India is a "bright spot" in the world economy, Finance Minister Arun Jaitley said as he unveiled his annual budget on Wednesday, adding that the impact on growth from the government's cash crackdown would wear off soon.
"We are seen as an engine of global growth," Jaitley said as he delivered the opening remarks of his fourth budget.
Prime Minister Narendra Modi's surprise decision last November to scrap high-value banknotes worth 86 percent of India's cash in circulation has hit consumer demand, disrupted supply chains and hurt capital investments.
The worst of the cash crunch is now over and the government expects it to be fully cleared by the end of April. A private manufacturing survey on Wednesday showed business is slowly returning to normal.
Still, the finance ministry forecasts that growth could dip to as low as 6.5 percent in the current fiscal year to March, before picking up slightly in the coming fiscal year to between 6.75 and 7.5 percent.