Narendra Modi has reduced India's cabinet to the smallest in 16 years in what he called an "unprecedented" overhaul of the top decision-making body.
Modi will be in charge of "all important policy issues" and any unallocated portfolios, the president's office said. Arun Jaitley, named both finance and defence minister, said his priorities included restoring economic growth, containing inflation and fiscal consolidation.
"The mandate which our government has received has an inbuilt hope in it," Jaitley said. "I'm sure that a political change itself sends a strong signal to the global community as well as domestic investors."
Modi has vowed to reduce the size of India's government to revive Asia's third-biggest economy. He faces the challenge of reducing the region's second-fastest inflation and pushing through a backlog of stalled projects valued at more than US$200 billion.
"A smaller cabinet is a good thing because it will streamline decision-making," said A. S. Narang, professor of political science at the New Delhi-based Indira Gandhi National Open University. "In the past there have been multiple authorities and clashes between different departments."
Modi's cabinet has 23 ministers, down from 34 under the government of former prime minister Manmohan Singh in 2009.
It is the smallest cabinet since the Bharatiya Janata Party's last prime minister, Atal Bihari Vajpayee, inducted 21 ministers in 1998.
Sushma Swaraj becomes foreign minister and Rajnath Singh will head the home ministry.
After he was sworn in, Modi said the nation of 1.2 billion people had delivered a mandate for economic development, stability and good governance.
"Together we will script a glorious future for India," Modi said in a statement posted on his website. "Let us dream of a strong, developed and inclusive India that actively engages with the global community to strengthen the cause of world peace and development."