The market is agog with expectations of revival of the PSU divestment policy with the second coming of the Congress-led United Progressive Alliance government at the centre, even as finance minister Pranab Mukherjee got down to the task of budget preparation.

Mukherjee, who formally assumed charge of his finance portfolio today, convened a meeting of top officials on the preparation of the national budget.

''Immediately after assuming charge, Mukherjee had a series of meetings with all senior officers of the ministry and reviewed the status of various programmes and issues related to all departments of the ministry," an official statement said today, adding, "Issues relating to forthcoming budget were also discussed at the meetings."

Earlier, during his brief interaction with the media on Saturday, Mukherjee had said that he hoped to present the budget soon and promised immediate steps to pull the Indian economy out of its present woes.

"All economic issues will be addressed. My priority is to put the economy back on track. Various efforts will be made to insulate the Indian economy from the adverse impact of the financial meltdown," said Mukherjee.
 
Mukherjee, however, declined to comment on whether he intended to present a vote-on-account first. "I hope to present the budget in due course," he said.

Former finance minister P Chidambaram had earlier, after the first meeting of the union cabinet, hinted at the possibility of a vote on account.

We hope we will be able to pass the budget by 31 July," he had said, adding, if that was not done, then the government will have to seek another vote-on-account for a short period.

Meanwhile, investor sentiment and business confidence is at a new high on expectations that the government would formulate a strategy of boosting infrastructure, agriculture and other sectors to pull them out of the impact of the global economic meltdown.

There is an unprecedented sense of jubilation among investors after the return to power of the Manmohan Singh government, Ramesh Damani, a member of the Bombay Stock Exchange, told CNBC TV 18 in an interview.

Damani said he expects a big thrust on reforms from the new government, which will likely be led by the banking space. He believes that the market will remain buoyant till the budget, he said.

Furthermore, he added, there is a possibility that government will go ahead with divestment soon.

While there is reason for optimism, he said, only time will tell if India is decoupled from the global economy.

"I am still circumspect of the global situation," he said, adding, that he expects a gush of foreign institutional investor (FII) flows. "We may see up to $5-6 billion in a few months," he said.

Foreign direct investment (FDI) in aviation, according to Damani, could be expected in the first three months itself.

He also feels that the global economy is contracting and will not turn around immediately.