The Vatican's head of the Department for Cause of Saints, Cardinal Angelo Amato, declared Vattali, popularly known as Sister Rani, 'Blessed', a stage below sainthood.
Cardinal Amato read out Apostolic (Pope's) letter declaring her 'Blessed' in Latin at a Holy Mass at Saint Paul Higher Secondary School's ground in Indore in the presence of large numbers of clerics and Christians.
The nun's killer also attended the ceremony.
Cardinal George Alencherry read out the letter of Pope Francis in English, while Cardinal Telesphore Toppo did so in Hindi at the mass presided over by Cardinal Amato.
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"The Blessed title is considered a prelude to beatification of sainthood as was the case with Mother Teresa," Public Relations Officer of Madhya Pradesh Catholic Church, Father Maria Stephen told PTI.
But for canonisation of sainthood, a miracle is required, he said.
All the four cardinals of India - Mar Baselios Cleemis (president of the Catholic Bishops Conference of India), Mar George Alencherry (of Syro Malabar Church), Oswald Gracias (Archdiocese of Bombay) and Telephore Toppo (Archdiocese of Ranchi) graced the ceremony.
Her attacker Samunder Singh was hired to kill the nun as some landlords in MP's Indore region were upset with her work on uplift of landless people, he said.
Singh was sentenced to life in prison by a court. His sentence was later commuted due to his good conduct in prison, Stephen said.
He was also pardoned by Sister Rani's family.
At the ceremont, Singh recalled his brutal act.
Singh, released from jail in 2006, said, "My life has changed. Now everyone in this world is part of my family. Sister Selmi and her relatives too are my family and their affection and love has totally changed my life."
Then Indore Bishop George Anathil initiated the cause for Sister Rani's canonisation process of the Blessed in 2001 by setting up two panels - historical and theological - to examine her life, Stephen said.
Sister Rani was found to have led a heroic life of Christian virtue. Thereafter, her name was sent to Vatican Congregation for the Causes of Saints, which reviewed the gathered information and recommended that the Roman pontiff declare the candidate "venerable", he said.
Two months back, the Vatican cleared the canonisation process to promulgate the 'Decree of the Blessed' on Sister Rani. It decided to send a representative of Pope to Indore to officially announce her the 'Blessed' on November 4.
She was a champion for the poor and the marginalised, it said.
The nun began organising people who were exploited by moneylenders. Slowly, she was able to make a difference in their lives. Her self-help groups helped the poor and the downtrodden to break away from the clutches of the established money lending community, the release said.
Her bold initiatives won hearts of poor tribals, but they did not go down well with those haaving vested interests who ultimately decided to eliminate her, the release added.
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