India?s prime minister designate, Manmohan Singh, held crisis talks yesterday with powerful coalition partners after a row over cabinet posts erupted a day before his inauguration.

The mild-mannered Singh joined Congress party leader Sonia Gandhi to mark the 13th anniversary of the murder of her husband Rajiv but the two quickly returned to talks with a clutch of regional partners as markets fell on reports of the bickering.

Party officials said Gandhi and Singh had planned to visit the town of Sriperumbudur in southern India where Rajiv Gandhi was assassinated by a suicide bomber in 1991 but were now unlikely to do so. «No, she is not going to Sriperumbudur. All functions are in New Delhi. A prayer meeting took place in the morning,» party spokesman Anand Sharma said.

Singh, who was designated prime minister after Italian-born Gandhi said she did not want the job despite leading Congress to a win in last week?s election, is due to be sworn in today.

Bombay?s stock market fell as much as 2.6 per cent in early trade after newspaper reports that regional strongman Laloo Prasad Yadav had walked out of cabinet formation talks in a huff. He had wanted the powerful home or interior ministry.

Yadav?s regional party holds a key 21 seats in parliament and has been a long-time partner of Congress, which won 145 seats in the 545-member parliament. Other allies, including left-wing groups that have promised support without formally joining the coalition, will give Congress a majority. But Yadav said he would return to the talks with Congress on Friday and it appeared unlikely that his demand was more than brinkmanship.

Still, the Bombay stock market was skittish. It was battered by the election and has see-sawed in the chaos that followed as Congress built its coalition and searched for a premier.

It has also fretted over how the party will manage differences with left-wing groups and whether the country?s crucial economic reforms will be derailed. «There are still many uncertainties regarding the common minimum programme and who will get key posts, so investors are waiting till there is clear direction,» said Devesh Kumar, head of equities at ICICI Securities.

Markets have also focused on who will be the new Finance Minister. Singh, himself a former Finance Minister who drew up India?s reform programme in the early 1990s, had been favourite until Gandhi?s withdrawal catapulted him to the top job.

Local newspapers said however that he could retain additional charge of the Finance Ministry for the time being, at least until after presenting the delayed annual budget by July.

Other contenders for the finance portfolio are Pranab Mukherjee and P. Chidambaram, who have both had the job in the past and are respected in the market. Within Congress itself, there were many contenders for government posts. «The Congress will naturally keep the major portfolios, as the leader of the coalition,» said party general secretary Kamal Nath. «But we will keep the interests of our allies fully protected,» he said.

Congress?s success in the election was ascribed mainly to the charisma of Sonia Gandhi, the torch-bearer of the Nehru-Gandhi political dynasty which has ruled India for 35 of the 57 years since independence. But she declined to be prime minister, although she is president of the party and its leader in parliament, and named Singh as her choice.

Yesterday, Gandhi, dressed in a sober light-grey sari and a white blouse, prayed at the New Delhi memorial site to Rajiv Gandhi. Her son Rahul, newly elected to parliament, Singh and hundreds of other party members were there too. Her daughter Priyanka was likely to be in Sriperumbudur, family friends said.

Portrait of an economist as an accidental politician

He has neither the charisma nor the political legacy of the famous Nehru-Gandhi dynasty. Yet in a dramatic twist of events in India, former Finance Minister Manmohan Singh, a soft-spoken economist-turned-politician, was asked by President Abdul Kalam to form a new Congress-led government.

Born into a poor Sikh family in Punjab, Manmohan Singh came out first in the B.A.(Hons) and M.A. Economics, Panjab University, Chandigarh and won scholarships to Cambridge and Oxford earning a Doctorate in Economics with a thesis on the role of exports and free trade in India?s economy. He has authored a book on the subject: «India?s export trends and prospects for self-sustained growth», published by Clarendon Press, Oxford. After more than a decade of teaching at Panjab University, Delhi School of Economics, University of Delhi, and Jawaharlal Nehru University, New Delhi, Singh served a stint at the UN, followed by several top government jobs, including a term as Director of the Reserve Bank of India and has also been the Deputy Chairman of the Indian Planning Commission. Singh is also the recipient of honorary doctorate degrees from more than a dozen Indian Universities and Alberta University, Edmonton, Canada. He is also a Fellow of St John?s College, Cambridge and a Fellow of Nuffield College, Oxford.

In 1991, then prime minister P.V. Narasimha Rao offered him the Finance Ministry and the chance to rescue a sickly economy threatened by an acute balance of payments crisis. Swapping a bureaucrat?s trouser-and-shirt outfit for a politician?s home-spun white kurta-pyjama, Singh as finance minister moved decisively in the initial years, opening up the economy to foreign investment and slashing trade barriers.

Manmohan Singh is seen as the father of Indian reforms, the man who steered the economy away from socialism to embrace free market capitalism. He sought to calm markets after Monday?s slump, saying the new government would ensure Asia?s third-largest economy grew at more than seven per cent. The father of India?s reform programme rising to the prime ministership is be very positive from the standpoint of the market but his abilities as a political manager are yet untested.