Besides cost cutting, to boost growth, the government announced RMB 577.6 billion (US$86.12 billion) in infrastructure investment, an increase of RMB 40 billion (US$5.96 billion) compared to past year. The shift to a band from the previous practice of using a point figure gives policy makers room for maneuver and compares with last year's "about" 6.5 percent goal.
Beijing has also stepped up its rhetoric against any independence movements in self-ruled Taiwan and continues to assert its vast territorial claims in the disputed South China Sea and East China Sea.
Proposed tax cuts of up to 2 trillion yuan ($300 billion) would put "significant spending power" in the hands of consumers and companies and help to buoy sagging demand for autos, household appliances and other goods, said Mr. Varathan.
A separate government budget released on the same day said that the science and technology budget would be RMB 354.31 billion (US$52.88 billion), an increase of 13.4 percent year-on-year.
Beijing will also pick up spending, with China's targeted fiscal deficit set to increase to 2.8 percent of GDP, from 2.6 percent a year ago.
The finance ministry also said the country's defense budget this year will rise 7.5 percent.
"China will face a graver and more complicated environment as well as risks and challenges that are greater in number and size", Li told the National People's Congress.
He added that China-US economic and trade frictions "had an adverse effect on the production and business operations of some companies and on market expectations".
China's central government said Tuesday that it will lower the growth target for the country's GDP, the latest sign that the world's second biggest economy is in the grips of a major slowdown.
To combat problems facing small business, Beijing will raise the Value-Added Tax threshold to 100,000 yuan ($15,000) in monthly sales, from 30,000 yuan ($4,500) and direct large state banks to lend 30 percent more to small firms this year. A year since removing any legal barrier to remaining China's leader for life, Xi Jinping appears firmly in charge, despite a slowing economy, an ongoing trade war with the USA and rumbles of discontent over his concentration of power. "They need to strike a balance between boosting economic activity and not restart another debt-fuelled boom".
Of China's 31 provinces, regions and municipalities, 24 have already lowered their growth targets for this year, especially export-driven coastal areas.
He also said the China-US trade talks have made substantive progress on many issues of common concern, and both countries and the worldwide community have responded in a positive manner.
Separately, China's top banking regulator said on Tuesday Beijing could "absolutely" reach an agreement with the United States on opening up its financial sector, even as the country's commerce minister admitted talks with Washington had been hard.
But in signs that tensions from the tariff battle could soon ease, sources tell CNBC that the US and China are now in the "final stages" of a trade deal that could end this month.