The economic growth slowdown has appeared to have bottomed out and is expected to pick up in 2020-21, according to Budget documents.
The document further said the prospects for the Indian economy in 2020-21 need to be assessed in the light of emerging global and domestic challenges and opportunities.
Finance Minister Nirmala Sitharaman, while presenting the Budget in Parliament on Saturday, said people of India have unequivocally given jan-aadesh (mandate) for not just political stability but also reposed faith in the government's economic policies.
"During 2014-19, we clocked growth of 7.4 per cent on average with inflation, averaging around 4.5 per cent," Sitharaman said adding that India was able to raise 271 million people out of poverty between 2006 and 2016.
According to the Budget documents, global headwinds and challenges in the domestic financial sector moderated the growth of the Indian economy in 2019-20.
As per the first Advance Estimates released by the National Statistical Office (NSO), the country's economic growth is likely to hit an 11-year low of 5 per cent in the current financial year ending March 2020.
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The Economic Survey on Friday projected revival of economic growth to 6-6.5 per cent in the next financial year starting April 1.
"Despite a temporary moderation in the gross domestic product (GDP) growth in 2019-20, the fundamentals of Indian economy remain strong and GDP growth is expected to rebound from the first quarter of 2020-21," it said.
The documents noted that major challenges for the economy arising from the external front are geo-political tensions in the Middle East and rising crude oil prices due to supply disruption that may decelerate growth and increase inflation.
"Challenges in the domestic front are revival of investments and savings," it said.
According to the documents, fiscal situation remained close to the consolidation path and Consumer Price Index-based inflation was within the targeted limits set by the Monetary Policy Committee of the Reserve Bank of India (RBI).
Despite continuing sluggishness in global demand, the current account deficit narrowed to 1.5 per cent of GDP in the first half of 2019-20 from 2.1 per cent in 2018-19, it said.