India's Finance Minister Nirmala Sitharaman presented the government's 10th budget to parliament Thursday.

"The economy has undergone a profound transformation," she said.

This is the interim budget for 2024-25, the current administration's last one before India heads to general elections due by May this year. This budget is being seen as an economic manifesto for Prime Minister Narendra Modi's plans for its financial policies.

The final budget will be presented by the new government that comes to power.

"The next five years will be years of unprecedented development and golden moments to realize the dream of developed India by 2047," Sitharaman said.

The government will spend a record 11.11 trillion rupees ($133.87 billion or €124 billion) on infrastructure creation in the upcoming financial year, to ensure India remains one of the fastest growing economies. 

Sitharaman said the allocation for capital expenditure for the next financial year is 11.1% higher than the current year, even as the overall spending rises at a slower 6%.

What was announced in India's budget?

Sitharaman said her government is focused on improving conditions for the poor, women, youth and farmers. Inflation and lack of growth in wages has hurt lower income earners, especially in rural areas.

She referred to a report by NITI Aayog, the government's public policy think tank which said 248 million people have been lifted out of multidimensional poverty in the last 10 years.

Sitharaman said the government will build 20 million affordable houses in the next five years, and launch a housing scheme for the middle class.

Sitharaman announced a new program called "Green Growth," through which the government plans to encourage green manufacturing, and transform the sector from "consumptive" to "regenerative."

She added that India has set a target to narrow its fiscal deficit to 5.1% in the fiscal year 2024/25, after lowering the current year's deficit to 5.8% of gross domestic product (GDP).

There were no changes announced to the tax policy.

Material from Reuters contributed to this report

Edited by: Rob Turner