"We are looking at some independents and old allies. With our numbers there is no need for any major denomination to join us. But all secular groups are welcome."

'Pick and choose'

Al Jazeera's Barnaby Phillips in New Delhi said: "They [the Congress] are almost in a position to pick and choose.

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"The fear they might have had before the election was of a rather unwieldy coalition, with perhaps some troublesome regional partners or troublesome partners from the left like the Communists, the kinds of people who have made it difficult for Congress to govern coherently in the past.

"I think they will just pick a few independent candidates and a few more malleable candidates," he said.

The Congress leadership was also expected to discuss a cabinet role for Rahul Gandhi, heir apparent of the Gandhi-Nehru dynasty.

He is seen as the architect of the Congress party's resurgence, particularly in the northern states, and has been suggested as a potential future prime minister.

Gandhi was widely credited with energising the party and bringing out the youth vote.

Numerous challenges

Despite the mandate handed to the Congress party, Singh's new government still faces numerous challenges both at home and abroad.

India poll results

How the 543 seats in parliament are divided:

 Congress-led UPA: 262 seats
 BJP-led NDA: 157 seats
 Third Front: 67 seats 
 Others: 57 seats 

After five successive years of near double-digit growth that lent the country the international clout it has long sought, the Indian economy has been hit by the global downturn.

But a Congress-led coalition free of pressures from its former communist partners has boosted the prospect of reforms to aid growth in Asia's third largest economy.

Indian markets were expected to surge on Monday as a stable government looks imminent now.

The rupee is likely to strengthen past 49 to the dollar and bond yields are set to fall as the outcome should encourage foreign investors, analysts said.

"The markets could go up anywhere between 1,100-1,300 points over the next two to three days because you cannot have asked for a better combination," Arun Kejriwal, a market strategist, said .

Singh's coalition will also be free to pursue ties with the United States, which the communists had opposed and eventually walked out of the alliance over a civilian nuclear energy deal.