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Union Budget 2022

Published on February 02, 2022
Current Context: The Union Finance Minister, Nirmala Sitharaman presented Union Budget 2022 for the consecutive 4th time.
Union Budget 2022
  • She presented the financial statements and tax proposals for the fiscal year 2022-23 i.e. from April 2022 to March 2023.
  • She mentioned that India will observe growth at 9.27%.
  • She highlighted that this Union Budget aims to develop the foundation and give a blueprint of the economy over ‘Amrit Kal’ of next 25 years i.e. from India at 75 to India at 100.
  • There will be PLI (Production Linked Incentive) schemes for 14 major sectors and it is expected to create 60 lakh new job opportunities and additional new production of Rs 30 lakh crore.
  • This union budget will also prove beneficial to the startups as the startups will be promoted to facilitate Drone Shakti and make drone a service. In this regard, ITI courses in various will be held.
  • The Emergency Credit Line Guarantee Scheme is extended upto March 2023 and the guaranteed cover is extended by another Rs 50,000 crore. Therefore, the total cover under the scheme becomes Rs 5 lakh crore.
  • She also announced that the Ken Betwa river linking project will be allocated funds of Rs 44,605 crore.
  • Around 75 digital banking units will be set up in 75 districts to support digital banking.
  • The North Eastern Council will work to develop welfare and upliftment initiatives in the North Eastern States. In this, livelihood and job opportunities for women and youth will be developed.
  • The issuance process of e-passports will commence in 2022-23. The passports will be having RFID and biometrics.
  • In 2022, 5G spectrum auctions will be conducted which will further launch various services in 2022-23.
  • An upliftment to the Animation, visual effects, gaming, and comics sector will be given and for this purpose, an AVGC promotion task force with all stakeholders will be set up.
  • The Special Economic Zones Act will be replaced with new legislation. This will develop enterprises and hubs in India.
  • The effective capital expenditure of the Central government will be Rs 10.68 lakh crore in 2022-23, which is 4.1% of GDP.
  • The funds of Rs 19,500 crore are sanctioned to facilitate domestic manufacturing of 280 gigawatts of installed solar capacity by 2030. The funds will be used to manufacture high-efficiency modules with the major focus on fully integrated manufacturing units to solar PV modules.
  • Digital rupee will be issued using blockchain and other technologies. RBI will issue the same at the start of 2022-23. Thus, there will be an introduction of central bank digital currency which will help the economy to grow fast.
  • Also, Rs 1 lakh crore is allocated to help the states to catalyze overall investments in the economy. These will be 50-year interest-free loans and will be used for PM Gati Shakti-related and other productive capital investments of states.
  • The announcement in Tax: A new tax rule for taxpayers was announced in which a taxpayer can file an updated return on payment of taxes within two years from the end of the relevant assessment year.
  • The tax deduction limit for both Centre and States govt employees was increased from 10% to 14%.
  • The income from Cryptocurrency will be charged with 30% tax, plus 1% tax on the transaction.
  • The current tax benefits applied on startups, are being given redemption of taxes for 3 consecutive years but are now to be extended by 1 more year.
  • The income coming from Long Term Capital Gains will have a tax of 15%.
  • Various duty concessions will be applied to enhance electronics manufacturing, wearables and hearables devices i.e. it will be applied on the parts of mobile phones.
  • The customs on polished diamonds, gemstones are reduced to 5% in which the sawn diamonds are exempted. In June, simplified regulations will be announced to have exported jewellery through e-commerce.
  • The deduction for employer contribution to NPS for State govt employees on par with central govt employees will be 14%. Earlier it was 10%.
  • An Alternate Minimum Tax for cooperative societies will be reduced to 15%.
  • There will reduction in the surcharge on cooperative societies. It will be to 7% from 12% for those having an income between Rs 1 crore and Rs 10 crore.
  • An unblended fuel will carry an additional duty of 2 rupees per litre from October 2022.
  • There is a reduction in surcharge on unlisted shares to 23% from 28.5%.
  • Announcement related to deficit and expenditure: (a) Proposed Fiscal deficit of 4.5% of GDP by 2025-26 (b) Expected Fiscal deficit of 6.4% of GDP in 2022-23 (c) Revised Fiscal deficit for 2021-22 at 6.9% of GDP. (d) The total expenditure for 2022-23 to be at 39.45 trillion rupees (e) States is allowed with 4% fiscal deficit to GDP in FY23 (f) Scheme for financial assistance to states for capital investment outlay to be 1 trillion rupees in 2022-23.
  • Around 1.5 lakh post offices are to be set up as a part of the core banking system. It will help to transfer funds between post office accounts and bank accounts in an online manner, enable financial inclusion, access to net banking, ATMs facilities.
  • The fiscal deficit target for FY23 is set at 6.4%. the total expenditure for FY23 will be Rs 39.45 lakh crore.
  • Total receipts except borrowing will be Rs 22.84 lakh crore.
  • The revised fiscal deficit in FY22 is 6.9% of GDP as against 6.8% in Budget estimates.
  • The National telehealth program was also announced. It will be an open platform for the National Digital Health Ecosystem. It will have digital registrations of health providers and health facilities. A unique health identity will be generated and it will have access to various health facilities.
  • The announcement in the Education sector: There will be a revision of the syllabus of agricultural universities to fulfill the need for natural, zero-budget organic farming, modern-day agriculture. Also, PM eVIDYA will work to launch a One class, one TV channel’ program, which will be extended to 200 TV channels from currently 12.
  • The announcement in the Indian Railways sector and Roads sector: Around 25,000 km of national highways to be built in 2022-23. Around, 400 new-generation Vande Bharat trains will be developed and launched in the next three years. Also, 2,000 km of the rail network will be developed under KAWACH, which is an indigenous world-class technology to enhance safety.
  • Announcement for Indian Farmers Community: The procurement of wheat in Rabi season 2021-22 and the procurement of paddy in Kharif season 2021-22 will cover 1,208 lakh metric tonnes of wheat and paddy from 163 lakh farmers and there will be direct payment of MSP value to their accounts of worth Rs 2.37 lakh crores.
  • States should promote Chemical-free natural farming and must implement the usage of drones for crop assessment, maintaining digitized land records, spraying insecticides and nutrients, etc.
  • NABARD will also support by allocating funds to the startups dealing in agriculture and rural enterprise domains.
  • The announcement in the Infrastructure sector: Around 80 lakh houses will be built under PM Awas Yojana. 60,000 houses will be identified as beneficiaries for PM Awas Yojana in rural and urban areas.
  • The tap water to 3.8 crore households will be provided with the allocation of funds of Rs 60,000 crore. In 2022-23, 80 lakh households will be identified for the affordable housing scheme.
  • The announcement in the Defence sector: 68% of the capital procurement budget for Defence was announced, which will promote domestic industries under the Aatmanirbharta initiative. This will reduce the country’s dependence on imports of defense equipment. The 25% of the defence budget will be used to perform R&D in defence through industry, startups, and academia.
  • The National Ropeways Development Program was announced. It will be executed on PPP mode. The contracts will be given for 8 ropeway projects of 60 Km length in 2022-23.
  • The Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched which will empower youths via online training sessions.
  • The startups will be promoted to have ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).
  • The amount of Rs 200 crore will be used as development assistance to Afghanistan and Rs 100 crore for the Chabahar port project.
  • The funds of Rs 17,250 crore are sanctioned to External Affairs Ministry for the next fiscal year from which Rs 6292 crore will be used as development assistance to India’s neighborhood nations and Africa and Latin America.
  • For Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS), the allocation of funds is retained at Rs 73,000 crore for the next fiscal year.
  • Ministry of Home Affairs (MHA) was allocated more than Rs 1.85 lakh crore which is over 11% higher than the allocation of Rs 1.66 lakh crore in the last budget for the current fiscal.
  • The Battery swapping policy will be introduced to promote electric vehicles.
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