According to Crisil, the decisive electoral mandate has created the best environment in a long time to bite the bullet on government finances.
Registering their best-ever showing, BJP has won 282 seats in the Lok Sabha polls, becoming the first party after 1984 election to have majority in the Lower House. Its leader Narendra Modi would be taking over as the Prime Minister soon.
The rating agency has listed out five important things -- taming inflation, fiscal consolidation, improving asset quality at banks and their recapitalisation, encouraging debt markets and boosting manufacturing and employment -- which the new government has to do on a priority basis.
"Such an agenda will improve the country's competitive efficiencies and pave the way for its re-entry into the orbit of 6.5-7 percent GDP growth in the years to come," Crisil's chief economist Dharmakirti Joshi said.
The report said for taming inflation the new government will require to have a better coordination between monetary and fiscal policies and to take steps such as dismantling the APMC Act for reduction of food inflation.
There is also a need to bring in a sea-change in storage and distribution capacities for fruits and vegetables, particularly important in the current year in view of the rising risks of monsoon failure spurred by the El Nino, it added.
For fiscal consolidation, Crisil believes this will entail reduction in subsidies and curbing expenditure and ensuring that the money spent on social welfare schemes creates durable assets than remain just cash handouts.
It is also critical to simultaneously introduce growth and revenue-enhancing measures such as clearing the long-delayed GST and improving tax compliance, the report said.
The rating agency said the country's corporate debt market needs to be fostered for growth to be sustainably funded.