KUALA LUMPUR (Reuters) - Malaysian Prime Minister Najib Razak announced a raft of manifesto pledges targeting key voter bases on Saturday as his ruling coalition gears up for one of its toughest elections since independence in 1957.

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On Friday, Najib announced the dissolution of parliament, paving the way for a general election to be held within 60 days.

Najib is under pressure to deliver a strong victory for his ruling Barisan Nasional (BN) pact, as he struggles with a multi-billion dollar financial scandal at a state fund and public anger over rising living costs.

The prime minister presented a manifesto promising incentives for ethnic Malays and palm oil operators, promising to steer the country on a path of continued development and announcing measures to tackle the rising cost of living.

He said if the BN coalition retains power he would raise the minimum wage to 1,500 ringgit ($388) per month, modernize transportation infrastructure, create 3 million new jobs, provide more affordable housing and universal childcare and strengthen religious institutions.

“The 14th general election is a crossroads. This is an election that will decide the survival of Malaysia. It will decide our destiny,” Najib said when unveiling the manifesto.

“BN will continue to fight for the fate of each Malaysian... every Malaysian is important to BN,” the prime minister said to cheers from about 10,000 supporters gathered at a concert hall on the outskirts of Kuala Lumpur.

Najib and his coalition face an unprecedented challenge from his former mentor and former prime minister, Mahathir Mohamad who has joined hands with old foes in the federal opposition and is their candidate for premier.

Mahathir, 92, turned on Najib after news broke of billions of dollars allegedly misappropriated from state fund 1Malaysia Development Berhad (1MDB), including $681 million in funds that found their way into the prime minister’s personal accounts.

Najib has denied any wrongdoing and local authorities have cleared him.

In his election pledges, Najib promised his government would allocate up to 300 million ringgit ($77 million) to write off some debts of operators of palm plantations under the state-owned agency Felda over the next five years.

He also said children of recipients of a government cash benefit would receive 1,500 ringgit if they get accepted into university.

Both promises would help ethnic Malays, who account for more than 50 percent of Malaysia’s population and have largely supported BN.

Analysts say Najib is still widely expected to win, but a significant loss of seats - especially for his United Malay National Organisation (UMNO) - would leave him open to a leadership challenge.