NEW DELHI: India’s Congress party unanimously elected Manmohan Singh as leader of the Congress Parliamentary party on Tuesday, setting the stage for his appointment as prime minister, a Reuters reporter said.

Congress party president Sonia Gandhi, proposed Singh’s name and it was immediately approved by thumping of desks by newly-elected party lawmakers in the Indian parliament.

Gandhi had said Manmohan Singh will be the next prime minister after the Congress party won a decisive mandate in elections.

Singh, who will lead a coalition government, vowed to reverse a slowdown in growth that has hurt key sectors of the economy and led to loss of millions of jobs.

‘Economic slowdown has hurt us, we will have to reverse it,’ Singh said in his acceptance speech, greeted by loud cheers.

Singh’s coalition is just 10 seats short of a parliamentary majority and is expected to be invited to form the next government soon.

The coalition was further strengthened after Mayawati, the powerful leader of the Bahujan Samaj Party (BSP) representing the lower castes, pledged her support for the new coalition.

‘Our 21 MPs will extend outside support to the UPA government,’ Mayawati, who is also chief minister of most populous Uttar Pradesh state, said in a news conference in the northern city of Lucknow.

Singh was expected to appoint key reformers to the new cabinet as financial markets extended gains on hopes his coalition’s sweeping election win would herald a strong coalition government.

Indian shares were up more than two per cent midday on Tuesday in a seesaw trade, following Monday’s 17.3 per cent surge.

Among the challenges facing the new coalition is expanding its development projects, including a rural jobs guarantee scheme that now leaves out millions in small towns and cities at a time when the combined budget deficit is touching 10 per cent of GDP.