India unveils budget for recovery after cash crunch

NEW DELHI (Reuters) - India is a "bright spot" in the world economy, Finance Minister Arun Jaitley said as he unveiled his annual budget on Wednesday, adding that the impact on growth from the government's cash crackdown would wear off soon.

Here are the highlights of Jaitley's budget for the 2017/18 fiscal year that begins on April 1.

FISCAL DEFICIT

* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability

GROWTH

* Jaitley says India seen as an engine of global growth

DEMONETISATION

* Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister

 

* Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetisation not expected to spill over to next year

* Pace of remonetisation has picked up and will soon reach comfortable levels

* Surplus money in the banking system will lower borrowing costs, increase credit flow

INFLATION

*Consumer price index inflation is expected to remain within the central bank's mandated range of 2 to 6 percent

SPENDING

* India to spend more in rural areas, infrastructure and poverty alleviation

* The government will continue process of economic reforms for the benefit of poor

AGRICULTURE

* With a better monsoon agriculture is expected to grow at 4.1 percent in 2016/17

* Agricultural credit target fixed at 10 trillion rupees for 2017/18

FINANCE MINISTER COMMENTS

* "India stands out as a bright spot in the world economic landscape."

* "My approach in preparing the budget is to spend more on rural areas, infrastructure and poverty alleviation with fiscal prudence."

* "Signs of retreat from globalization have potential to affect exports from many emerging economies, including India."

(Compiled by Tommy Wilkes; Editing by Sanjeev Miglani)