The government, whose mandate expires in May, has already loosened purse strings by presenting two stimulus packages and further moves are anticipated in the interim budget to shield the economy from the global slump.

Acting Finance Minister Pranab Mukherjee has given strong hints of more measures to boost growth, especially in export and other sectors where jobs are at risk in the country of 1.1 billion people.

'There's a need to sustain our foreign trade, revive foreign investment and generate domestic demand in order to maintain our growth rates,' he said. Such steps 'are essential to lift up the multitudes from below the poverty line.' The full budget for the financial year 2009-10 will be presented by the party which wins power and will not come until around July.

But the mini-budget, which will seek spending approval for the period until then, will signal the direction of Congress's election campaign and aims to be a please-all document with a populist streak, economists say.

The Congress-led government owed its surprise 2004 election win to India's impoverished masses, who turfed out the Hindu nationalist Bharatiya Janata Party because they felt bypassed by an economic boom.

Congress's 'aim is to get re-elected,' said economist Deepak Lalwani, India Director at London's Astaire and Partners.

Industry has been clamouring for more moves to aid the ailing manufacturing, construction, infrastructure, automobile and other sectors.

Half a million workers lost their jobs in the three months to December, with export-oriented sectors worst hit, according to government data.

An export lobby group forecasts the number of unemployed will rise to at least 1.5 million by the end of this fiscal year to March 2009.

The latest slowdown signs were figures last week showing December factory output shrank by two per cent to hit a 15-year low.

The government expects growth to slacken this year to 7.1 per cent - the weakest in six years. The economy grew by a minimum nine per cent in the three previous years.

Economists warn the economy could lose more steam next year, slowing to 5.5 per cent.

Analysts say the government's slowdown fighting efforts may have pushed up the fiscal deficit to 7.5 per cent of gross domestic product for the current year, triple an earlier target of 2.5 per cent.

The mini-budget is expected to be swiftly followed by more cuts in central bank interest rates to spur domestic demand and ease tight credit conditions.

'With activity continuing to weaken rapidly, we believe further action is necessary on both the monetary and fiscal policy fronts,' said Goldman Sachs economist Tushar Poddar.

At the same time, Commerce Minister Kamal Nath has warned there's no magic wand to eliminate the knock-on effects of the worldwide downturn on Asia's third-largest economy.

'India cannot pull out a package to take care of economic stresses in Europe and the US.' -- AFP