Union Budget 2022 Highlights – Economy, Digital assets, Infrastructure and more

Amidst the unpredictable COVID scenario, difficult past and an anxious future, Finance Minister Nirmala Sitharaman presented the much-awaited and extremely hopeful Union Budget for the financial year 2022 – 2023, today i.e. 1st February 2022.

Presented for approx. one hour and thirty minutes, the duration of the Budget presentation seemed extremely short compared to the long list of expectations that the people had with it. Especially, after the economic impact due to the pandemic.

Considering India’s one of the highest numbers of vaccinations in the world, the Finance Minister showed confidence in our country’s ability to maintain a strong stance against the pandemic. This strong position clearly reflects in the estimated growth rate of 9.2%, which is the highest amongst all the large economies in the world.

The Finance Minister said that the Budget for 2022 – 2023 along with the upcoming fiscal year will not only drive the country’s economy out of the slump caused due to the pandemic but also accelerate the growth of our country.

Along with all the measures to strengthen the economy, this Budget also focuses on investment, infrastructure and growth. And the Prime Highlights of the Union Budget 2022 – 2023 undoubtedly validates it.

ECONOMY

Keeping the economical growth in mind, the CAPEX target is expanded by 35.4 per cent — from Rs 5.54 lakh crore to Rs 7.50 lakh crore. In the upcoming fiscal year FY23, capes is believed to grow up to Rs. 10.7 lakh crore.

Keeping in mind the growth in the digital economy and fintech, tech-enabled development, energy transition and climate action, the economy is estimated to achieve the desired growth using a combination of macro and micro sectors, wherein the growth of micro sectors will complement the macro growth.

The Emergency Credit Line Guarantee Scheme i.e. the ECLGS cover is increased from Rs. 50,000 to Rs. 5 Lakh Crores.

The top focus of the Budget this year are: PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of investments

The Productivity Linked Incentive Schemes i.e. the government’s initiative to promote domestic manufacturing has successfully received investment intentions worth Rs 30 Lakh Crore in 14 different sectors.  

TAXES

The section looked up by an extensive population of our country, especially the common people got updates like;

• The government will tax income from digital asset transfers at 30%.
• No deduction is allowed while computing income except the cost of acquisition.
• Loss cannot be set off from any other income.
• The gift of cryptocurrencies to be taxed at the 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.
• Tax deduction limit increased to 14% on employers contribution to NPS account of state govt employees.

JOBS

In order to increase the level of employment and create more local job opportunities, the government will be focusing on;

• Extending the ECLGS till March 2023 in order to create 60 lakh jobs in the next 5 years.
• Increasing the efforts of central, state governments to create more jobs and entrepreneurial opportunities.
• Launching a Digital Ecosystem for skilling and livelihood by skilling, reskilling and upskilling the citizens via online training.
• Introducing API based skill credentials, payment layers to find relevant jobs and opportunities.
• Creating more jobs and opportunities for the youth via the PM Gati Shakti.

INFRASTRUCTURE

Keeping the aim to extensively develop the infrastructure of our country at the top of the priority list, the Union Budget 2022-23 emphasised on;

• Expanding the National Highway network by 25,000 kms during FY 22-23
• Launching the Desh Stack e-portal to promote digital infra
• 2,000 kms of roads to be brought under Kavach by FY 22-23
• Giving four multi-modal national parks contracts FY23
• Popularising the ‘One Product One Railway Station’ and introducing 400 new Vande Bharat trains.
• Formulating the PM Gatishakti Masterplan for expressways in the next financial year.
• Setting up 100 PM Gati Shakti terminals in the next three years.
• Focusing on public investment to modernise infrastructure over the medium term, leveraging the tech platform of Gati Shakti via a multi-modal approach.

HOUSING & URBAN PLANNING

Considering the increasing cost of homes built by the private construction companies across the country and in order provide the basic need of ‘Shelter’ to an extensive population of our country, the Budget included;

• Allocation of Rs 48, 000 Crore for the PM Awas Yojana.
• Completing the construction of 80 lakh houses of the identified beneficiaries of PM Awas Yojana and identifying new beneficiaries for 60,000 houses under the PM Awas Yojana in rural & urban areas in In 2022-23.
• Allocating 60,000 Crore for providing access to tap water to 3.8 crore households.
• Identifying 80 lakh households in 2022-23 to get the benefit of the affordable housing scheme.
• Forming a high-level committee for urban planners and economists for recommendations on urban capacity building, planning implementation, and governance.
• Designating 5 existing academic institutions for urban planning as Centre for Excellence with an endowment fund of Rs 250 Crores.
• Introducing modern building by-laws.
• Setting up a high-level panel for urban planning.
• Promoting the use of public transport in urban areas.

MSMEs & STARTUPS

Focusing on Make In India and Startup India, the Budget of 2022-23 effectively included;

• Rs 6,000 crore programme to rate MSMEs to be rolled out over 5 years.
• Interlinking of MSMEs such as Udyam, e-shram, NCS & Aseem portals in order to widen their scope and enable them to 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 the co-investment model facilitated through NABARD to finance startups in agriculture & rural enterprises for farm produce value chain.
• Promotion of startups for Drone Shakti.
• Investing Rs 5.5 lakh crore by PE/VC in startups.
• Setting up an expert committee to suggest measures to help attract investment.

AGRICULTURE

Considered to be the backbone of the Indian economy and the biggest exporting sector in India, the Agricultural sector undoubtedly got the following perks in the Union Budget;

• 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 rationalised 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 Agri sector.
• Ken Betwa river linking project worth Rs 44,605 crore announced.
• Draft DPRs for 5 river links have been finalised.
• Finance startups to be incentives to aid rural enterprises.
• Natural farming will be promoted along the Ganga river corridor.
• A completely paperless, e-bill system will be launched by ministries for procurement.
• Financial support will be provided to farmers to take up agro-forestry.

ELECTRIC VEHICLES

Considering to be the future of road transport across the globe, the Budget of 2022-2023 has given the EV sector some amazing benefits like;

• Framing the battery swapping policies for EV charging stations.
• Encouraging the private sector to create sustainable and innovative business models for battery and energy as a service, improving the efficiency in the EV ecosystem.

EDUCATION

Keeping in mind that education is the base of the future of our country as well as the world, the Budget has the following allocations for the betterment of the education sector;

• Encouraging the states to revise the syllabus of agricultural universities to meet the needs of natural, zero-Budget & organic farming, modern-day agriculture.
• Expanding the ‘One Class, One TV Channel’ program of PM eVIDYA from 12 to 200 TV channels.
• Enabling all the states to provide supplementary education in regional languages for classes 1 to 12.
• Setting up Digital University on the hub and spoke model to provide education.

FINANCE AND INCLUSION

The current boom of FinTech, Finance and Investment industry in India definitely convinced Finance Minister Nirmala Sitharaman to include the following allocations for the finance industry in the Budget of 2022-23;

• Providing financial assistance of Rs. 1 lakh crore to states in 2022-23 to catalyse investments.
• Proposing the introduction of Digital Rupee by RBI using blockchain technology, starting 2022-23.
• Taking the required measures to step up private capital in the infrastructure sector.
• Bringing in 100% of 1.5 lakh post offices 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 in order to especially help the farmers and senior citizens in rural areas to increase their interoperability, and financial inclusion.
• Amending IBC to enhance the efficiency of the resolution process.
• Facilitating cross-border insolvency resolution.
• Speeding up voluntary winding up of companies.
• Setting up 75 digital banks in 75 districts by scheduled commercial banks to encourage digital payments.
• Setting up an international arbitration centre in GIFT city to provide faster dispute resolution.
• Allowing a world-class university in GIFT IFSC free from domestic regulation.

HEALTHCARE

Prioritising the Aarogya of the Indian citizens and in order to ensure our best health for a healthy future of our country, Finance Minister Nirmala Sitharam’s Budget includes healthcare benefits like;

• Rolling out an open platform for the national digital health ecosystem that consists of digital registries of health providers and health facilities, unique health identity and universal access to health facilities.
• Launching a National Tele Mental Health Program to promote mental health counselling.

TELECOM

While 5G services have already been launched in several countries, the allocations in the Budget of 2022-2023 seem to be clearing the way to launch the 5G services in India very soon.

• Conducting the spectrum auction in 2022 for the rollout of 5G.
• Launching a scheme for design-led manufacturing for 5G ecosystem as part of PLI scheme to enable affordable broadband and mobile communication in rural and remote areas.
• Providing 5 pc of USO Fund for R&D and technology upgradation.
• Awarding the contracts for laying optical fibre in villages under BharatNet project under PPP in 2022-23
• Giving infrastructure status to the data centre and energy storage system and moving to provide easy financing.

WOMEN & CHILDREN

Recognising the importance of ‘Nari Shakti’ and Child Development, Finance Minister Nirmala Sitharaman launched 3 schemes to provide integrated development for women and children along with introducing the initiative to upgrade 2 lakh Anganwadis for improving child health.

EASE OF BUSINESS

Promoting the idea of entrepreneurship, the Budget of 2022-2023 includes several benefits that facilitate ease of business to several new as well as old business professionals and institutions.

• Eliminating 75,000 compliances and repealing 1,486 Union laws to make it easier for businesses.
• Cutting down the time period from 2 years to 6 months for corporate’s voluntary exit.
• Launching ‘Ease Of Living’ as the next phase of ease of doing business.

DEFENCE

Amidst the current scenario of increasing cases of infiltration and flexing military muscles by the neighbouring countries, the Budget of 2022-2023 has rightly focused on allocating the required amount of resources to strengthen the defence of our country;

• Committing to reducing imports and promoting self-reliance in the defence sector.
• Earmarking 68 per cent of capital for the defence sector for the local industry.
• Opening the defence R&D for industries, startups and academia with 25% of defence R&D Budget.
• Encouraging the private industry to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.

RAILWAYS

Being the fourth-largest railway network in the world, the highest employer in India and the backbone of India’s transport system, the Budget of 2022-23 gifts the following allocations to the Indian Railways;

• Manufacturing 400 new generation Vande Bharat trains in the next 3 years.
• Bringing 2,000 km of the rail network under indigenous technology KAWACH for safety and capacity augmentation.

CLIMATE & NET ZERO

Being an active part in the list of countries promoting the prevention of climate change across the globe, India will be taking the following initiatives in the year 2022-23 in order to build a better tomorrow;

• Allocating the funds and using the allocated funds for projects focusing on reducing the carbon intensity of the economy.
• Making the Sovereign Green Bonds, the government’s borrowing programme in FY23.
• Deploying the proceeds in public sector projects.
• Setting up 4 pilot projects for coal gasification.
• Allocating Rs. 19,500 cr for PLI for manufacturing high-efficiency solar modules.
• Introducing the low carbon development strategy in order to further open up employment opportunities.

TRAVEL

Once again getting ready to welcome the visitors from across the globe and enabling our citizens to visit their desired destinations with ultimate ease and safety, the Budget for the travel sector especially focuses on;

• Rolling out ePassports with the embedded chip will be in 2022-23 for convenience in overseas travel.

Somewhere hitting the bullseye and somewhere missing out on the expectations, these were the key highlights of the Union Budget 2022-2023 India for you.

Whether you overall like the Budget or wish that there would be some more inclusion, let us know by commenting below.

In case you need any clarity about the changes in your financial planning or tax planning post this Budget, feel free to get in touch with our Financial Experts at Online@fintoo.in.

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