India's first non-Hindu prime minister has been sworn in to lead the Congress party's first coalition government after eight years on the sidelines.
Mr Singh (left) has promised to target poverty
Manmohan Singh, a Sikh, took the oath of office at a ceremony in the capital led by President Kalam, a Muslim.
Dr Singh is a respected economist and administrator, but correspondents say he is short on political experience.
He became premier after Congress leader Sonia Gandhi's shock refusal to accept the post, despite winning the election.
"This is a mandate for change, for strengthening the secular foundation of our republic," Dr Singh told reporters after being sworn in.
He pledged to carry forward the process of social and economic change "which benefits the poorest sections of our community".
Portfolios, he said, would be announced on Sunday.
Mrs Gandhi, who attended the ceremony, told reporters: "The government will be stable. We'll be working on that."
The BBC's Frances Harrison in Delhi says it is widely assumed the Congress party will retain key portfolios like finance, interior, defence and foreign affairs.
Saturday's ceremony at the presidential palace in Delhi capped a week of drama following the Congress-led alliance's surprise election victory.
Dr Singh, who as finance minister over a decade ago is credited with launching the country's reform programme, has spent the last few days trying to decide on the shape of the new government.
There has been intense haggling over the top posts between the Congress party and more than a dozen allied parties.
Among the first cabinet ministers to be sworn in were senior Congress party figures Pranab Mukherjee, Arjun Singh and P Chidambaram.
Other cabinet ministers include Nationalist Congress Party head Sharad Pawar and Laloo Prasad Yadav, the maverick leader of the Rashtriya Janata Dal party in northern Bihar state.
Sikhs celebrated their new prime minister
Outgoing prime minister Atal Behari Vajpayee, whose Hindu nationalist BJP was swept from power by Congress, shook Dr Singh's hand before the handover of power.
Pakistan's President, Pervez Musharraf, was swift to offer India's new leader his congratulations.
"I wish you great success," he said in a message which made clear his government was
committed to resolving all disputes, including Kashmir.
Dr Singh's family in Amritsar in the northern Indian state of Punjab toasted his success. They danced and handed out sweets as the swearing-in ceremony took place in the capital.
Dr Singh has said the main task of his government is to reduce poverty, and continue economic reform.
He also wants to push the peace process with Pakistan.
Late on Friday, Congress unveiled a draft working agenda with its allies in the United Progressive
The so-called Common Minimum Programme, which has still to be fine-tuned, puts help for poor farmers at the top of the agenda.
It promises job creation and more economic reforms, but rejects privatising state-owned oil and power companies.
Communist parties decided not to join the Congress-led government.
But their support for Congress has led to unease in the markets - with huge swings over the last week as investors waited for news of the make-up of the government and its economic policies.
International reaction to the change of government has been positive.