There was speculation that Ponting and senior middle-order batsman Mike Hussey are in line to be axed due to a string of poor performance in the past few months but both of them managed to retain their place in the squad.
Tasmanian left-handed opener Ed Cowan and Shaun Marsh, having recovered from his back injury, have been recalled while Hughes and Usman Khawaja have been shown the door.
Interestingly, paceman Ben Hilfenhaus has been recalled on the back of his impressive show in Big Bash Twenty20 cricket and better experience vis-a-vis other rookies in the home bowling line-up.
Even though Peter Siddle, Mitchell Starc and James Pattinson are part of the squad, Hilfenhaus` experience could be invaluable to the team looking to rein in the likes of Virender Sehwag, Sachin Tendulkar, Rahul Dravid and VVS Laxman.
Hilfenhaus set the tongues wagging with his fiery spell for Hobart Hurricanes against Perth Scorchers earlier this week, watched by Australian coach mickey Arthur.
Cowan has forced his way into the squad on the back of his four consecutive centuries, including 109 made against the Indians themselves in the three-day match for Chairman`s XI at Manuka Oval on Monday.
Cowan had an indifferent start to the season but found his rhythm with an unbeaten 91 in a limited overs match. His scores in last few matches have been 4, 134 not out, 145, 10, 65, 145 not out and 109.
Marsh has been included as a cover for opener David Warner who too has been troubled by a back injury. Marsh would also need to show his fitness in order to be considered to play the Boxing Day Test.
All-rounder Shane Watson and fast bowler Ryan Harris were not picked due to continued worries on the fitness front.
Watson aggravated his calf injury on the first day of the batting camp in Melbourne on Tuesday while Harris indicated he was not entirely fit after playing for Brisbane Heat at Gabba last night.
Chief selector John Inverarity, while announcing the squad said, "Ed Cowan has been in excellent form in recent weeks. His inclusion is in recognition of his consistently good performances and we anticipate that he can provide steadiness at the top of the order. Ben Hilfenhaus has regained for this season and he provides and strong and reliable bowling option." "We see both Phillip Hughes and Usman Khawaja as developing players with bright futures and remaining as players of significance. They are determined, young, men and I know they will work hard to produce compelling performances and push strongly for further consideration," he added.
Hilfenhaus has played 17 Tests for Australia and picked up 55 wickets at 34.65. He last played for Australia at Sydney against England at the start of the year.
Also included in the team is Daniel Christian who Arthur reckons can turn out to be a genuine all-rounder for the side.
Christian, who played for Deccan Chargers in the IPL, is a right-handed paceman and fast bowler and is yet to play a Test or a one-day international.
Arthur has been said that since there are back to back Tests at Melbourne, the bowling load can be too much for team`s four-pronged attack. Christian could offer relief with his medium-fast overs.
The Australian squad: Michael Clarke (c), Brad Haddin (vc), Dan Christian, Ed Cowan, Ben Hilfenhaus, Mike Hussey, Nathan Lyon, Shaun Marsh, James Pattinson, Ricky Ponting, Peter Siddle, Mitchell Starc, David Warner.