NEW DELHI — India’s government is expected to deliver on promises to overhaul the tax regime and ramp up public spending in its Budget on Monday, as Prime Minister Narendra Modi bids to shore up his sagging reputation as a reformer.

The business-friendly leader came to power almost two years ago with promises to overhaul Asia’s third-largest economy and jump-start investment.

But with the halfway point of his term approaching, experts say the Budget has to tackle the failure to translate those bold pledges into action while stimulating consumption.

“This is a make-or-break Budget in some ways,” Mr Rajrishi Singhal, senior geoeconomics fellow at Gateway House think-tank in Mumbai told AFP. “People were a little bit disappointed with the last Budget. Now is the time for him (Mr Modi) to start impressing people.”

Finance Minister Arun Jaitley’s second Budget last year received a cool response in many quarters for its lack of “big bang” announcements.

And while official forecasts predict the economy will grow an impressive 7.6 per cent over the 2015-16 financial year, it still faces heady challenges.

India’s main stocks index has lost nearly a fifth of its value since last year, while the rupee is at its lowest level against the dollar since 2013.

Despite winning a landslide in the Lower House in 2014, poisonous relations between his ruling party and the opposition have stalled the passage of Mr Modi’s flagship goods and services tax (GST) in the Upper House.

While Mr Jaitley has previously outlined his intention to reduce corporate tax from 30 to 25 per cent before the next election, Monday is expected to be the first time he lays out a detailed plan to hit that target.

Mr Soumitra Bhattacharya, joint managing director of the technology company Bosch India, said he was expecting an announcement on how to break the impasse over GST — designed to simplify India’s bewildering multi-layered tax regime — and on the promised cut in corporate tax.

“There is an immediate need to bring GST to reality,” he said. “A clear roadmap for a reduction in the corporate tax rate from 30 per cent to 25 per cent ... will help in boosting business.”

The existing complex corporate tax regime is seen as a turn-off to foreign investors, undermining Mr Modi’s efforts to turn the country into a global manufacturing hub. The government has been praised for efforts to slash red tape, but pundits say it needs to do more to make India an easy place to do business.

Still, while Mr Jaitley is expected to burnish New Delhi’s pro-business credentials, the weakness of the global economy may force him to relax his target for slashing the fiscal deficit in favour of more spending.

Spending pledges are likely to focus on infrastructure, recapitalising public sector banks beset by bad loans, and supporting rural areas.

Generous salary hikes for civil servants are also expected after a pay commission recommended increases of 23 per cent, as is a new pension scheme for retired soldiers.

With these set to cost billions of dollars, the government may delay its target of reducing the fiscal deficit to 3.5 per cent of GDP in 2017 as it instead looks to boost consumption.

Experts stress the bigger issue is whether promises come to fruition. “The question is: Can they carry them out?” said Mr Richard Rossow, an India expert at the Center for Strategic & International Studies in Washington. AFP