Finance minister Arun Jaitley’s maiden Budget on Thursday put more money in the hands of salaried employees, made aspirational goods cheaper for the poor and set up a fund to counter spikes in food prices.

Finance minister Arun Jaitley with MOS Nirmala Sitharaman and secretaries leave North Block to present union budget in Parliament. (HT photo/Mohd Zakir)

Finance minister Arun Jaitley, MOS and his officers briefed President Pranab Mukherjee on the main features of the union budget 2014. (Photo credit: Twitter)

Finance minister Arun Jaitley with his MOS Nirmala Sitharaman and secretaries leave North Block to present union budget 2014-15 in Parliament. (HT photo/Mohd Zakir)

Security officials guard budget copies at Parliament House as finance minister Arun Jaitley to present union budget 2014-15 in Parliament in New Delhi. (HT photo/Vipin Kumar)

Industrialists view the budget speech in New Delhi. (HT photo/Mohd Zakir)

Women express gratitude to finance minister Arun Jaitley for the e-visa announcements in the budget, in Moradabad. (PTI photo)

People watch live telecast of general budget 2014-2015 on TV sets in Allahabad. (PTI photo)

Security personnel stand guard near sacks containing the papers of the union budget 2014-15, at the parliament in New Delhi. (Reuters photo)

A man looks at the display screen on the facade of the Bombay stock exchange (BSE) in Mumbai. Modi government introduced a reform-minded budget. (AP photo)

Brokers at a stock exchange market in Kolkata on budget day. (PTI photo)

Union ministers during presentation of the budget 2014-15 in the Lok Sabha in New Delhi. (PTI photo)

Pedestrians watch the share prices ticker alongside a digital broadcast of finance minister Arun Jaitley delivering his budget speech at the Parliament, on a screen outside the BSE in Mumbai. ...

PM Narendra Modi during the presentation of the union budget in Lok Sabha. (PTI photo)

Congress president Sonia Gandhi and party vice president Rahul Gandhi during presentation of the union budget 2014-15 in the Lok Sabha in New Delhi. (PTI photo)
The economic document, which had a strong imprint of PM Narendra Modi, lifted stock markets briefly, indicating that it had achieved the difficult task of not disappointing extremely bullish investors.

But Jaitley’s first crack at mending the country’s economy was bereft of grand gestures and focused instead on setting the tone for a five-year long haul that could be punctuated with short-term shocks.

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Read: Budget 2014 – Ambitious plan set to reduce fiscal deficit

Jaitley, 61, delivered a clear message in a marathon 127-minute speech: Nurse public finances, tame inflation and simplify tax laws; growth, investment and jobs will follow. But he was clear about the transition being painful.

“The prevailing economic situation presents a great challenge. It calls for a conscious choice to be made by all of us. Should we allow this drift to carry on and watch helplessly? Should we allow our future to suffer because of our indecisiveness? Should we be victims of mere populism or wasteful expenditure?” he said.

The BJP has long said it is inheriting an economy that is in the doldrums due to mismanagement by the Congress-led UPA, and has tried to manage expectations of a quick recovery. But its first Budget since an emphatic election victory was always going to be closely watched.

Jaitley tried not to disappoint his audience, outlining a raft of measures aimed at spinning jobs, multiplying income and helping families deal with ballooning home budgets.

Read: A roof over every head – Govt raises exemption on home loans

The salaried class got tax breaks; the young, who were instrumental in voting the BJP to power, got a skill development plan to smoothen their entry into job market and for those looking to branch out on their own, concessions were announced.

India needs to create some 100 million jobs over the next decade or so if it is to enter the league of developed nations, but risks economic and social disaster if it fails to provide employment to its burgeoning youth population.

As it looks to cities for employment and living, a plan to build 100 smart cities was set in motion. Infrastructure, one of the biggest hurdles in India’s growth story, was put in the fast lane, with Jaitley setting an ambitious target of building 23km of highways per day.

Asia’s third-largest economy is now in its longest slump for a quarter century but Jaitley is hamstrung by little room to offer tax giveaways or launch into big spending.

But he did manage to cut excise and customs duty on a host of products or inputs: Soaps, batteries, footwear, processed food, cement, yarn and computers.

Read: Excise cuts on TVs, more services under service tax

Importantly, the government made clear its stand on the controversial retrospective taxes — these will now be applicable only in “genuine” cases.

“The sovereign right of the government to undertake retrospective legislation is unquestionable. However, this power has to be exercised with extreme caution and judiciousness keeping in mind the impact of each such measure on the economy and the overall investment climate,” Jaitley said in an oblique critique of the previous government’s policies, which had spooked foreign companies.

Read: I have tried to address unresolved problems, says Arun Jaitley

Markets appeared dissatisfied with this statement as they had expected a complete repeal of the law, but later the BSE Sensex vaulted more than 400 points after the minister’s individual tax proposals.

After a heady swing of 800 points intraday, the Sensex ended 72 points, or 0.28%, down at 25,372.

He also announced a plan to earn about Rs. 43,000 crore this year by selling shares in state-owned firms, slightly lower than Rs. 56,000 crore set by predecessor P Chidambaram in the interim budget in February.

He raised the annual income tax exemption limit by Rs. 50,000 to Rs. 2,50,000 for men and women, and to Rs. 3,00,000 for senior citizens.

The minister pegged the fiscal deficit — a measure of the amount the government borrows to fund its expenses – at 4.1%, the same as P Chidambaram’s interim budget estimates, saying he wanted to take it as a challenge.

Read: Tax breaks under section 80C extended

Highlights of the Union Budget 2014-15

Fiscal deficit
* Accepts fiscal deficit target of 4.1% of GDP for 2014/15
* Fiscal deficit seen at 3.6% of GDP in 2015/16
* Finance minister says: "We cannot spend beyond our means"
* Tax-to-GDP ratio must be raised

Growth
* Aims for sustained growth of 7-8% in the next 3-4 years
* Finance minister says he is bound to usher in policies for higher growth, lower inflation

Taxation
* Aims to approve goods and services tax by end of this year
* Will not change rules on retrospective taxation
* All pending cases of retrospective tax for indirect transfers to be examined by a high-level committee before action is taken
* Proposes changes in transfer pricing mechanism

Investment
* Raises limit on foreign direct investment in defence sector from 26% to 49%; raises FDI limit in insurance sector to 49%
* Earmarks 70.6 billion rupees to create 100 "smart cities"
* Will provide the necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts
* Proposes 40 billion rupees for affordable housing through national housing bank and extends tax incentives for housing loans

Subsidies
* Plans to make food and petroleum subsidies more targeted
* Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become more focused on asset creation
* Proposes 80 billion rupees for rural housing scheme
(With Reuters and AFP inputs)