NEW DELHI: India's finance minister targeted a return to 9.0 percent economic growth "at the earliest" in a budget speech Monday that suggested the country had seen off the worst of the global financial crisis.

But in announcing increased funding for farmers and poverty alleviation programmes, Pranab Mukherjee also warned that India's soaring fiscal deficit would continue to grow in 2009-10 to 6.8 percent of GDP.

The estimate was far higher than the 5.5 percent put forward by the government in an interim, pre-election budget in February.

The deficit had ballooned to 6.2 percent in the year to March 2009 -- more than double the government's target of 2.5 percent and the highest in nearly two decades.

"The first challenge is to lead the economy back to the high growth rate of 9.0 percent per annum at the earliest," Mukherjee told parliament as he presented the 2009-10 budget.

"The second challenge is to deepen and broaden the agenda for inclusive development," he said.

India's economy grew by 6.7 percent in the year ended March 31 -- the slowest rate since 2003 and down from nine percent a year earlier, as the effects of the global economic downturn hit home.

In its annual Economic Survey presented to parliament last week, the finance ministry had predicted that GDP growth could exceed 7.0 percent this year.

But it stressed that the figure was dependent on a recovery in the global economy as a whole, and that of the United States in particular.

Mukherjee warned that the push for a return to higher growth would have to be balanced against the need for "financial austerity."

Analysing the impact of the global economic crisis on India, he said he believed the "the two worst quarters are behind us".

"But we cannot afford to drop our guard," he added.

It was the Congress-led government's first budget since its unexpectedly decisive victory in April-May elections, and had been keenly anticipated, with the ruling coalition no longer burdened by the need to cater to its erstwhile Communist partners.

The initial stock market reaction however was extremely negative, with the benchmark 30-share Sensex falling 659.55 points or 4.42 percent to 14,253.3 in intra-day trading.

Analysts said Mukherjee's speech, which promised increased spending for farmers and the poor, had failed to provide a clear reform path for boosting growth and reducing the deficit.

"There is nothing in the budget which is specific to help boost growth. It is a complete disappointment," said Apurva Shah, head of research with brokerage Prabhudas Lilladher.

After Mukherjee's speech, Prime Minister Manmohan Singh acknowledged that it was a "primarily rural development-oriented budget."