New Delhi, Feb 26 (IANS) Finance Minister Pranab Mukherjee Friday began presenting India's budget for the next fiscal, recalling the hard days of past two years, but with an assurance that the worst was over for the economy and the days ahead were promising though not without challenges.

"Today, as I stand before you, I can say with some confidence that we have weathered this crisis well," Mukherjee told the Lok Sabha, the lower house of parliament.

"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 added.

He said three challenges he had listed last year remained relevant 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 in rural areas; and strengthening food security.

The finance minister said in 2009, when he presented the interim budget in February and the full budget in July, the Indian economy was facing grave uncertainty, the economy slowed down and business sentiment was low.

But this year, the budget has came 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 initial market reaction, as the finance minister began his budget speech was guarded, with the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ruling at 16,347.72 points, against the previous day's close at 16,254.2 points, with a gain of 93.52 points, or 0.58 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.

Highlights of 2010-11 budget presented by Finance Minister Pranab Mukherjee in parliament Friday:

-- Forty-six percent of plan allocations in 2010-11 will be for infrastructure development

-- Coal Regulatory Authority to be set up to benchmark standards of performance

-- Allocation for new and renewable energy sector increased 61 percent from Rs.620 crore to Rs.1,000 crore in 2010-11

-- National Clean Energy Fund to be established

-- Rs.200 crore allocated as special package for Goa to prevent erosion and increase green cover.

-- Government committed to growth of SEZs.

-- Four-pronged strategy for growth of agricultural sector.

-- Rs.200 crore to be provided in 2010-11 for climate-resilient agricultural initiative.

-- Involvement of private sector in grain storage to continue for another two years.

-- In view of drought and floods, debt repayment period extended to June 2010.

-- Five more mega food processing projects in addition to 10 existing ones.

-- FDI flows in April-December 2009 $20.9 billion.

-- FDI policy to be made more user-friendly with one comprehensive document.

-- Apex level financial stability council to be set up for banking sector.

-- Indian Banking Association to give additional licences to private players.

-- Provision for further capital for regional rural banks.

-- Roadmap for reducing public debt in six months.

-- Implementation of direct tax code from April 2011.

-- Government actively engaged in finalising structure of general sales tax regime; hopes to implement it from April 2011.

-- Rs.35,000 crore raised from divestment in 2009-10; will be higher in 2010-11.

-- New fertiliser policy from April 2010; will lead to improved productively and more income for farmers.

-- Economy stabilised in first quarter of 2009-10; strong rebound in second quarter; overall growth at 7.2 and could be higher when Q3 and Q4 are taken into account.

-- Export figures for January encouraging.

-- Hope to breach 10 percent growth mark in not too distant future.

-- Government set in motion steps to bring down food inflation.

-- Need to review stimulus package; need to make growth more broad-based.

-- India has weathered global economic crisis well; Indian economy in far better position than it was a year ago. In 2009 Indian economy faced grave uncertainty; delay in southwest monsoon had undermined agricultural production.

-- First challenge now is to quickly revert to 9 percent growth and then aim for double digit growth; need to make recovery more broadbased.

-- Second challenge is to make growth more inclusive; have to strengthen food security.

-- Third challenge is to overcome weakness in government's public delivery mechanism; a long way to go in this.