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NEW DELHI, July 5 (Reuters) - India Prime Minister NarendraModi's government unveiled the budget for 2019/2020 on Friday,seeking to reverse weakening growth and investment that threatento take the shine off a recent landslide election victory.
Finance Minister Nirmala Sitharaman, presenting the annualbudget statement to parliament, said the government plannedstructural reforms to kickstart foreign and domestic investment.
Modi has set a target of growing India into a $5 trillioneconomy by 2024/2025 from $2.7 trillion that a government reporton Thursday said will be done on the back of higher investment,savings and exports in the way China's growth was propelled.
"We need to invest heavily in infrastructure, digitaleconomy, job creation," Sitharaman said, adding India is set tobecome a $3 trillion economy in the current fiscal year.
But economists say scaling up Asia's third largest economyin rapid fashion will need bold reforms including freeing upland and labour markets, which Modi shied away from in his firstterm for fear of political backlash.
Capital Economics said in a note on Friday that reachingthat target "is dependent in large part on achieving real GDPgrowth of 8% a year, which we think is unlikely."
Land and labour reforms are difficult in a democracy likeIndia and it seems unlikely Modi will risk drawing the ire ofhis Bharatiya Janata Party voters that re-elected him with ahuge mandate.
India's economy is also running into global headwinds withgrowth weighed down by trade wars and protectionism.
Asia's third largest economy grew at a muchslower-than-expected 5.8% in the last quarter, the weakestgrowth in five years and far below the pace needed to generatejobs for the millions of young Indian's entering the labourmarket each month. And the unemployment rate rose to amulti-year-high of 6.1% in the 2017/18 fiscal year.
New investments proposals in 2018/19 fell to 9.5 trillionrupees, the lowest investment proposals recorded in 14 years,according to Centre for Monitoring Indian Economy (CMIE), aMumbai based think tank.
(Additional reporting by Mayank Bharadwaj and New Delhi, Mumbaiand Bengaluru bureaus; Writing by Sanjeev Miglani; Editing byRichard Borsuk) ((sanjeev.miglani@thomsonreuters.com; +91 11 49548038; ReutersMessaging: sanjeev.miglani@thomsonreuters.com@reuters.net))
