According to a report by Credit Suisse, investor sentiment was rife that professionals and technocrats would be included in the council of ministers, while there were also expectations about new allies and ministries being merged.
"We believe this may have been only the first of events where the pace of change disappoints the market's immediate expectations," Credit Suisse said, while adding that "positive underlying trends" were still there in the markets.
over the next six months.
"The first major event was the appointment of the Council of Ministers on 26 May: an underwhelming development for the market, especially given high expectations of professionals being inducted, new allies, or of ministries being merged," it said.
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Some of the "underwhelming" aspects identified by Credit Suisse include no professionals having been brought in for key ministries targeted for reform, as against such speculations for Railways and Coal.
There were no new allies (expectation was to possibly add some allies to bolster position in the Upper House or the Rajya Sabha) and there were no merger of ministries.
While this may have been only the first of events where the pace of change disappointed the market's expectations, the underlying trends were nothing but constructive, the report said.
The absence of a dual power centre in the BJP outside the government means fewer constraints. Further, most ministers, especially those in charge of economically relevant ministries, having a clean record reduces disruption risk.
Moreover, most key ministries expected to be the focus of reforms are with people known to be close to the PM, the report said.
The Union Budget for FY'15 would be the first major policy document from the government, and should be presented around the last week of June.