India's new government unveils reform budget

MUMBAI, India (AP) — India's new government has introduced a reform-minded budget focusing on promoting manufacturing and infrastructure, expanding the tax base and overhauling populist subsidies.

The budget for the fiscal year ending March 2015 is being closely watched as an indicator of whether Prime Minister Narendra Modi's government will act quickly to will deliver on promises to revive stalled economic growth.

Finance Minister Arun Jaitley on Thursday outlined the broad strokes of the plan. He said he would keep the government's budget deficit at 4.1 percent of GDP this fiscal year. He said early on in his speech the government would overhaul subsidies to be "more targeted" but gave no details.

He also announced raising the limits on foreign investment in the defense and insurance industries to 49 percent from 26 percent.