India coalition partner unhappy

The Congress Party dominates the new coalition cabinet

India's Congress party-led government began its first full day of business, with a key coalition ally angry at its share of ministries.

The southern regional DMK party says its seven ministers will not take office because it was not given the positions it was promised.

Congress kept key posts for itself when Prime Minister Manmohan Singh unveiled his cabinet late on Sunday night.

On Monday, Indian markets responded well to his choice of finance minister.

The portfolios announced went contrary to the assurances DMK leader M Karunanidhi First day in quotes

The appointment of Palaniappan Chidambaram, who served in the same post from 1996 to 1998, saw the Bombay Sensex index rise 3.2% to 5,120.67.

Markets have fluctuated wildly since Congress won the general election amid fears over the future of economic reforms.

Challenges

Mr Singh and his 68-member council of ministers were sworn in on Saturday.

KEY CABINET MINISTERS Interior: Shivraj Patil Defence: Pranab Mukherjee Foreign: Natwar Singh Finance: P Chidambaram Railways: Laloo Prasad Yadav Agriculture: Sharad Pawar Education: Arjun Singh Commerce: Kamal Nath IT, telecoms: Dayanidhi Maran Pen portraits: Key ministers

Correspondents say that last-minute bargaining and demands by the allies and from Congress members delayed the announcement about the cabinet posts.

The Congress is leading an alliance of nearly 20 centre-left parties in India's new government.

But the DMK leader, M Karunanidhi, has said his ministers will not take office until "the mistakes in allotting portfolios are rectified".

Mr Karunanidhi has not given details of the ministries he is not happy with.

Analysts say that the DMK party's move is an indication of the challenges for Mr Singh in holding the coalition together.

Congress Party veterans have been awarded key cabinet posts in the new government.

The new finance minister is Palaniappan Chidambaram, who held the same post in the 1990s and was widely praised for lowering tariffs and taxes.

Natwar Singh, a close aide to Congress leader Sonia Gandhi, was made foreign minister, while Congress veteran Pranab Mukherjee became defence minister.

Only one woman - Meira Kumar - is a full cabinet minister.

Friendly relations

Analysts said the appointment of Mr Chidambaram and other respected business figures to the cabinet seemed designed to soothe investors.

Profile: P Chidambaram

On Sunday, India asked Pakistan to delay nuclear talks as the new cabinet line-up was finalised. The talks on confidence-building measures were originally set for this week.

They are now expected to take place next month. Under a timetable agreed by the previous government, the two countries' foreign ministers are to meet in June for talks on Kashmir and security issues.

Mr Singh has said he will continue the peace process with Pakistan begun last year by his predecessor Atal Behari Vajpayee.

Pakistan's President Pervez Musharraf called Mr Singh on Sunday to congratulate him on his election as prime minister, the AFP news agency reports.

It was the first direct contact between the leaders since India's new government was sworn in.

The two leaders expressed their desire to resolve "all outstanding issues including the Kashmir dispute through dialogue", AFP reported, quoting Pakistani state television.

The arch-rivals have fought three wars, two of them over Kashmir.