Delhi Chief Minister Arvind Kejriwal and newly elected Aam Aadmi Party (AAP) MLAs took oath in the Assembly on the first day.
The AAP government will seek a vote of confidence on the floor of the assembly during the session which will end on Jan 7.
According to reports, the Speaker and the Deputy Speaker will be elected on Jan 3.
In another major announcement, Kejriwal on Tuesday said households in Delhi that used electricity up to 400 units per month will need to pay half of the bill they used to pay earlier.
"Consumers in Delhi who use up 200 units or 201 to 400 units of electricity, their rates will be halved," Kejriwal said after attending the Cabinet meeting on Tuesday.
"Subsidy rates will help 28 lakh consumers in Delhi," he said.
Kejriwal earlier in the day met Comptroller and Auditor General (CAG) Shashi Kant Sharma and discussed the issue of conducting the audit of three private power distribution companies, reports said.
The companies supply power in the national capital.
Kejriwal kept his promise with the citizens by announcing supply of nearly 700 litres of free water a day to the people of the national capital.
On Monday the announcement was made despite Kejriwal himself remaining sick at home.
The free water decision, to be implemented from Jan 1, will be reviewed after three months. The free water, 20 kilo litre to be supplied per month to each household, will be available for those with water meters.
AAP supremo Kejriwal took oath as the seventh chief minister of Delhi on Saturday and had then transferred Chief of Delhi Jal Board.
He also shunted out eight other IAS officers.
The reason behind these transfers was speculated as that of massive corruption in the Delhi Jal Board.
Kejriwal himself retained Power, Home, Finance, Planning and Vigilance ministries.
--IBNS (Posted on 01-01-2014)