Finance minister Nirmala Sitharaman presented the Union Indian Budget 2022, the fourth budget of Modi 2.0, on Tuesday.
There were many measures for several sectors, aimed at boosting growth and managing high & rising inflation, and continuing Covid uncertainties.
Here are the highlights of the Budget session 2022.
Indian Budget Economy
- Capex target expanded by 35.4 percent — from Rs 5.54 lakh crore to Rs 7.50 lakh crore. FY23 effective Capex seen at Rs 10.7 lakh crore
- ECLGS cover expanded by Rs 50,000 to Rs 5 lakh crore
- PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of investments
- In 2022-23, states will be allowed a fiscal deficit of up to 4 percent of GDP
Expenditure and deficit & other key numbers
- Proposed fiscal deficit of 4.5% of GDP by 2025/26
- Projected fiscal deficit of 6.4% of GDP in 2022/23
- Revised fiscal deficit for 2021/22 at 6.9% of GDP
- 50-year interest-free loans over and above normal borrowing allowed for states
- Receipt from disinvestment proceeds in next financial year pegged at Rs 65,000 crore, lower than the current year’s mobilization of Rs 78,000 crore.
Taxes
- Govt vows a stable and predictable tax regime
- Govt to provide a one-time window to correct omissions in ITRs filed, updated returns to be filed within 2 years
- Any cess or surcharge on income is not allowed as business expenditure
- Gift of cryptocurrencies to be taxed at receiver’s end
- A new provision to allow taxpayers to file an updated return. Updated returns can be filed within 2 years from the end of the relevant assessment year.
- Alternate Minimum Tax for cooperative societies to be cut to 15%. The proposal will reduce the surcharge on cooperative societies to 7%, for those whose income is between Rs 1 crore and Rs 10 crore
Duties on Industry
- Import duty on certain chemicals being/to be cut
- Customs duty exemption on steel scrap will be extended for another year for MSMEs
- Will revoke customs duty on stainless steel, flat products, high steel bars
- Beginning October 2022, unblended fuel to get an additional duty of Rs 2/litre
- Import duty on cut and polished diamonds and gemstones to be cut 5 percent and on the sawn diamond to nil
- Customs duty concessions to be given to certain consumer electronic devices to promote manufacturing across wearables, wearables, and specific mobile phone components
Jobs
- ECLGS extended till March 2023, 60 lakh jobs will be released in next 5 years
- Efforts of central, state governments leading to jobs, entrepreneurial opportunities
- Digital ecosystem for skilling and livelihood to be launched.
- API based skill credentials, payment layers to find relevant jobs and opportunities
Infra & manufacturing
- Desh stack e-portal to be launched to promote digital infra
- Strategic transfer of ownership of Air India completed now
- Four multi-modal national parks contracts will be awarded in FY23
- PM Gatishakti masterplan for expressways will be formulated in the next financial year
- 100 PM Gati Shakti terminals to be set up in next three years.
Steps on digital currency
- Launch of blockchain-based digital rupee starting 2022-23
- To launch a scheme for the taxation of virtual digital assets
- Losses from the sale of virtual digital assets cannot be offset against other income
- Income from virtual digital assets to be taxed at 30%
Housing & urban planning
- Rs 48, 000 crores is allotted for PM Awas Yojana
- In 2022-23, 80 lakh houses will be completed for identified beneficiaries of PM Awas Yojana; 60,000 houses will be identified as beneficiaries for PM Awas Yojana in rural & urban areas
- 60,000 crore allocated for providing access to tap water to 3.8 crore households
- In 2022-23, 80 lakh households will be identified for the affordable housing scheme
- 5 existing academic institutions for urban planning to be designated as Centre for Excellence with an endowment fund of Rs 250 cr
- Modern building by-laws will be introduced
- A high-level panel to be set up for urban planning
- Govt to promote the use of public transport in urban areas
- Proposal to reduce Minimum Alternative Tax to 15 pc for co-op societies, at par with corporate
MSMES & startups
- Rs 6,000 crore program to rate MSMEs to be rolled out over 5 years
- MSMEs such as Udyam, e-shram, NCS & Aseem portals will be inter-linked, their scope will be widened
- They will now perform as portals with live organic databases providing G-C, B-C & B-B services such as credit facilitation, enhancing entrepreneurial opportunities
- A fund with blended capital raised under co-investment model facilitated through NABARD to finance startups in agriculture & rural enterprises for farm produce value chain
- Startups will be promoted for Drone Shakti
- PE/VC invested Rs 5.5 lakh crore in the startup, an expert committee will be set up to suggest measures to help attract investment
- Existing tax benefits for startups, which were offered redemption of taxes for 3 consecutive years, to be extended by 1 more year.
Finance & inclusion
- Rs 1 lakh crore financial assistance to states to be provided in 2022-23 to catalyze investments
- Proposed to introduce Digital Rupee by RBI using blockchain technology, starting 2022-23
- Measures will be taken to step up private capital in the infra sector
- Digital Rupee to be rolled out by 2023
- 100% of 1.5 lakh post offices will come on the core banking system, enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs, and also providing online transfer of funds between post office accounts and bank accounts
- This will be helpful especiallyAgriculture for farmers and senior citizens in rural areas, enabling interoperability, and financial inclusion.
- IBC amendments to enhance the efficiency of the resolution process
- Facilitate cross-border insolvency resolution
- 75 digital banks in 75 districts will be set up by scheduled commercial banks to encourage digital payments
- Payment of annuity and lump sum amount to the differently-abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardians attaining the age of sixty years
- Govt to pay Rs 2.37 lakh crore towards procurement of wheat and paddy under MSP operations
- 2022-23 has been announced as the International Year of Millets
- Railways will develop new products for small farmers and MSMEs
- A rationalized scheme to increase domestic oilseed production will be brought in to cut down imports
- Kisan Drones for crop assessment, land records, spraying of insecticides is expected to drive a wave of technology in the Agriculture sector
- Ken Betwa river linking project worth Rs 44,605 crore announced
- Draft DPRs for 5 river links have been finalized
- Finance startups to be incentives to aid rural enterprises
- Natural farming will be promoted along the Ganga river corridor
Electric Vehicles
- Battery swapping policy to allow EV charging stations for automobiles will be framed
- The private sector will be encouraged to create sustainable and innovative business models for battery and energy as a service, improving the efficiency in the EV ecosystem
Education & skilling
- States to be encouraged to revise syllabi of agricultural universities to meet needs of natural, zero-budget & organic farming, modern-day agriculture
- One class, one TV channel’ program of PM eVIDYA will be expanded from 12 to 200 TV channels
- This will enable all states to provide supplementary education in regional languages for classes 1 to 12
- Digital university to be set up to provide education; to be built on a hub and spoke model
- 1-Class-1-TV Channel to be implemented to provide supplementary education to children to make up for the loss of formal education due to Covid
- To launch National Skill Qualification Framework (NSQF) to cater to dynamic industry needs
Healthcare
- An open platform for the national digital health ecosystem will be rolled out
- It will consist of digital registries of health providers and health facilities, unique health identity, and universal access to health facilities
- 95 percent of 112 aspirational districts have made significant progress in health, infra
- For mental health counseling, a National Tele Mental Health Program will be launched
Women & Children
- Recognizing the importance of ‘Nari Shakti’, 3 schemes were launched to provide integrated development for women and children
- 2 lakh Anganwadis to be upgraded for improving child health
Ease of Business & living
- 75,000 compliances have been eliminated and 1,486 union laws repealed to make it easier for businesses
- India to launch the next phase of Ease of Doing Business EODB 2.0 and Ease of Living.
- Voluntary exit for corporates to be cut down to 6 months from 2 years
- Special Economic Zones Act to be replaced with new legislation
Climate & Net Zero
- Energy transition and action on climate to be the major priority for govt
- Risks of climate change are the strongest externalities for the world. Funds will be used for projects that will help reduce the carbon intensity of the economy
- Sovereign green bonds to be launched to fund green infrastructure, to be part of the government’s borrowing program in FY23
- Proceeds to be deployed in public sector projects
- Rs 19,500 cr additional allocation for PLI for manufacturing high-efficiency solar modules has been made
- Low carbon development strategy opens up employment opportunity
Travel
- ePassports will be rolled out in 2022-23 for convenience in overseas travel
- E-passport with the embedded chip will be rolled out