"Today, as I stand before you, I can say with some confidence we have weathered this crisis well," Mukherjee told the Lok Sabha, the lower house of parliament, while presenting the federal budget for the next fiscal.
"That is not to say that the challenges today are any less than they were nine months ago, when the UPA (United Progressive Alliance) was voted back to power under the leadership of Sonia Gandhi and Prime Minister Manmohan Singh."
He said three challenges he had listed last year remained today -- those of quickly reverting to a high growth path of 9 percent and cross over to double-digit expansion; making growth more inclusive and developing infrastructure; and strengthening food security.
"We hope to breach the 10 percent growth mark in not too distant future," he said, adding that the government will also review the fiscal stimuli to make the country's growth more broad based.
He said 46 percent of the plan allocation will be for infrastructure, the direct tax code will be implemented from April next year, foreign direct investment policy will be simplified and a roadmap drawn to reduce public debt. The allocation for education was also stepped up considerably.
He also said Rs.35,000 crore ($7 billion) was raised by the government by way of divesting stake in public sector enterprises and that more will be accrue to the exchequer during the upcoming fiscal. The minister also promised more banking licenses for the private sector.
Mukherjee said in 2009, when he presented the interim budget in February and the regular budget in July, the Indian economy was facing grave uncertainties, the economy had slowed down and business sentiment was low.
This year, however, the budget has come against the backdrop of the Economic Survey for 2009-10, saying India's growth can go up to double digit levels in four years, with the country emerging as the fastest growing economy in the world.
The market reaction, as the finance minister read his speech was positive, with the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ruling at 16,360.90 points, against the previous day's close at 16,254.2 points, with a gain of 106.7 points, or 0.65 percent.
Those in the packed house presided over by Speaker Meira Kumar, included Prime Minister Manmohan Singh, United Progressive Alliance (UPA) chairperson Sonia Gandhi and Leader of Opposition Sushma Swaraj.
This was Mukherjee's fourth budget of his career as finance minister and the second for the United Progressive Alliance (UPA) government in its second straight term after being voted back to office in May last year.
Although the budget speech also contained some policy pronouncements and other steps directed at reforms, it is basically an annual statement of accounts for the upcoming fiscal in terms of receipts and expenditure, along with direct and indirect tax proposals.
The budget was presented after a quick meeting of the federal cabinet inside the parliament house presided over by the prime minister for a customary approval for the proposals.
Economists polled by Reuters forecast Asia's third-largest economy would cut its fiscal deficit to 5.6 percent of GDP in the year starting April 1, from a target of 6.8 percent in the current year, a 16-year high.
Government borrowing was forecast to rise by another 2.2 percent to 4.61 trillion rupees ($99.5 billion), according to the Reuters poll.
Indian federal bond yields rose late on Thursday after Planning Commission Deputy Chairman Montek Singh Ahluwalia said that strong growth in 2010/11 could absorb higher borrowing, raising concerns that the government may be looking to tap markets for more than had been expected.
Calls for fiscal discipline have gained urgency as inflation is forecast by some economists to reach 10 percent in coming weeks as high food prices fuel broader inflation expectations.
Finance Minister Mukherjee was expected to count on surging economic growth, which his ministry forecasts will grow by 8.5 percent in the next fiscal year, as well as higher revenues from sales of government company stakes and 3G mobile licences to forestall the need for spending cuts.
The government growth target for next year exceeds the 8 percent forecast in a Reuters poll of economists in late January.