was not up to the mark. Kapil Mishra made a lot of effort. The Chief Minister decided to bring in Kailash Gahlot in his place."
He added that two persons have been included in the Cabinet now-- Kailash Gahlot and Rajendra Gautam for a post which was vacant.
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