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The deregulation of Diesel prices will be seen as the Modi government's first big-bang reform, according to a Deutsche Bank India Equity Strategy report dated 19th October.
"Diesel deregulation will be perceived by the market as the Modi administrations' first 'big bang' reform assuaging investor concerns that the government was moving slowly on translating its political goodwill into strong economic intent," said the report authored by research analysts Abhay Laijawala and Abhishek Saraf.
The duo added that expectations are likely to run higher now from the next session of Parliament.
"We also see the market now building in the expectation of more reform, particularly the long awaited Insurance amendment bill in the winter session of parliament," they added.
The government announced over the weekend that Diesel prices will be deregulated, that natural gas prices would be raised and that direct benefit transfer of cooking gas would begin from the start of the next calendar year.
The move on diesel prices would send a signal to the central bank that the government means to control the fiscal situation and also helps boost chances of an upward revision in India's sovereign rating, the report added.
