INDIAN BUDGET 2022 – Highlights and Summary

Like, every year,
Financial Budget, The Budget 2022 is the hottest topic revolving around in the country. The aim is to cover a number of sectors, by promoting its growth in the midst of the rising pandemic, while focusing its major growth on infrastructure, digital economy, technology, climatic changes, investments, education, and health. The economic growth of the current year is estimated to be 9.2% GDP growth highest among all large economies. 

On 1^st of February, 2022 the Union and Finance Minister Smt. Nirmala Sitharaman addressed the nation by presenting the Union Budget in the parliament. The Union Budget laid its blueprint on ‘Amrit Kaal’, the 25-year long leadup to India at 100 from its 75 years of celebrating the Azadi ka Amrit Mahotsav. It is also to be informed that the vision of Atma Nirbhar Bharat, has proved to promote many potential entrepreneurs and has received a massive response from startups with the potential to create 60 lakh job opportunities. 

The budget expanded the CAPEX by 35.4% from Rs 5.54 lakh crore to Rs 7.50 lakh crore. 

PM Gati Shakthi

              The New budget has introduced us to another connecting pillar of New India, which is Pragati ki Gati, Bharat ki Shakti, which is a comprehensive master plan of seven engines to be encompassed that connects the existing and the planned initiatives to facilitate faster movement of goods and people. 

It also aims to mobilize through many unique ways to finance the public resources and guide the creation of economic zones. It also helps in removing the imbalances in connecting the mapping routes. It promises to further provide a better social infrastructure that includes schools, educational institutions, and hospitals.

The National Highways will be expanded by 25,000 km in FY22-23 and as a complement to the ‘Atma Nirbhar Bharat’, 2000 km will be brought under Kavach for capacity augmentation and safety purposes.  It additionally introduces 400 New Generation Vande Bharath Trains.

The value of the increase in the infra spend is unclear through PM Gati Shakti plan, unlike the clear 34.5% increase last year to Rs 5.5 lakh crore. 

Education Budget Plan

              The pandemic had an adverse effect on the education of the students and school children, and students from rural and backward classes almost lost 2 years of formal education.

The Finance Minister addressed this issue by imparting a resilient mechanism by expanding the PM eVIDYA from 12-200 Tv channels through the ‘One class – One TV channel’, and the same will be enabled in all the states in its regional languages, from class 1-12. 

2lakh Anganwadis to be upgraded to Saksham Anganwadis, for improving the health of the children.

Establishment of Digital University, with Universal Education and high-quality E-content digital teachers for online education with 750 virtual labs in Science and Mathematics.

The university will be set up using a hub and spoke model based on ITC formats, and will be made available in different languages, along with additional skill courses.

  MSME

       Accelerating the growth of MSME is a need of the hour in the midst of the pandemic. The Union Minister stressed the additional credit ‘Emergency Credit Line Guarantee Scheme’ (ECLGS) to more than 130 lakh MSMEs. To help the MSMEs regain their disproportionate levels of business, there will be an extension of ECLGS till March 2023 guaranteeing the expansion of 50,000 crore to 5 lakh crore being the total cover.

Interlinking portals like Udyam, e-Shram, NCS, and ASEEM and extending the focus of ECLGS on hospitality and as lending support to MSMEs.

Revamping ‘Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE), an incentive for banks to extend with additional credit of 2lakh crore.

Health

Launching of ‘National Tele Mental Health Programme’, to people of all ages with mental health problems, that enables them to have better access to quality on mental health counseling. 

Rolling of National Digital Health Ecosystem, that consists of digital registries of health providers and facilities, unique health identity, consent framework, and universal access to health facilities.

Employment

Production Linked Incentive Scheme for achieving Atma Nirbhar Bharat 60 lakh new jobs and additional production of 30lakh during the next keycap digit five years and has received tremendous response across 14 sectors.

Agriculture

The Finance Minister has confronted a need to promote chemical-free Natural farming throughout the country and promote funds for blended capital to finance for sunrise opportunities such as climatic actions, agro-technology. 

A focus on farmers lands in 5-km wide corridors along the river Ganga. Promoting better access and usage to Kisan Drones to aid farmers, recording of lands digitally and assessments of crops for better harvesting, spraying of insecticides and nutrients.

Reducing the dependence on imported seeds and facilitating funds through NABARD to finance startups for agricultural and rural enterprises, relevant for farm produce value chain.

Direct payment of 2.37 lakh crore of MSP to 163 lakh farmers to their bank accounts.

Delivery of digital and Hi-tech services for farmers, in PPP mode, is to be launched.

Ken Betwa Link project to be launched which benefits 9.1 lakh hectare farmland.

Digital Currency in india

RBI, on the proposal of the Government, will introduce a digital rupee using the ‘blockchain’ technology, starting 2022-23, for an efficient currency management system and boost the digital economy.

Virtual Banking in india

To mark 75 years of Independence, 75 Digital Banking Units were set up in 75 districts by Scheduled Commercial Banks to ensure the benefit reaches every citizen, enabling access to accounts through net banking, mobile banking, ATMs, and virtual transfer of funds.

An online bill system to be introduced to reduce the delay in payments which is to be used by all the Central Ministries, with end-to-end online e-bill systems.

Credit Growth is to be increased by Rs 5.4 lakh crore, this year. 

Defence

Promoting Defence -budget of 25% for industries, startups, and academia.

Reducing imports and promoting Atma Nirbhar Bharat in equipment for the armed forces.

68% capital procurement budget will be earmarked for the domestic industry in 2022-23, from 58% in 2021-22.

Electric Vehicles

 A battery swapping policy as an alternative to setting up charging stations in urban areas with interoperability standards that boosts the EV ecosystem. 

AVGC and Academic institutions

The Animation, Visual, Gaming, and Comic sectors play a vital role in employing the youth. Therefore, a promotion task will be enforced to set up the AVGC that creates a global demand while serving the needs of our market.

Establishing Centers of Excellence in Urban planning and design and delivering certified training to 5 existing academic institutions in different regions with an endowment of Rs 250 crore each.

Internet Connection and e-passports

 Required spectrum auctions will be held in 2022-23 and roll out 5G mobile services by private telecom providers to have better telecommunication access, and build a strong ecosystem that enables a smooth flow of internet connection, as a part of the Production Linked Incentive Scheme.

The issuance of chip embedded e-Passports, with futuristic tech that will be introduced in 2022-23 that enables the citizens to travel overseas at their convenience.

Income Tax – The Direct Tax

A new provision is to be implemented allowing the assesses to update the past returns and can include omitted income by paying additional tax. The updated income to be filed within 2 years for correcting errors and reduces Alternate Minimum Tax to 15% and surcharge for cooperatives to 7% from 12 %.

As an incentive for startups, the period of incorporation of eligible startups under 80-IAC has been extended by one year till March 31 and provides tax relief to disabled people.

Income that is earned from the transfer of digital assets such as crypto is to be taxed at 30 %.

The budget proposes better litigation management to avoid repetitive appeals. 

Increase in the threshold limit of employer’s contribution to the National Pension scheme to 14%.

Newly incorporated manufacturing units to be incentivized under concessional tax regime. 

Surcharge and cess on income and profits disallowed as business expenditure. 

Brought forward losses cannot be set off against undisclosed income. 

GST and Customs – The Indirect Tax

The gross GST collections hit the highest revenues in January 2022, with a record of Rs 1,38,394.

Customs Administration in Special Economic Zones to be fully IT-driven concessional customs duty on import of capital goods to be phased out, by imposing an initial rate of 7.5% tariff.

The budget stressed the customs exemptions and tariff simplification with more than 350 exemptions on importing of agro-based products, drugs, and chemicals to be phased out gradually. 

Rationalizing the exemptions on tools and techniques for the agriculture sector will be implemented in India.

Exemption of Customs duty on steel scrap to be extended by a year and unblended fuel to attract additional differential excise duty at Rs. 2.

Customs Duty on cut and polished diamonds and gems to be reduced to 5% and customs duty on methanol to be reduced. 

Customs Duty Rates calibrated to provide graded rate structure to facilitate domestic electronics manufacturing.

Fiscal Estimations and Allocation of Budget

The fiscal deficit in the financial year 2022-23 is estimated at 6.4% of the GDP and the revised fiscal deficit is estimated at 6.9% of GDP.

The estimated total expenditure in FY 2022-23 is Rs 39.45 lakh crore. 

Total receipts in the FY 2023, excluding borrowings, are estimated at Rs. 22. 84 lakh crores. 

The outlay for capital expenditure is to be extended by 35.4% from 4.54 lakh crore to Rs.7.50 lakh crore in 2022-23.

States to get Rs. 1 lakh crore as 50-year interest-free loans to help fund PM Gati Shakthi investments.