Modi began his meeting with 77 secretaries at his residence last evening by asking them to list their expectations from the new government.
What followed was over two dozen officials giving suggestions and listing action points for the Modi administration, sources privy to the deliberations said.
Modi, 63, listened patiently for over one-and-half hours and occasionally noted down points, one of them said.
Some secretaries raised concerns about anti-corruption law which they said could be misused even in bonafide decisions.
It was stated that under Sec 13 (1) (d) of the Prevention of Corruption Act all decisions can be questioned as there would always be a "beneficiary".
Once officials had finished speaking, the Prime Minister spoke of his government's governance agenda for close to 45 minutes.
Modi, sources said, asked officials to approach him directly with their inputs and ideas in what is seen as an attempt to create direct channels of communication.
"Had a very fruitful meeting with Secretaries. Heard their views and asked (them) to simplify administrative processes & make Govt. people friendly," Modi tweeted after the meeting.
Officials described the meeting as extremely productive and useful.
"1st time in my career free, frank & fearless interaction with d PM of d country. Highly motivating! Gr8 flow of ideas!," Amitabh Kant, Secretary, Department of Industrial Policy & Promotion (DIPP), tweeted.
The meeting will follow the secretaries being asked to make presentations on issues facing their sectors as well as action points.
Sources said 16 groups have been formed by clubbing related ministries. In Group A, all departments under finance ministry were clubbed together while while secretaries of the energy-related departments power, coal, oil, mines and atomic energy were put in group B.
Agriculture and related departments were clubbed under one head while the infrastructure group comprised railways, telecom, roads, civil aviation, shipping and posts. The classification of groups ran from A to P.
The secretaries had been asked to prepare a 10-minute presentation containing no more than 10-slides for the Prime Minister listing success and failures of the past regime as well as points of action for the next five years, they said.
An official statement issued after yesterday's meeting said, "Modi empathised with the sentiment expressed by the Secretaries, and their anguish in not being able to realise their true potential because of circumstances. However, he expressed full faith in their commitment and competence to build a better future for the country."
Modi "encouraged the officers to take decisions and assured them that he would stand by them," it said.