Nearly a dozen government employees, mostly drawn from different paramilitary forces, who were retained by Singh after his retirement have been asked to report to their respective organisations immediately, sources said.
The personnel are engaged in various secretarial work and domestic chores. A retired bureaucrat is not allowed to retain personal staff.
However, the former Home Secretary, who has joined the BJP recently, will continue to enjoy the security cover of the Delhi Police, the sources said.
The action from the Home Ministry came days after Singh claimed that Shinde had interfered with the transfers and postings of Delhi Police.
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He has also accused Shinde of having given wrong information in the matter of the US helping India bring back underworld don Dawood Ibrahim.
The former bureaucrat also remarked that Shinde was not fit to be Home Minister and said Finance Minister P Chidambaram, who is a former Home Minister, was "100 times better" than him.