India stays the course of economic reform

Since that dramatic day May 17, 2004 -- which traders dubbed "Black Monday" -- the market has rocketed 44 percent.

Analysts say the recovery shows that while Premier Manmohan Singh's government has taken no bold steps during its first year in office, it has kept economic reforms ticking, despite loud objections from the communists.

The rout of the market-friendly Hindu nationalist Bharatiya Janata Party (BJP) had prompted investor alarm that reforms would stall in one of the world's fastest growing economies.

"The government has done a great balancing job with the Left in the framework. It has kept reforms broadly on track, said Dhirendra Kumar, chief executive of Value Research, a leading Indian mutual fund tracker.

"But in the sense of rapid-fire, big reforms, it has not been able to do as much given the constraints."

The ruling 20-member centre-left coalition relies on the support of 61 communists members of parliament to stay in power.

After the government took power May 22, 2004, great enthusiasm greeted the "dream team" of Singh and Finance Minister P. Chidambaram.

Singh was known as India's liberator for opening up its inward-looking economy as finance minister in the early 1990s. Chidambaram propelled reforms further in the mid-1990s during an earlier avatar as finance minister.