The Highlights of Union Budget 2022-2023

1 Feb 2022  Read 2236 Views

Urban Development, Hardcore Digitalization, Sustainable living, Paperless Economy, Artificial Intelligence, and record GST collections. That’s it, my friend, we are talking about the Union Budget 2022-2023 which has been announced by the Honourable Finance Minister. 

“The overall sharp rebound and recovery of the economy are reflective of our countries strong resilience. India’s economic growth in the current year is estimated to be 9.2%, highest among all large economies.” - Nirmala Sitharaman

So, the overall Indian economy is expected to grow but can the union budget cater to the high expectations of the common man or not? Let's find out! 

Sector-wise update

India’s growth is highest among the major economies and the new budget is expected to add more to this. In a nutshell, the Union Budget had 4 priorities, PM GatiShakti, Inclusive development, Financing of investment & Productivity enhancement and investment.

Yes, we understood what the key focus of the budget is, before moving forward let us take a look at the government's earnings & spending bifurcation for 2022. 

To understand it better, take a look at the Budget profile


 

Source: Indiabudget.gov.in

Without waiting any further let’s take a look at sector-wise changes the budget will bring. 

Transportation & Railways

Total Allocation: Railways- 1.4 Lakh Crore. 

As far as railways are concerned, 400 new generation Vande Bharat trains are to be manufactured in the span of 3 years. Along with this, KAWACH, an indigenous technology for safety & capacity augmentation will ensure the development of 2000 Km of the rail network. Also, the National highways network are to be expanded by 25,000 km in 2022-2023. 

Agriculture

One of the key sectors for the overall development of the Indian economy is Agriculture, under this, financial support will be provided to farmers to take up agro-forestry. One of the main focuses of the government is to go paperless and for this, a completely paperless e-bill system will be launched. To cater to the financial needs of agro startups a fund under a co-investment model will be facilitated through NABARD. To boost sustainability chemical-free natural farming will be promoted throughout the country along with promoting natural farming throughout the Ganga river corridor.

Millets have become a crop of great importance for the year 2022-2023 as it will be regarded as the international year of Millets.  

MSME & Startups

In the next 5 years, a Rs. 6000 crore programme to rate MSMEs will be rolled out. For startups, an expert committee will be set up to attract attractive investments from VC & PE. Also, the existing tax benefit for startups that offered redemption on taxes for 3 years in a row is to be extended by one more year. 

Education

As far as education is concerned, the government is all set to make it as digital as possible and for that digital universities are to be set up to provide a better reach of learning for the students also, High-quality e-content will be delivered.

 Also, to promote education in the regional language, one class, one TV channel program of PM eVIDYA is planned to expand from 12 to 200 TV channels. The government will launch the National skill qualification framework (NSQF) to cater to the needs of the industry. Virtual labs and skilling e-labs are to be established to promote critical thinking skills. 
For Skill development, online training will be promoted and for this digital ecosystem for skilling and livelihood (DESH-Stack e-portal) will be launched. To promote drones as a service, Startups will be promoted to facilitate drone shakti. 

Housing & Urban Planning

For PM Awas Yojana, Rs. 48,000 Crore will be allotted in which 80 Lakh houses will be completed for identified beneficiaries this year. 

Telecom Sector
The biggest announcement under this was that the government will be rolling the 5G spectrum this year. Also, the allocation to BSNL, has increased to RS. 44,720 Cr. 
The government will also award contracts for laying optic fibre in all villages through public-private partnership in FY23. 

Defence
The total expenditure on defence will be 525166.15 Cr. The government aims to reduce the dependence on imports of defence equipment. Defence R & D will be open for industry & startups. Thus, private players can work with the development of military platforms along with DRDO. 

Healthcare
According to government announcements, National Digital healthcare system will be rolled out. FM showed concern about mental health, thus, National Tele Mental Health Programme will be launched for quality counselling. 
The programs they are expecting to launch are: Mission Shakti, Mission Vatsalya, Saksham Anganwadi & Poshan 2.0 will be launched. 

Tax Proposals

Updated returns; Now taxpayers can correct errors within two years from the end of the relevant assessment year of filing returns. Also, the tax exemption limit on the employer’s contribution to NPS account on the state government employees will be increased.

Tax relief will be provided to people with disabilities, and for cooperatives, the alternate minimum tax rate and surcharge will be reduced.

If you transact in virtual assets such as cryptocurrency you will be liable to pay 30% tax on the gains. Also, the government will reduce red-tapism by managing litigation better to avoid repetitive appeals. The surcharge on Long term capital gain will be capped at 15%.  

Allocations

Moving forward lets take a look at the allocations the government will do on its Major Schemes.

Scheme

2021-2022 RE (CRORE)

2022-2023 BE (CRORE)

National Health Mission

34,947

37,800

Jal Jeevan Mission

60,000

45,011

National Education Mission

30,796

39,553

Pradhan Mantri Sadak Yojana

14,000

19,000

PM Kisan

67,500

68,000

Aatmanirbhar Bharat Rojgar Yojana

5,000

6,400

(BE-Budget estimates RE- Revised estimates)

Ministry Wise allocation

Ministry of Communications

105406.82 Cr.

Ministry of Chemicals and Fertilisers

107715.38 Cr.

Ministry of Agriculture and Farmers' Welfare

132513.62 Cr.

Ministry of Rural Development

138203.63 Cr.

Ministry of Railways

140367.13 Cr.

Ministry of Home Affairs

185776.55 Cr.

Ministry of Road Transport and Highways

199107.71 Cr.

Ministry of Consumer Affairs, Food and Public Distribution

217684.46 Cr.

Ministry of Defence

525166.15 Cr.

Key Takeaways

We as a common man are most concerned about the taxes and what changes might take place as far as finance & investment is concerned along with the things that can become costlier and cheaper. So to make your work easier, take a look at the key takeaways. 

  • The government is focused on bringing a stable tax regime, and on catering for this, they will provide a one-time window to rectify the omission (mistakes) in ITR filings for which updated returns are to be filed within two years. 

  • As far as digital assets (Cryptocurrencies, NFT’s) are concerned, the government will tax its gains at 30% plus 1% TDS will be levied on payments made in relation with them. Also, the gift of virtual assets will be taxed at the receiver's hand. 

  • Surcharge on LTCG on assets has been capped at 15% (which was earlier based on income and could go up to as high as 37%, but now it’s a maximum of 15%)

  • The tax exemption limit has increased to 14% on Employers contribution to the NPS account of state government employees. 

  • RBI has proposed to introduce a new digital rupee that will roll out in 2023. 

  • Under the productivity linked incentive schemes, 60 lakh new jobs are to be created in 14 sectors. 

  • 5G spectrum will be rolled out within 2022-2023. 

  • Certain goods on which the government has cut custom duties are frozen mussels, frozen squids, Asafoetida, Cocoa Beans, Methyl alcohol, cut & polished diamonds, acetic acid, camera lens for cellular mobile phones. These goods are expected to become cheaper. 

  • On the other hand, the goods that are expected to become costlier are headphones, earphones, loudspeakers, smart meters, solar cells, solar modules, Parts of electronic toys, X-ray machines, Umbrella as the import duties on these items are raised. 

  • Good news for the international travellers, E-passports are to be rolled out. A new passport booklet with advanced security features is expected to be rolled out soon this year.

  • The government is all set to promote EV in full swing. Thus, for setting up battery stations at a mass level, a battery swapping policy will be rolled out.  

  • The government is all set to borrow money using green bonds. Green bonds are instruments made to raise money for climate and environmental projects.

  • The Capital expenditure has hiked by 24% to Rs. 7.5 Lakh Crore.  

  • The fiscal deficit, i.e the total money spent in excess of total money earned by the government is 6.9% of GDP which is expected to improve to 6.4% of GDP next year. 

The bottom line

All-in-all it was clear that only a few major revolutionary changes were announced in the Union Budget 2022-2023 except for taxes on digital assets, the surcharge cap on LTCG, the proposal of the introduction of new digital currency by RBI. For taxpayers like you and me, Tax slabs have not changed even though taxpayers were applauded for the GST collection of 14 Lakh crore, which is the highest since the inception of GST. The government not necessarily legalised cryptocurrencies but definitely taxed them.  

Also, Most of us, as the common man, can connect to the fact that we had different and more expectations from the budget this year such as more clarity on tax slabs, an increase in exemption limit of 80 C, some even claimed that LTCG tax would be abolished. But on the brighter side, our Finance Minister claims the economic growth is expected at the rate of 9.2% in the current financial year. In 25 years we will be celebrating 100 years of Indian independence and according to the government, India should be on the path of being a sustained nation. So, in the end, it was a balanced budget and looked as if it complemented last years budget.

About the Author: Ayushi Upadhyay | 234 Post(s)

A Keen Learner.
Passionate for Creative Writing & Finance!

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