Indian Prime Minister Manmohan Singh led a rapturous nation in showering praise on their cricket team after clinching the inaugural Twenty20 World Cup by beating traditional rivals Pakistan on Monday.

India snatched a tense five-run win off the last over in Johannesburg as the cricket-mad sub-continent erupted in joy on one side of the border and slumped in dismay on the other.

"They played well and made us all proud. Keep it going team India," Singh, who watched the game on television, said in a statement, while also complimenting Pakistan's fine display.

The Indian board announced a cash bonus of $US2 million ($A2.31 million) to the squad and 10 million rupees ($A290,000) to batsman Yuvraj Singh for hitting six sixes in one over against England and rallying the team.

Indian cities erupted with fans bursting fire-crackers as the last Pakistan wicket fell after millions had hurried home to watch the final on television ahead of its 5.30pm start.

Thousands of fans spilled onto the streets in the eastern city of Ranchi, hometown of captain Mahendra Singh Dhoni, and the western city of Baroda from where left-arm paceman Irfan Pathan comes.

Pathan was named man-of-the-match after claiming three for 16 to peg back Pakistan as they chased a modest target of 158.

It was double delight for his family after elder brother Yusuf was also included in the playing XI at the last minute in place of injured opener Virender Sehwag.

Police burst teargas shells in the disputed Himalayan state of Jammu and Kashmir following stone-pelting between Hindus and Muslims in Poonch and Rajouri district towns bordering Pakistan.

Police said the situation had been brought under control.

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