The tone of the report is bound to increase speculation that Finance Minister Arun Jaitley will announce a higher fiscal deficit target in his maiden budget, which he will present on Thursday.

"The Economic Survey 2013-14 conveys a sense of urgency about the course the economy needs to undertake," Arvind Mayaram, the Finance Ministry's top bureaucrat, wrote in a foreword of the report.

Jaitley's predecessor set a target of keeping the fiscal deficit to 4.1 percent of Gross Domestic Product (GDP) in an Interim Budget before the new government took office.

Many economists say that the goal is unrealistic because the outgoing government left a stack of unpaid bills to state oil companies that have eaten into this year's finances.

A poll of economists this week predicted that the government would set a new deficit target of 4.4 percent.

The report recommended tackling food and fertilizer subsidies to lower spending, while broadening the tax base. Tax collection is less than nine percent of GDP, about a quarter of the average in the OECD group of developed nations.

READ MORE: Indian economy will grow 5.4-5.9 percent in 2014-15: Survey

The Economic Survey, presented the day before the budget, forecast GDP growth of between 5.4 and 5.9 percent in 2014/15. It warned that weak monsoon rains, which are essential for farming, could keep growth closer to 5.4 percent.

In June, the RBI forecast growth of 5.5 percent in the financial year that ends in March 2015.

India has been stuck in its longest rut in a quarter of a century - with growth below five percent - while Modi's government has been dogged by a food-price spike in its early weeks.

63-year Modi won a landslide victory in the 2014 Lok Sabha polls with a pledge to boost growth and create jobs for one million people, who enter India's workforce every month.


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