The government will establish a “universal social security system for all Indians, specially the poor and unprivileged”, Arun Jaitley announced.
Jaitley said the system would give poor Indians access to subsidised insurance and pensions and provide coverage for accidents and death for just 12 rupees — less than 20 US cents — a year.
He also pledged major investment in infrastructure , saying it was time for the economy to “fly”, as he unveiled the new right-wing government’s first full budget.
Arun Jaitley said his government had inherited an economy dominated by “doom and gloom” when it took power last year, trumpeting its achievements in conquering inflation and kickstarting growth.
“The credibility of the Indian economy has been reestablished. The world is predicting this is India’s chance to fly,” he said.
Prime Minister Narendra Modi swept to power last year on a pledge to revive India’s flagging economic fortunes and provide jobs for its rapidly growing population of over 1.2 billion.
But he has been criticised for failing to push through the concrete reforms experts say India needs if it is to attract much-needed foreign investment.
On Saturday Jaitley said the government would increase spending on the country’s crumbling roads, railways and ports by $11.3 in 2015/16 as it seeks to win back investment and boost growth.
He said the government would complete 100,000 kilometres of roads currently under construction and build another 100,000 kilometres.
The government will set up tax-free infrastructure bonds to finance its plans through a national fund that would receive a 200-billion-rupee ($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.”
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.
But economists say low oil prices and reduced inflation have given India a genuine growth boost.
India’s government heavily subsidises food and fuel and there had been speculation Jaitley would seek to slash the $40 billion public subsidy bill, aided by the fall in crude prices.
Instead, he pledged to make the schemes more efficient and reduce corruption by accelerating the roll-out of biometric cards and expanding direct cash transfers.
The government has already pledged bank accounts for all to enable it to pay subsidies direct to consumers.
On Saturday Jaitley said it would also make it easier for small businesses to obtain credit through microfinance institutions.
“Just as we are banking the unbanked, we are also funding the unfunded,” he said.