The budget comes days before elections in Uttar Pradesh and four other states, raising expectations of amped-up rural and agriculture spending.
Asia's third-largest economy is estimated to expand 9.2 per cent in the financial year that ends in March, following a contraction of 7.3 per cent in the previous one, but the recovery is now seen tapering.
To scale up the economy to $5 trillion by 2025, Ms Sitharaman is widely expected to continue pushing for large-scale spending in hopes of accelerating investment and jobs.
Under plans to spend more on infrastructure, experts expect to see a higher allocation for roads, railways and water.
Ease of tax compliance, simplification and digitisation as well as ease of doing business are expected to be in focus as are measures to support small businesses.
Healthy tax revenues and an ambitious disinvestment plan may help contain the fiscal deficit to 5 per cent next year.
This year, the fiscal deficit is expected to be 6.3 per cent, below the projection of 6.8 per cent, on the back of buoyant tax revenues, limited spending and higher nominal GDP growth.