DELHI - India's government promised billions of dollars to help struggling farmers and boost the rural economy as it unveiled its annual budget on Monday, looking to kickstart growth and bolster its flagging popularity.
India is now the world's fastest-growing major economy. But two years of drought and a failure to create jobs for a burgeoning young population has left millions of rural residents struggling and led to deadly protests in recent weeks.
The government came to power nearly two years ago promising to transform India's economic fortunes. But it has been hampered by the global economic slowdown and a failure to push much-needed reforms through parliament.
Finance Minister Arun Jaitley acknowledged the challenges as he presented the budget in parliament, but said he had a "vision to transform India".
"We have a desire to provide socio-economic security to every Indian, especially the farmers, the poor and the vulnerable," he said.
"We have a dream to see a more prosperous India and a vision to transform India." Jaitley pledged to spend 359 billion rupees ($5.2 billion) on doubling the income of India's estimated 120 million farmers over the next five years through measures including a crop insurance scheme and better access to markets.
The vast farming sector is suffering after two years of weak monsoon rains, and from high inflation.
The budget outlined plans to raise credit available to farmers to nine trillion rupees for 2016-17, and pledged to ensure all the country's villages have electricity within two years.
The government will increase spending on the National Rural Employment Guarantee Scheme, which guarantees 100 days of employment on public works each year for any household that requests it.
Prime Minister Narendra Modi previously called the scheme a "living monument" to the "failures" of the previous Congress-led government.
Analyst Samir Saran said the ruling Bharatiya Janata Party (BJP) was "responding to the political reality" before state elections this year and next.
"The BJP has to lay greater emphasis on social policy, it has to deliver a more populist budget," said Saran, a senior fellow at the Observer Research Foundation think tank.
The BJP needs to perform well in those elections in order to push stalled economic reforms through the national parliament's upper house, where it lacks a majority.
These include Modi's flagship plan to introduce a national Goods and Services Tax to replace myriad complex state and national levies seen as deterring much-needed investment.
India is considered a relative bright spot in the world economy, but feeble global demand has caused its exports to shrink for 14 months and investment remains weak.
The opposition Congress party dismissed the budget as "a wasted opportunity".
"What is the one big takeaway for the average citizen? It is that there is no big idea," said Congress spokesman P. Chidambaram.
The main Sensex index on the Bombay Stock Exchange closed down 0.66 percent after the budget, which included a hefty 23 percent pay rise for millions of civil servants and a pension scheme for retired soldiers.
The two schemes will add billions of dollars to the government's spending bill over the next year, but Jaitley said it would stick to its ambitious target to cut the fiscal deficit to 3.5 percent of GDP in 2016-17.
The government plans to counter big spending pledges with double-digit increases in tax collection - with plans to bring more people into the tax net, raise levies on cigarettes and SUVs and increase an income surcharge on the super-rich.
Jaitley also pledged to spend 2.21 trillion rupees on improvements to roads and other infrastructure.
The government will also inject 250 billion rupees into public-sector banks, which are weighed down by bad loans.
Despite a major push to boost manufacturing, farming remains by far the biggest employer in India.
Earlier in February the Jats, traditionally a farming caste, sparked riots in northern India to press demands for better access to government jobs and education. They say they are struggling to make a living.
The BJP performed poorly in elections in the impoverished eastern state of Bihar last year and faces polls in other major farming states this year and next.