Nirmala Sitharaman was appointed Finance Minister by PM Narendra Modi.

The Union Budget for the current financial year will be presented by Finance Minister Nirmala Sitharaman on July 5, the government announced on Friday, hours after Prime Minister Narendra Modi surprised many by naming the former defence minister for the job.

The announcement came on a day data showed that Asia's third biggest economy grew at its slowest pace in 17 quarters.

While the economy grew at 5.8 per cent in the January-March period, falling behind China's pace for the first time in nearly two years, the unemployment rate rose to a multi-year high of 6.1 per cent in the 2017/18 fiscal year.

The figures highlight the challenges Ms Sitharaman faces in her biggest government position, and raises the need for an urgent stimulus.

Ms Sitharaman, who was a commerce minister and briefly the junior finance minister in PM Modi's first term, got the finance ministry job replacing Arun Jaitley, who opted out of this government due to ill health.

There was also speculation that Amit Shah, chief of the BJP, would head to the finance department but PM Modi instead made him the minister of home affairs.

Regarded as the architect of PM Modi's landslide victory in the recently concluded general election, Mr Shah replaced senior BJP leader Rajnath Singh, the new defence minister.

Ms Sitharaman, 59, is the senior most woman minister in PM Modi's cabinet and the second woman to head the finance department after late former prime minister Indira Gandhi.

She faces pressure from industry for the government to provide some stimulus to halt a worrying slowdown in India's $2.7 trillion economy.

The government is already considering rolling out a slew of 'big-bang' economic reforms in the first 100 days of PM Modi's second term, with a focus on privatisation of state assets and relaxation of labour and land rules for businesses, a top official at the government's main think tank told news agency Reuters.

In its first meeting, the new cabinet on Friday decided to meet its pledge to expand a programme to give Rs 6,000 a year to all farmers. It also announced the economic survey for the financial year will be released a day before the budget on July 4.

PM Modi's government had stepped up farm support and reduced the tax burden for the middle class in its interim budget in February, which was presented ahead of the elections which began in April.