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“India’s economic growth in the current year is estimated to be 9.2 per cent, highest among all large economies. The overall, sharp rebound and recovery of the economy from the adverse effects of the pandemic is reflective of our country’s strong resilience.” This was stated by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman while presenting the Union Budget in Parliament on 01 February, 2022.
The Finance Minister said, India is celebrating ‘Azadi ka Amrit Mahotsav’ and it has entered into ‘Amrit Kaal’, the 25-year-long leadup to India@100, the government aims to attain the vision of Prime Minister outlined in his Independence Day address and they are:
Complementing the macro-economic level growth focus with a micro-economic level all-inclusive welfare focus, Promoting digital economy & fintech, technology enabled development, energy transition, and climate action, and Relying on virtuous cycle starting from private investment with public capital investment helping to crowd-in private investment.
Since 2014, the government’s focus has been on empowerment of citizens, especially the poor and the marginalized and measures have been taken to provide housing, electricity, cooking gas, and access to water. The government also have programmes for ensuring financial inclusion and direct benefit transfers and a commitment to strengthen the abilities of poor to tap all opportunities.
The Finance Minister informed that the Productivity Linked Incentive in 14 sectors for achieving the vision of AtmaNirbhar Bharat has received excellent response, with potential to create 60 lakh new jobs, and an additional production of Rs 30 lakh crore during next 5 years. Dwelling on the issue of implementation of the new Public Sector Enterprise policy, She said, the strategic transfer of ownership of Air India has been completed, the strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected, the public issue of the LIC is expected shortly and others too are in the process for 2022-23.
PM GATI SHAKTI
Smt. Nirmala Sitharaman emphasized that this Budget continues to provide impetus for growth. It lays a parallel track of
(1) a blueprint for the Amrit Kaal, which is futuristic and inclusive, which will directly benefit our youth, women, farmers, the Scheduled Castes and the Scheduled Tribes, and,
(2) big public investment for modern infrastructure, readying for India at 100 and this shall be guided by PM GatiShakti and be benefited by the synergy of multi-modal approach. Moving forward, on this parallel track, she outlined the following four priorities:
–PM GatiShakti
–Inclusive Development
–Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition, and Climate Action
–Financing of Investments.
RAILWAYS
In Railways, the Finance Minister said that ‘One Station-One Product’ concept will be popularized to help local businesses & supply chains. Moreover, as a 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 2022-23. She also informed that four hundred new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured and one hundred PM GatiShakti Cargo Terminals for multimodal logistics facilities will be set up during the next three years.
AGRICULTURE
On Agriculture front, the Finance Minister informed that Chemical-free Natural Farming will be promoted throughout the country, with a focus on farmers’ lands in 5-km wide corridors along river Ganga, at the first stage. Use of ‘Kisan Drones’ will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients. She said, to reduce dependence on import of oilseeds, a rationalised and comprehensive scheme to increase domestic production of oilseeds will be implemented.
As 2023 has been announced as the ‘International Year of Millets’, the government announced full support for post-harvest value addition, enhancing domestic consumption, and for branding millet products nationally and internationally.
Smt. Nirmala Sitharaman said, implementation of the Ken-Betwa Link Project, at an estimated cost of Rs 44,605 crore will be taken up aimed at providing irrigation benefits to 9.08 lakh hectare of farmers’ lands, drinking water supply for 62 lakh people, 103 MW of Hydro, and 27 MW of solar power. Allocations of Rs 4,300 crore in RE 2021-22 and Rs 1,400 crore in 2022-23 have been made for this project. Moreover, Draft DPRs of five river links, namely Damanganga-Pinjal, Par-TapiNarmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been finalized and once a consensus is reached among the beneficiary states, the Centre will provide support for implementation.
MSMEs
The Finance Minister underlined that the Emergency Credit Line Guarantee Scheme (ECLGS) has provided much-needed additional credit to more than 130 lakh MSMEs to help them mitigate the adverse impact of the pandemic. She however added that the hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business and after considering these aspects, the ECLGS will be extended up to March 2023. She informed that its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.
SKILL DEVELOPMENT AND QUALITY EDUCATION
Dwelling on the subject of Skill development and Quality Education, the Finance Minister said that Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS). In select ITIs, in all states, the required courses for skilling will be started. In vocational courses, to promote crucial critical thinking skills, to give space for creativity, 750 virtual labs in science and mathematics, and 75 skilling e-labs for simulated learning environment, will be set-up in 2022-23.
A Digital University will be established to provide access to students across the country for world-class quality universal education with personalized learning experience at their doorsteps. This will be made available in different Indian languages and ICT formats. The University will be built on a networked hub-spoke model, with the hub building cutting edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hub-spokes.
HEALTH
Under Ayushman Bharat Digital Mission, an open platform for the National Digital Health Ecosystem will be rolled out and it will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.
Har Ghar, Nal Se Jal
Smt Nirmala Sitharaman announced an allocation of Rs 60,000 crore to cover 3.8 crore households in 2022-23 for Har Ghar, Nal Se Jal. Current coverage is 8.7 crores and of this 5.5 crore households were provided tap water in last 2 years itself.
PM Awas Yojana
Similarly, in 2022-23, 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban and Rs 48,000 crore is allocated for this purpose.
DEVELOPMENT INITIATIVE FOR NORTH-EAST
A new scheme, Prime Minister’s Development Initiative for NorthEast, PM-DevINE, will be implemented through the North-Eastern Council to fund infrastructure, in the spirit of PM GatiShakti, and social development projects based on felt needs of the North-East. An initial allocation of Rs 1500 crore will enable livelihood activities for youth and women, filling the gaps in various sectors.
BANKING AND FINANCE
In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through 11 net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts. This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion.
To mark 75 years of independence, the government has proposed to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks to ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner.
DEFENCE
On the Defence front, the Government remain’s committed to reducing imports and promoting AtmaNirbharta in equipment for the Armed Forces. 68 per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22. Defence R&D will be opened up for industry, startups and academia with 25 per cent of defence R&D budget earmarked.
Referring to Sunrise Opportunities, the Finance Minister said, Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country. They provide employment opportunities for youth, and make Indian industry more efficient and competitive.
To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of RS 19,500 crore for Production Linked Incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.
Fiscal Deficit
Concluding the Part A of her Budget speech, the Finance Minister said that the revised Fiscal Deficit in the current year is estimated at 6.9 per cent of GDP as against 6.8 per cent projected in the Budget Estimates. The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by her last year to reach a fiscal deficit level below 4.5 per cent by 2025-26. While setting the fiscal deficit level in 2022-23, she called for nurturing growth, through public investment, to become stronger and sustainable.
The Union Budget 2022-23, while continuing with the declared policy of stable and predictable tax regime, intends to bring more reforms that will take ahead the vision to establish a trustworthy tax regime. Smt. Nirmala Sitharaman said that proposals relating to taxes and duties will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation.
TAX
On the Direct Tax side, the budget allows taxpayers to file updated income tax return within 2 years for correcting errors. It also provides tax relief to persons with disability. The budget also reduces Alternate minimum tax rate and surcharge for cooperatives. As an incentive for startups, period of incorporation of eligible startups has been extended by one more year. The budget proposes to increase tax deduction limit on employer’s contribution to NPS account of state government employees to bring parity with central government employees. Newly incorporated manufacturing entities will be incentivized under concessional tax regime. Income from transfer of virtual assets will be taxed at 30%. The budget proposes better litigation management to avoid repetitive appeals.
On the Indirect tax side, the Union budget says that Customs administration in Special Economic Zones will be fully IT driven. It provides for phasing out of concessional rates in capital goods and project imports gradually and apply a moderate tariff of 7.5%. The budget underlines review of customs exemptions and tariff simplification, with more than 350 exemptions proposed to be gradually phased out. It proposes that customs duty rates will be calibrated.
BUDGET WILL BUILD A STRONGER, PROSPEROUS AND CONFIDENT INDIA : RAJNATH SINGH
Congratulating the Finance Minister Smt Nirmal Sitharaman for presenting an excellent Union Budget for 2022-23, Union Defence Minister Shri Rajnath Singh said, “It is a Budget which would give fillip to ‘Make in India’, boost demand and build capacities for a stronger, prosperous and confident India”.
The Budget outlines the Government’s focus on Atamnirbharata and Prime Minister Shri Narendra Modi’s vision for development and pro people reforms. It is a growth oriented Budget focused on harnessing the energies of New India.
Substantial amounts have been allocated towards Research and Development in several sectors including Defence. The proposal to reserve 25 percent of the R&D Budget for Startups and Private entities is an excellent move.
This year’s Budget has increased the total outlay for effective capital expenditure by a massive 35.4 percent to more than 10.6 lakh crores with the bulk of the money going into the development of social and physical infrastructure in the country.
The 68 percent of defence capital procurement budget has been allocated towards local procurement. It is in line with the ‘Vocal for Local’ push and it will certainly boost the domestic defence industries.
Budget will make India ‘Atmanirbhar’: AMIT SHAH
Thanking Hon’ble Prime Minister Shri Narendra Modi and Finance Minister Smt. Nirmala Sitharaman on Union Budget 2022-23 Union Home & Co-operation Minister Shri Amit Shah said the Union Budget presented by Modi Government in Parliament is a visionary budget which is going to change the scale of the Indian economy in the years to come. This Budget will not only make India an ‘Atmanirbhar’ (self-reliant) country, but will also lay a strong foundation of a ‘New India’ as we move towards the 100th year of our Independence.
He said the scale of expenditure in our Budget has been scaled up to Rs 39.45 lakh crores, and it shows strong growth, strength and resilience of the Indian economy even in the trying times of the Corona pandemic. The target of reducing the fiscal deficit from 6.9% to 6.4% is also a remarkable achievement. Today, PM Shri Narendra Modi has taken a strong and important step by reducing AMT rate in the cooperative sector from 18.5% to 15% and surcharge from 12% to 7%, thus ending discrimination against the cooperative sector and bringing it at par with other sectors.
Zero budget agriculture, natural farming, river linking, ‘One station – One product’ and Kisan drone are some of key initiatives announced in the Union Budget that will give a big boost to the agriculture sector, modernize our agriculture, make our farmers self-reliant and empowered.