"People who urged us to undertake 'big bang' reforms also say the Indian economy is a super giant, which moves slowly but surely," Jaitley told parliament as he wrapped up a 90-minute speech.
"Even our worst critics would admit we have moved rapidly," he said.
Jaitley promised higher investment in India's decrepit roads and railways, offered the carrot of corporate tax cuts to global corporations and the stick of tighter compliance rules to get Indian tycoons to invest at home rather than stash wealth abroad.
Although Jaitley forecast that growth would accelerate to 8-8.5 percent in the fiscal year starting in April, up from 7.4 percent this year, businesses have yet to respond to Modi's call to "Make in India".
Jaitley forecast inflation at 5 percent by the end of the fiscal year ending March 2016, undershooting the Reserve Bank of India's 6 percent target and creating room to cut interest rates. Annual inflation was 5.1 percent in January.
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But he pushed back by a year, to 2017/18, a deadline for cutting the fiscal deficit to 3 percent of gross domestic product. In 2015/16, the deficit will be 3.9 percent of GDP, above the 3.6 percent target inherited from the last government.
In volatile trading, India's NSE share index gained as much as 1 percent as Jaitley gave an upbeat economic outlook, but went into the red on his comment that the fiscal deficit would slip, and traded 0.4 percent lower after his speech.
Radhika Rao, an economist at DBS in Singapore, said the deficit slippage was unlikely to draw the immediate ire of credit-rating agencies, and she expects the private sector to follow the lead set by the government, which is hiking capital investment by a quarter to $39 billion.
"Today's budget was pragmatic, wide-ranging and inclusive," Rao said.
India's budget concentrates a year's economic policymaking into a single speech, and the range of measures Jaitley announced included a monetary policy overhaul, a bankruptcy code and the creation of a public debt management agency.
The 62-year-old finance minister, who underwent surgery last year to treat diabetes, sat down around 20 minutes into his speech and gave the rest from the government's front bench.