New Delhi: With an assurance that there were clear signs of an economic recovery in India, Finance Minister Pranab Mukherjee on Friday started presenting what was his seventh federal budget, with a promise to cut subsidies, push investment and recast the entire tax regime.

In his speech in Lok Sabha that started promptly at 11 AM, the Finance Minister said the growth of the Indian economy, estimated at 6.9 percent during the current fiscal year was disappointing but that the road ahead appeared reassuring.

"The global crisis has affected us. India's gross domestic product (GDP) is expected to grow at 6.9 percent in 2011-12, after having grown at 8.4 percent in each of the two preceding years," the Finance Minister said.

"Though we have been able to limit the adverse impact of the slowdown in our economy, this year's performance has been disappointing. But it is also a fact that in any cross-country comparison, India still remains among the front-runners in economic growth."

At the same time, Mukherjee also said the Indian economy was at the cusp of a revival, as agriculture and services have continued to grow at a decent pace. It was industrial performance that was acting as a drag.

"While we do not have the aggregate figures for the last quarter of 2011-12, numerous indicators pertaining to this period suggest that the economy is now turning around. There are signs of recovery in coal, fertiliser, cement and electricity sectors."

Among the proposals, the Finance Minister assured that he would cut subsidies to no more that 2 percent of GDP, and that the policy now would to directly transfer such doles to farmers, based on the recommendations of the Nandan Nilekani report.

He also assured that a network necessary for a uniform pan-India goods and services tax (GST), covering federal and state levies, would be ready by August this year and that the process will be expedited to introduce it as soon as possible.

He said the government was also examining the recommendations of a parliament panel on the Direct Tax Code and that this regime will be introduced soon.

The Finance Minister said it was the government's objective to reform and simplify norms governing capital markets, in a bid to enthuse and improve the investment climate in the country.

Mukherjee said as India enters the 12th Five Year Plan, beginning April 1, the focus of his government would be on five key areas:

-Framing policies that trigger domestic demand recovery

-Ensuring rapid rise in private investment

-Removing bottlenecks in agriculture, energy, transport, coal, power and national highways

-Addressing malnutrition

-Finding ways to expedite implementation of decision, prompt delivery and good governance with transparency, while curbing black money and corruption

(Agencies)