Rahul Gandhi said on Saturday he would "transform" the country after he was promoted to second-in-command of the Congress party.
Members of the Congress Working Committee earlier approved a motion making Rahul second in the party's hierarchy after party president Sonia Gandhi.
"I have great experience," Rahul Gandhi said in Jaipur, at a party meeting held to prepare for general elections due in 2014.
"Together we will transform the country," he said in his speech accepting the post of Congress vice president, according to the Press Trust of India news agency.
"It is a great party," he said.
The move could propel the long-anticipated accession to power of Rahul Gandhi, who has long been the party's unofficial candidate to succeed Manmohan Singh, 80, as prime minister of the Congress-led government.
Congress senior leader Janardan Dwivedi declared that Rahul Gandhi was now "next only to Sonia Gandhi in the party" and said "this decision will greatly strengthen the party and the hands of the party president".
Dwivedi added that a decision on who will lead the party in the elections would be made later. Sonia Gandhi led the party to back-to-back victories in the 2004 and 2009 polls.
Saturday's decision formally cements the position of Rahul Gandhi, who had already been seen as the de facto number two on the Congress ladder and has been in charge of regalvanising the party's youth wing.
Analysts said the move meant Rahul Gandhi, often accused of staying aloof from daily political battles, now must get his hands dirty trying to revive the party, which has been buffeted by slow economic growth and corruption scandals.
The decision to elevate the boyish-looking politician comes despite the party's dismal results in state elections that have raised serious doubts about his political abilities.
Congress was routed in polls in the states of Uttar Pradesh, Gujarat, Punjab and Goa last year.
Rahul Gandhi's appetite for the country's turbulent political scene has often been questioned by critics due to his refusal to accept repeated requests to take on ministerial responsibilities.
But with Rahul Gandhi's mother Sonia holding the reins as Congress president, any opposition within the party to the Gandhis has been swiftly suffocated, say observers.
Oil minister Veerappa Moily hailed Rahul Gandhi as the country's leader for the "present and for the future" at the meeting.
Rahul Gandhi "is our candidate for the post of prime minister after the 2014 elections", Sanjay Nirupam, a Congress leader from western Maharashtra state said at the meeting where pictures of the young politician were plastered.
Party workers celebrated the announcement in the streets with fireworks but the main opposition Bharatiya Janata Party denounced Gandhi's promotion as a "sham".
Some observers argue the party's drubbing in states polls should not be taken as a sign of Rahul Gandhi's chances in the general election.
"At the national level, people vote for parties. Things are different because in the local polls people prefer their local leaders," Rajendra Dayal, a political scientist at Delhi University, said recently.