Union Budget 2022: The Key Takeaways

Finance minister Smt. Nirmala Sitharaman presented the Union Budget for 2022-23 on February 01 with the focus on fast-tracking the economy, providing opportunities to businesses and potentially creating 6 million new jobs. Agriculture, healthcare, small businesses and infrastructure also featured prominently in the proposals.

Finance Minister Nirmala Sitharaman says chemical-free natural farming to be promoted across the country. Farm procurement value for FY23 is expected to be Rs 2.37 trillion.

The Major Announcements in Budget 2022:

1-Fiscal Deficit Target:

The country’s total expenditure is estimated at Rs 39.45 lakh crore in FY23, while receipts other than borrowings are estimated at Rs 22.84 lakh crore. The fiscal deficit for FY23 is projected at 6.4 percent of GDP.

2-Updating Returns:

Taxpayers now have an opportunity to correct errors and file updated returns within two years of the relevant assessment year.-Tax deduction limit: The tax deduction limit for state government employees on the employer’s contribution to the National Pension System will be increased to 14 percent from 10 percent to bring them at par with Central government employees.

3- LTCG:

The surcharge on long-term capital gains arising from the transfer of any type of asset will be capped at 15 percent.

4-Digital Assets:

Any income from the transfer of any virtual digital asset will be taxed at 30 percent. Tax must be deducted at source on the payment made in relation to transfer of a virtual digital asset at 1 percent of such consideration above a monetary threshold.

5-Digital Rupee:

The Reserve Bank of India will issue a digital currency based on blockchain and other technology starting in FY23. “Introduction of Central Bank Digital Currency will give a big boost to digital economy,” the finance minister said.

6-5G Rollout:

Spectrum auctions will be conducted in 2022 to facilitate the rollout of 5G mobile services by private telecom companies.

7-Digital Education:

With children having lost almost two years of formal education due to the pandemic, the ‘One Class-One TV Channel’ programme 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. A Digital University will be set up to provide world-class quality universal education with personalised learning experience. This will be available in different Indian languages and ICT formats.

8-Animation and gaming: 

Animation, visual effects, gaming and comics (AVGC) offer immense potential to employ youth. An AVGC promotion taskforce will be set up to recommend ways to realise this and build domestic capacity to serve the domestic markets and global demand.

9-E-Passports:

E-passports using embedded chips and futuristic technology will start rolling out in FY23 to make overseas travel more convenient.

10-Paperless e-Bill System:

A completely paperless, end-to-end online e-bill system will be started for use by all central ministries for their procurements as a further step to enhance transparency and to reduce delays in payments.

11-Post Office Banking:

All 150,000 post offices in the country will become part of the core banking system, enabling access to accounts through internet banking, mobile banking and ATMs and also allowing online transfers between post offices and bank accounts. This will help farmers and senior citizens in rural areas, enabling interoperability and financial inclusion.

12-Housing:

The government will allocate Rs 48,000 crore for PM Awas Yojana and complete 8 million houses for the scheme’s identified and eligible beneficiaries in rural and urban areas in FY23.

13-Natural Farming, Kisan Drones:

Chemical-free natural farming will be promoted across the country, with the focus on agricultural land along the River Ganga in the first stage.

The procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will add Rs 2.37 lakh crore in direct payment of minimum support prices to farmers’ accounts. Use of kisan drones will be promoted for crop assessment, digitisation of land records and spraying of insecticides and nutrients.

14-Defence:

To reduce imports and promote AtmaNirbharta in equipment for the armed forces, 68 percent of the capital procurement budget will be earmarked for the domestic defence industry. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with the Defence Research and Development Organisation and other entities.

15-Mental Health Programme:

With the pandemic accentuating mental health problems in people of all ages, a National Tele Mental Health programme will be started to improve access to quality mental health counselling and care services.

16-SEZ Act:

The Special Economic Zones Act will be replaced with new legislation that will allow states to become partners in developing enterprise and service hubs. This will cover all large existing and new industrial enclaves to optimally utilise infrastructure and enhance export competitiveness.

17-Financial Assistance to States for Capital Investment:

The outlay for the ‘Scheme for Financial Assistance to States for Capital Investment’ is being increased to Rs 1 lakh crore in FY23, up from Rs 15,000 crore in the revised estimate for the current year, to assist the states in catalysing overall investments in the economy. These 50-year interest-free loans are over and above the normal borrowings allowed to states and the allocation will be used for PM Gati Shakti-related and other productive capital investments.

18-Rail Network:

As part of Atmanirbhar Bharat, 2,000 km of network will be brought under Kavach, the indigenous, world-class technology for safety and capacity augmentation, in FY23.

19- Vande Bharat Trains:

400 new-generation Vande Bharat trains are to be built over the next three years.

20-Gati Shakti Master Plan:

The PM Gati Shakti National Master Plan is driven by seven engines: roads, railways, airports, ports, mass transport, waterways and logistics infrastructure, which will pull forward the economy in unison. The Gati Shakti Master Plan for expressways is to be drawn up in FY23 and 100 new cargo terminals will be built over the next three years. The national highway network will be expanded by 25,000 km in FY23.

21-EV Battery-Swapping Policy:

Acknowledging the constraint of space in urban areas for setting up charging stations for electric vehicles, the finance minister proposed to introduce a battery-swapping policy and frame inter-operability standards. The private sector would be encouraged to develop sustainable and innovative business models for battery- or energy-as-a-service.