Budget Pledges Infra Spending to Help Economy 'Fly'
Finance Minister Arun Jaitley pledged major investment in infrastructure in the annual budget, saying it is time for the economy to "fly."
The minister said his government had inherited an economy dominated by "doom and gloom" when it took power last year.
"The credibility of the Indian economy has been re-established. The world is predicting this is India's chance to fly," he said in parliament.
Prime Minister Narendra Modi swept to power last year on a pledge to revive the lethargic economy and provide jobs.
But he has been criticised for failing to push through the concrete reforms that experts say India needs if it is to attract much-needed foreign investment.
Mr Jaitley said the government will increase spending on the country's crumbling roads, railways and ports by Rs 70,000 crore in 2015/16 as it seeks to win back investment and boost growth.
The government will set up tax-free infrastructure bonds to finance its plans through a national fund that would receive a Rs 20,000 crore ($3.2 billion) injection of public money.
"It is quite obvious that incremental change is not going to get us anywhere," said the Finance Minister. "We have to think in terms of a quantum jump."
Analysts have said the government's challenge will be to balance its spending with the need for fiscal restraint.
Mr Jaitley said the government will achieve its goal of cutting the fiscal deficit to 4.1 per cent of gross domestic product (GDP) for 2014/2015 from 4.5 per cent the year before.
But he said it would delay by a year the goal of cutting the deficit to 3 per cent, forecasting a figure of 3.9 per cent in 2015/16.
The government has forecast that growth for 2014/15 will reach 7.4 per cent, making it the world's fastest growing major economy, topping 8 per cent in 2015/16 before moving into double figures in subsequent years.
India's economy has been seen as stagnating in recent years and the dramatic turnaround is due partly to a change in the way the data is calculated