In May, when India's left-leaning United Progressive Alliance shocked the nation by defeating the long-entrenched Bharatiya Janata Party, millions of rural poor who had backed the UPA coalition rejoiced. Investors, however, panicked, fearing that costly social programs would supplant the more conservative BJP's market-based reforms. The Bombay Stock Exchange dropped by more than 20 percent in four days. UPA leader Sonia Gandhi, an Italian-born member of India's revered political family, moved quickly to quell investors' anxieties. Sidestepping a crisis, she abjured the prime minister's post and turned that job over to Manmohan Singh, a trusted former Finance minister. A champion of economic liberalization in the early 1990s, Singh in turn appointed market reformer Palaniappan Chidambaram as Finance minister. In a previous stint in that post, from 1996 to 1998, Chidambaram had overcome leftist protests and cut corporate, capital gains and customs taxes. As of late August, the Bombay market, buoyed by the appointments of Singh and Chidambaram, had risen almost 20 percent from its May 13 low.
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