"A leaner leadership will help to streamline operations and speed up implementation on the ground to get the economy back on its feet," Singaporean brokerage DBS said in a note today, adding that the appointment of Arun Jaitley as finance minister will instill confidence in investors and industry.
Modi took charge as Prime Minister last evening along with a 45-member council of ministers, including 23 Cabinet members. The Manmohan Singh regime had 78 ministers.
In addition, to streamline operations, avoid inter-ministerial disputes or duplication of work and promote efficiency, ministries will be merged with a single cabinet minister heading a cluster of ministries, it said.
British brokerage StanChart said providing final clearances for stalled projects should top the growth agenda of the government, coupled with measures to support infrastructure, urbanisation and manufacturing to help revive the investment cycle.
It expects the government to take urgent measures to control food hoarding and implement distribution reforms to contain inflationary pressure, apart from pursuing fiscal consolidation and announcing the rollout of the Goods and Services Tax by the next financial year.
Another British brokerage Barclays said the new Cabinet boosts expectations of strong, decisive and swift action by the new government.
It noted that Jaitley is likely to restore confidence in the economy, apart from improving supply-side issues to fight inflation.
The merging of key ministries will help in better coordination among these critical sectors, it added.