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Singh: Poster boy of change

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Has Manmohan Singh got what it takes?
Sonia Gandhi
Manmohan Singh

(CNN) -- A career bureaucrat, professor, economist -- there are many things that distinguish Manmohan Singh but politics is not one of them.

When elections were announced a few months ago, few expected this low-profile man to become the country's prime minister.

But Singh -- who will be the first Sikh to be prime minister of India -- is no stranger to the portals of power.

He has spent more than three decades in different government posts and in 1991 he was plucked from relative obscurity to become finance minister in a Congress party-led government.

He held that position until 1996 and through those years, analysts say the former International Monetary Fund official nudged India's socialist economic policy down the road of reforms and deregulation, opening up the country for outside investment for the first time

He entered the post when the Indian economy was stuck in a quagmire -- its foreign exchange reserves were near rock bottom, and the country was close to defaulting on its international debt.

But Singh, who was also head of the Reserve Bank, managed to reverse nearly half a century of socialist planning and excessive bureaucracy.

During the 1991-1996 government he implemented sweeping reforms ending the "license Raj," the regulations that forced businesses to get government approval to make nearly any decision.

The economist also devalued the rupee, slashed subsidies for domestically produced goods and privatized some state-run companies.

By 2004, India's economy, which had crept along for decades, was racing at more than 8 percent.

"An understanding of the Indian economy is in his bones. He's been dealing with this for forty years," says economist Shankar Acharya.

As a young student from a simple Sikh family, Singh attended Cambridge and Oxford universities on scholarships, and spent the next few decades teaching and writing about economics.

"This is a government which will create an investor and enterprise friendly environment," Singh said after being named as the man to head New Delhi.

However, while per capita income has risen in recent years, hundreds of millions of Indians still live in poverty.

Singh has a following across party lines, with a clean reputation both as a politician and as an economic reformer.

He says the Congress-led coalition will push ahead with a reformist agenda that "is seen to be addressing the problems of poverty ... agricultural stagnation ... the jobless growth."

Singh may have a tough task -- pushing for change while balancing the demands of leftist and communist parties in the coalition -- but he has signaled he is ready for it.

Analysts point out that no matter how determined Singh is, he will have problems from the new government's left wing supporters.

"We will have to carry all the partners in the coalition. But they are all patriots, we may have differed in the past but I have no doubt about the inherent patriotism of all the elements," Singh said.

Leftist allies, who the new coalition government will have to rely on for support, have suggested they would support Singh and his economic agenda.

The main Communist Party India (Marxist) has already said its overriding concern is to stop Hindu nationalists from returning to power.

Even so, those who know Singh say some economic priorities will remain.

"I think that there will be, despite pressure, a genuine effort to do some fiscal consolidation because the fiscal deficit had been high," Acharya says.

Analysts say one key indicator of intent will be who Singh picks for his finance minister.

And the markets, that made a comeback as soon as Singh's name emerged, will be watching closely.

CNN's Suhasini Haidar and Ram Ramgopal contributed to this report

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