(Updates with cabinet approving asset sales)
By Manoj Kumar
NEW DELHI, Sept 10 (Reuters) - Indian Finance Minister Arun Jaitley was released from hospital on Wednesday after a longer-than-expected stay for treatment, and will miss a meeting of finance ministers from the Group of 20 nations in Australia next week.
Jaitley was admitted to a private hospital in New Delhi on Sept. 1 for planned surgery to manage a long-standing diabetic condition. He had been expected to leave after a few days.
The 61-year-old minister underwent a minimally invasive gastric bypass procedure, intended to cut appetite and prevent the weight gain that often accompanies the condition.
Pardeep Chowbey, the director of the Max Institute hospital where Jaitley was treated, said the procedure had been successful, helping the minister to reduce his weight by 14 kg to 104 kg (229 pounds).
"His diabetes is now under control and his kidneys are functioning much better," Chowbey told Reuters, adding Jaitley would now be fit to travel.
The former lawyer is one of the most powerful figures in the Hindu nationalist government formed in May by Prime Minister Narendra Modi, holding responsibility for both finance and defence.
"The minister will not attend the G20 meeting, though he would start attending the cabinet meeting from today," said finance ministry spokesman D.S. Malik.
Jaitley attended a cabinet meeting that approved the sale of shares in state-controlled oil company ONGC, Coal India and power company NHPC, a key part of efforts to raise revenues and curb government borrowing. His absence had held up the cabinet decision to sell the stakes.
Although Jaitley made no secret of his condition, some commentators questioned whether he was strong enough to run two big ministries. Delivering his maiden budget in July, he took a break half-way through and gave the second part of his address seated.
In a government short of cabinet bench strength, Jaitley's health over the next few months will be critical to the success of economic reforms, such as a proposed nationwide goods and services tax, or GST.
The GST would unify India's 29 states into a common market for the first time, cutting red tape while broadening the government's tax base. Economists estimate it could add 2 percentage points to India's economy.
Jaitley will be represented at the Sept. 20-21 meeting of G20 finance ministers in Cairns, Australia, by Commerce Minister Nirmala Sitharaman, who also holds the post of deputy finance minister.
The Group of 20 is the world's main intergovernmental policy forum, bringing together developed and emerging nations that among them account for nine-tenths of global economic output. (Reporting by Manoj Kumar; Writing by Douglas Busvine; Editing by Clarence Fernandez, Larry King)