India's union Finance Minister Pranab Mukherjee has presented the much-anticipated Budget for 2012 and 2013 to parliament on Friday.

Mr. Mukherjee has said that the government needs to accelerate the pace of reforms in the country to improve growth. He also said that fiscal consolidation, as suggested by economic survey tabled in Parliament and the credit policy announcement of the Reserve Bank of India, would require huge efforts.

He expects the inflation in the country to moderate in next few months and remain in the coming months. The Indian economy is expected to grow at 6.9 percent in 2011-12 and 7.6 percent in 2012-13 with an error margin of 0.25 percent. The government will now allow commercial borrowing of up to $1 billion for the airlines in the country to raise working capital for the period of upto one year.

The qualified foreign investors will now be able to participate in Indian corporate debt markets and external commercial borrowing can now be used for part finance rupee debt in power projects in the country.

The total defense allocation has been increased to 1.94 trillion rupees for 2012/13 up from 1.64 trillion rupees in the previous year. The government has set itself a target of 300 billion rupees for disinvestments in 2012-13.

As for the agricultural sector, the government will work to make the country self sufficient in urea production in five years and it is planning to raise agricultural credit target in 2012/13 to 5.75 trillion rupees. It will also aim to keeping the subsidies under 2 percent of GDP and will infuse 159 billion rupees in the state-run banks.

Mr. Mukherjee pointed out that the country enters the 12th Five Year Plan from 1 April 2012.