The administration will propose a record budget for next fiscal year of more than ¥96 trillion while also cutting borrowing for the third year in a row, as Prime Minister Shinzo Abe seeks to maintain growth while curbing the heaviest debt burden in the industrial world.

The third annual budget since Abe swept to power in late 2012 also highlights his struggle to contain exploding welfare costs in a fast-aging society while increasing discretionary spending in areas such as defense.

Abe's ¥96.3 trillion draft budget for fiscal 2015, which begins April 1, is up from this fiscal year's initial ¥95.9 trillion, two officials said Sunday.