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Sitharaman became the first woman Defence Minister of the country since Indira Gandhi held the charge.
Sitharaman, who was holding the Commerce portfolio as a Minister of State, was elevated along with Goyal, Dharmendra Pradhan and Mukhtar Abbas Naqvi to the cabinet rank.
As the Defence Minister, Sitharaman will be a member of the crucial Cabinet Committee on Security whose members include the Prime Minister, Home Minister, External Affairs Minister and the Finance Minister.
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Modi stripped cabinet minister Uma Bharti of the charges of water resources, river development and Ganga rejuvenation and handed them over to Nitin Gadkari. Bharti will take care of Ministry of Drinking Water and Sanitation.
Pradhan was given the additional charge of Skill Development Ministry. The Prime Minister also reposed faith in the administrative capabilities of three former government officials by giving them independent charge of crucial portfolios.
Former diplomat Hardeep Puri and former IAS officer Alphons Kannanthanam have been made MoS (Independent charge) of Housing and Urban Development and Tourism respectively.
R K Singh, former Home Secretary, was given charge of Power and New and Renewable Energy portfolios. Rajyavardhan Singh Rathore replaced Vijay Goel in the Sports MInistry.Goel, who earlier held independent charge, has been shunted as the Minister of State for Parliamentary Afairs and Statistics and Programme Implementation.