Congress party picks Singh to lead India again

Newly elected Congress lawmakers today formally chose Prime Minister Manmohan Singh as their leader for a second term, clearing the way for the swearing in of his new government this week.

Sonia Gandhi, the Congress Party chief, proposed Singh's name, and lawmakers approved it without a vote amid clapping and the thumping of desks, said party spokesman Janardhan Dwivedy.

Singh is expected to meet President Pratibha Patil tomorrow to set a date for his swearing in. The president administers the oath of office to the new prime minister and Cabinet ministers.

The Congress-led coalition captured 261 seats in India's 543-seat Parliament, far more than most analysts predicted, but still 11 short of a majority.

On Tuesday, two key regional parties — Bahujan Samaj Party and Samajwadi Party, which together will control 43 seats — offered to support Singh's government.

Congress has governed for nearly 50 years of modern India's 61 years of independence.

Sonia Gandhi, the Italian-born widow at the head of the country's most powerful political dynasty, turned down the prime minister's job five years ago, paving the way for Singh to take power.

An economist and technocrat, Singh shifted India away from decades of socialist-style policies and toward a more open economy when he was finance minister in the early 1990s.

But over the past five years, many additional market reforms that Congress backed were blocked by India's once-powerful communist parties. In the election results announced Saturday, the communists lost more than half their seats.

With a free hand, Singh is likely to open India's insurance, retail and banking sectors to greater foreign investment. The nation's pension regulator could also get proper legal standing, which would also encourage greater investment. And some steps might be taken to loosen hidebound labor laws, like allowing contract labor.

The Congress Party, however, is keenly aware that a third of India's nearly 1.2 billion people live in extreme poverty and more than 90 per cent work in informal, unorganized sectors.

In his last term, Singh oversaw a costly initiative to guarantee employment for the poor in rural India and alleviate farmer debt. But those programs have added to the nation's already onerous fiscal deficit and antagonized factory owners who say workers have grown lazy on government aid.