India has unveiled a budget to help the poor with hikes in government spending and cuts in taxes as Prime Minister Narendra Modi seeks to win back the sympathy of voters hit hard by his recent crackdown on "black money".
Finance Minister Arun Jaitley announced increases in spending on rural areas, infrastructure and fighting poverty, and sought to assure mps and the country that the economic impact of the government's cash crackdown would wear off soon.
Jaitley also halved the basic personal income tax rate, and cut taxes on small firms that account for 96 per cent of India's businesses, while imposing a surcharge on the better off.
The budget sops come days before India holds five regional elections that will go some way in determining whether Modi can win a second term as Indian leader in 2019.
"This budget is yet again devoted to the wellbeing of villages, farmers and the poor," Modi said in a national TV address soon after Jaitley delivered his two-hour budget speech.
Balancing the books will depend on him hitting his target to sell 725 billion rupees $US10.7 billion ($A14.1 billion) of state assets - or nearly 60 per cent more than the expected proceeds this year.
"Jaitley is leaving room to exceed it at a later time," said Varun Khandelwal, managing director at Bullero Capital in New Delhi. The finance ministry estimates the deficit will come in at 3.2 per cent this year, compared with its 3.5 per cent target.
