In a bid to boost growth for those hurt by his cash ban, Modi on Wednesday promised increased infrastructure spending and jobs training and slashed taxes for companies with a turnover of fewer than 500 million rupees  ($7.4 million). Accounting for 96 percent of all registered companies, these firms employ 40 per cent of Indian workers and vast numbers are based in Uttar Pradesh which goes to the polls this month. 

"This is a smart move to get rural votes," said Raghbendra Jha, an economics professor at Australian National University. "It's tried to soothe the effects of demonetization".

Modi has budgeted to boost overall spending 6.6 percent to 21.5 trillion rupees in the year starting April 1, funded by a 13 percent increase in tax collections. The budget deficit is forecast to be 3.2 percent of the gross domestic product, wider than the previous target of 3 percent. 

Delivering the budget Wednesday, Finance Minister Arun Jaitley cut the tax rate for firms that report a turnover of fewer than 500 million rupees to 25 percent, benefiting 96 per cent of the country's registered companies.

Jaitley also doubled the credit target to unfunded and underfunded firms to 2.4 trillion rupees, said the government will seek to provide a record 10 trillion rupees in loans to farmers and boosted allocations for a rural jobs program. He lowered income tax rates for people earning less than 500,000 rupees.

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