As legacy beckons, India PM eyes final reforms nudge

NEW DELHI (Reuters) - Until a year ago, he was seen as a weak leader betrayed by his allies and manipulated by enemies, in what many Indians saw as the decline and steady fall of an erudite, honest prime minister.

Yet, when it came to the controversial nuclear deal with the United States, Manmohan Singh, 75, put his foot down to support a pact that may be one of his few lasting legacies.

That meant replacing the government's communist allies who opposed the deal with crucial parliamentary support from the regional Samajwadi Party.

Emboldened at the departure of his uneasy partners, who for the better part of his four-year tenure opposed his free market reforms, Singh now has an opportunity to get on with his economic agenda and seal his legacy.

But with national elections only months away, time is running out on him.

"The prime minister took a firm stand on the nuclear deal, but whether he can show the same resolve in economic policies we have to see," said political analyst Mahesh Rangarajan.

D.H. Pai Panandikar, the head of a private economic think-tank and Singh's classmate from Cambridge, says while major reforms were unlikely, some steps for privatization in state-run firms could be initiated.

"The last six months is not the time for major economic steps. But knowing how committed the prime minister is, we can expect something," Panandikar said.

Besides privatization, there could be some easing of foreign direct investment rules

"With the government finally out of the left bear hug, there is a window of opportunity for it to kickstart its stalled reforms agenda," the Hindustan Times said in an editorial on Thursday. "Tigerish trajectories of 8.6 per cent (growth) cannot be sustained without them."

'A SOFT BOSS'

Not a career politician, Singh was catapulted to the post of prime minister after party boss Sonia Gandhi turned it down, leaving him vulnerable to charges that he had undermined his office to a complex leadership structure with Sonia at the top.

Critics say his career, including as U.N. civil servant and government bureaucrat, underline a life where career jobs have carried more weight than pursuing strong political ideals.

People who have known and worked with Singh for more than a decade describe him as an anti-politician, a quiet, hardworking man and a deep thinker who shuns the perks and corruption that many Indian politicians thrive on.

He spurned a Mercedes ordered for his predecessor, Atal Behari Vajpayee, preferring to fold his thin frame into an Indian-made Ambassador, the workhorse based on the 1950s Morris Oxford.

"He's very honest, sincere and hardworking, the kind you will hardly find now," Panandikar said.

Singh likes a spartan lifestyle. His attire consists of crisp homespun white long tunic-pajamas and trademark skyblue turban while lunch and dinner are two rotis -- a flat Indian bread -- and lentils.

Since coming to the job in May 2004, Singh has been putting in 14-hour days, devouring files and coming to grips with the complexities of running a hugely diverse country of one billion people.

"But he's a soft boss, he cannot dominate and say something loudly like 'get this done'. He's not tough-talking. It's a handicap," said Panandikar.

In the rough and tumble of Indian politics that handicap meant an inability to stand up to communist opposition to reforms and, analysts say, the new ally, the Samajwadi Party, headed by a leader known to often switch sides, could call the shots.

Yet for all of Singh's hard work, analysts say the government, elected on a ticket of spreading benefits of rapid growth to the millions of rural and urban poor, still appears to be finding its way.

As the economy shows signs of slowing down, high prices make headlines, there is little headway in India-Pakistan peace talks and industrial unrest is building.

"This is the first time he has showed some leadership but it is the wrong time," Bhaskara Rao of the Centre for Media Studies said.

"Given inflation and other fiscal problems many people don't think the nuclear deal is the only issue that needed his personal attention."

Analysts say in the Samajwadi Party, Singh has a new partner which will be far more pragmatic about its dealings with the government which will, going into elections, try to build on economic growth averaging 8.8 percent in the past four years.

"His legacy is secured," Panandikar said, "and he has the impetus to achieve a little more."

(Editing by Alistair Scrutton)