NEW DELHI, May 19: Soft-spoken Sikh Manmohan Singh, who was named on Wednesday as India's next prime minister, is hailed at home and abroad as the liberator of his nation's once inward-looking economy.

Political leaders and analysts agreed Mr Singh would be the most acceptable substitute to lead a Congress-led alliance that includes communists and regional groups. Born in Amritsar in Sept 1932, Mr Singh will be the first Sikh prime minister of India. He hails from a poor farming background and has said the first time he ever wore a tie was for his first job interview.

Mr Singh studied at Oxford and once served as Indian central bank governor, and is seen as the man who wrenched the country out of the worst financial crisis in its modern history.

In 1991 India's hard currency reserves had sunk so low they covered less than a month of imports and India was on the brink of defaulting on its foreign loans. Amid the crisis, then Congress prime minister P.V. Narasimha Rao appointed Mr Singh finance minister and asked him to fix the problems.

Mr Singh unleashed sweeping change, beginning the process of abolishing what was known as the "license raj",a system of economic management ruled by government monopolies, quotas and permits that dictated what firms could make.

To some, the shy, unassuming character who lives in a modest dwelling in the Indian capital seemed an unlikely choice to be a financial fireman even though he was a respected economist and former senior civil servant.

Later Mr Singh, who said he decided to study economics to find a way to eradicate poverty, said his time in the civil service had persuaded him big changes were necessary.

"If you have a rigidly controlled economy, cut off from the rest of the world by infinite protection, nobody has any incentive to increase productivity and to bring new ideas," he recalled in an 2001 interview.

With Mr Rao's support, he brought in changes that broke sharply with India's state-directed economic past. He devalued the rupee to spur exports, loosened foreign investment rules to lure capital from abroad, opened oil refining, telecommunications and the stock exchanges, slashed tax rates and sought to cut through red tape ensnaring companies.

His efforts during Congress's five-year stint in power bore fruit. He rebuilt India's foreign reserves: they now stand at a record 118 billion dollars after being less than a billion.

Foreign investors rushed in, seeing India as one of the last virgin capitalist frontiers. Inflation halved to 8.5 percent from 17 percent; it now stands at just over four percent.

With India's economy on a roll Mr Singh will have another chance to propel India forward. But some economists wonder if the task would be tougher for him this time round because Congress would be in power in an alliance that includes leftists and communists, whereas last time he had a free hand.

"He's the best architect for modern India as far the reform process is concerned. People have great regard for his ability to deliver. But the question is how much freedom he'll have with the leftists," said Motilal Oswal, chairman of Motilal Oswal Securities.

Mr Singh said last week Congress's aim was to promote faster growth, ensure a social infrastructure and to alleviate poverty. "I don't think there will be any problem with the Left." -AFP