The budget for the current fiscal also comes against the backdrop of the Economic Survey 2013-14, the annual report card on the state of the nation, which has termed inflation-control, job creation and pushing growth as the three main challenges before the country, while calling for a fresh dose of reforms.
Expectations have, indeed, been high from the upcoming budget after Modi came into power with a landslide victory in the general elections, mainly on the promises of ushering in happy days for India's 1.2 billion people by creating more jobs, providing relief from price rise and reviving growth.
Jaitley, it is widely believed, will raise tax slabs, as it will be a very visible measure of relief to the common man, but also seek to keep the fiscal deficit under check, with some measures that will seek to address issues such as rationalising the subsidy regime.
This apart, a host of steps are also expected to signal a fresh life to economic reforms that are needed to spur investment and growth, as also measures to restore business confidence, which was perceived to have suffered a set back during the dying days of the United Progressive Alliance (UPA) government.
All these are difficult challenges to address, but the finance minister has already made it clear that his government will not resort to mindless populism and will take bold decisions to revive growth and follow the path of fiscal prudence.
On the policy side, the budget is also likely to announce a clear roadmap for the implementation of the much-delayed indirect tax reform with a new Goods and Services Tax (GST) regime that will not only have a pan-India uniformity but also set the tone for reforms.
Doing away with retrospective taxation and implementing the Direct Taxes Code (DTC) as soon as possible are also on the wish list of most of the industry people.
Jaitley is also likely to announce price stabilisation fund, as promised in Bharatiya Janata Party (BJP) election manifesto and incentives to boost affordable housing.
The budget comes at a time when the country is passing through a very difficult macro-economic situation. The economy is suffering from its worst slowdown in nearly three decades, inflation remain stubbornly high and the fiscal situation fragile.
The finance minister is likely to keep a higher target of revenue from asset sales that would help bridge financing gap.
Earlier in the day, the finance minister tabled the Economic Survey 2013-14 in parliament. The annual report card on the state of the country's economy said price rise remained a cause for worry and called for a complete rehaul of the subsidy regime and increasing tax revenues.