Jaitley pegs GDP growth at 8-8.5%, says economy is ready to fly

India's gross domestic product is expected to accelerate to 7.4 per cent, making India the fastest growing economy in the world.

The country's GDP growth is expected to be 8-8.5 per cent in 2015-16.

Finance Minister Arun Jaitley said these while presenting the Union Budget in Parliament on Saturday.

We inherited sentiment of gloom and doom, we have come a long way from there, he said.

The economy was ready to 'fly', Jaitley said, adding that the government would boost investment and ordinary people should benefit.

"India is about to take off," Jaitley told lawmakers after rising to deliver his first full-year Budget since Prime Minister Narendra Modi's landslide election victory last May.

Reaping the benefits of low global prices for oil, India's main import, Modi's nationalist government says it is in a sweet spot with spare cash to modernise roads and railways without busting fiscal deficit and inflation targets.

Budget 2015: Complete Coverage

Jaitley said it was time for a 'quantum leap' on reforms and that incremental change 'is not going to take us anywhere', building on expectations that the 2015/16 budget would deliver big-bang reforms.

An overhaul of economic data has propelled India to the top of the league of fast-growing major economies, and the current account deficit is projected to fall below 1 percent next year, which would help stabilize the rupee and build up reserves.

But expectations for a further shift in expenditure from subsidies to infrastructure are sky high among investors who made India the best performing stock market in Asia after China last year on hopes Modi's government brings sweeping reforms to labour, tax and land laws.

"The settings are just right for Finance Minister Arun Jaitley to shun gradualism and go for broke," the Hindustan Times wrote in an editorial.

The market rally has continued this year on expectations that legislative reform will push ahead stalled private investment and consumer demand, and reverse a decline in corporate earnings to make Asia's third-largest economy a global growth driver.

(Additional reporting by Rajesh Kumar Singh in New Delhi and Dipika Lalwani in Mumbai)

Image: A college girl gets her eye painted in tri-colours of India's national flag. Photograph: Ajay Verma/Reuters

Budget 2015: Complete Coverage