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India pledges economic take-off with new budget

India's finance minister has unveiled the new government's first full budget. He promised increased infrastructure spending, particularly on road and rail, and universal social security.

Announcing the budget on Saturday, Finance Minister Arun Jaitley said it would boost growth to as much as 8.5 percent in the fiscal year starting in April, compared with an expected 7.4 percent in the current year.

"India is about to take off," Jaitley told lawmakers, adding: "The world is predicting that this is India's chance to fly."

He said the government would increase spending on roads, railways and ports by $11.4 billion (700 billion rupees, 10.18 billion euros), completing 100,000 kilometers (62,137 miles) of roads currently under construction and building another 100,000 kilometers.

Jaitley also announced plans for a universal social security system that would provide subsidized insurance and pensions to the poor.

Under the scheme, Indians would be able to receive insurance coverage against accidents and death for just 12 rupees (under 20 US cents) a year.

Other measures to be introduced were a monetary policy overhaul, a bankruptcy code and the formation of a public debt management agency.

Economic boost

India's new right-wing government under Prime Minister Narendra Modi

swept to power last year

on the back of promises to revive the country's faltering economy and provide employment for the population of more than 1.2 billion people.

However, Modi's ruling Bharatiya Janata Party (BJP) has since faced criticism for not introducing the reforms economists say are needed if India is to draw foreign investment. The party was given a

drubbing last month at state elections in Delhi.

India's economy has been seen as stagnating in recent years, but economists say it has recently received a boost through low oil prices and reduced inflation.

If the government forecast of 7.4 percent growth for 2014-15 is correct, India would be the

world's fastest growing major economy.

tj/kms (AFP, Reuters)

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