Leading article: India confirms its status as a democratic beacon

Not for the first time, India has confounded expectations. Many assumed that the twin blows of the Mumbai terror attacks and the global recession would result in defeat for the Congress Party in this spring's elections. Predictions abounded of a resurgence of the forces of Hindu nationalism, caste-based populism and regional separatism.

Instead, the world's most populous electorate, after a month of voting, has delivered a sweeping victory for the incumbent government. The main opposition, the chauvinist Bhayarati Janata Party, was roundly rejected. So were the smaller parties of the unreconstructed left.

Happily, most of India's 420 million voters rejected the siren calls of religious sectarianism, narrow caste interest and local grievance, preferring the inclusive and tolerant message of Congress and its allies. The party also did an impressive job of appealing to India's younger voters - something for which that scion of the Gandhi/Nehru clans, Rahul Gandhi, has been awarded particular credit.

Dr Manmohan Singh becomes the first Indian prime minister to return for a second term in 25 years. And just as important, Congress's leaders now have a clear mandate for economic reform. Because the Congress-led United Progressive Alliance now has more seats than in the previous parliament, the government will no longer have to rely on the votes of its former Communist coalition allies.

They should be able to reduce impediments to foreign investment, dismantle farm subsidies, and resist pressure for further trade barriers. The enthusiastic response of the financial markets yesterday to the election result was a clear indication that India's burgeoning business community expects the government to unleash their nation's full economic potential.

Of course, no one expects India to change overnight. The country still suffers from significant problems. For all the economic growth of recent years, India still has more people living in absolute poverty within its borders than any other nation. Corruption is common and the bureaucracy stifling. Communal tensions also continue to run deep in many regions.

In policy terms, although the economic instincts of the government are generally sound, there are blind spots. Ministers have been dragging their feet on tackling climate change, despite India's particular vulnerability to the effects of global warming. The United Nations climate change negotiations in Copenhagen in December will be a test.

There will be foreign policy challenges ahead too. Delhi's relations with Islamabad, while not as chilly as in the past, remain potentially volatile, as the aftermath of the Mumbai attacks demonstrated.

Yet for this chaotic nation - with its almost unfathomable religious, linguistic and social diversity - not only to hold free and fair elections but also to deliver stable government is a truly remarkable achievement. And all the more so when one considers the condition of its neighbours, with crisis-stricken Pakistan to the north-west and authoritarian China to the north-east.

India is a true democratic beacon. And now its leaders have a golden opportunity for reform which will entrench their country's prosperity. India's friends around the world must hope they grasp it with conviction.