Finance Minister of India, Nirmala Sitharaman, has announced the Union Budget for 2022-23 on February 1, 2022. With an emphasis on boosting the economy, expanding business prospects, and perhaps creating 60 lakh new job opportunities.
“This budget tries to set the groundwork and provide a strategy to manage the economy over the next Amrit Kaal. (i.e.) from India at 75 to India at 100,” Sitharaman said in her shortest budget presentation, which lasted 1 hour and 30 minutes. The minister delivered a paperless budget and read her speech from an iPad, as she did last year.
Union Budget 2022 Summary
Fiscal Deficit Target:
In FY23, the country’s total spending is expected to be ₹39.45 lakh crore. While revenues other than borrowings are expected to be ₹22.84 lakh crore. The budget deficit is expected to be 6.4 per cent of GDP in FY23.
Tax Deduction Limit
The tax deduction limit for state government workers on the employer’s contribution to the National Pension System has raised from 10% to 14%, bringing them on a level with Central government employees.
Taxation for Cryptocurrency transfer
Hereafter, any revenue derived from the transfer of any virtual digital asset will be taxable at a rate of 30%. Tax must be deducted at the source on payments made for the transfer of a virtual digital asset at a rate of 1% of the amount paid above a monetary threshold.
Digital Currency from RBI
Beginning in FY23, the Reserve Bank of India will issue a digital currency based on blockchain and other technology. “The introduction of Central Bank Digital Currency would provide a significant boost to the digital economy,” stated the finance minister in the Union Budget 2022.
Scheme for Financial Assistance to States for Capital Investment
The budget for the ‘Scheme for Financial Assistance to States for Capital Investment’ has enhanced to ₹1 lakh crore in FY23. That is up from Rs 15,000 crore in the revised estimate for the current fiscal year. That is to support states in catalysing overall economic investment. In addition, these 50-year interest-free loans are to the standard borrowing limits for states. And the funds will be spent for PM Gati Shakti-related and other productive capital expenditures.
Gati Shakti National Master Plan
The factors of development in PM Gati Shakti National Master Plan are roads, railroads, airports, ports, mass transportation, waterways, and logistics infrastructure, all of which work together to propel the economy forward. The Gati Shakti Master Plan for expressways will be developed in FY23. And 100 new freight terminals will be constructed during the next three years. In FY23, the national highway network will be increased by 25,000 kilometres.
New Policy for electric cars battery
The congestion in metropolitan areas left no space for charging stations for electric cars. Therefore, the finance minister advocated implementing a policy of rechargeable batteries. And also developing interoperability standards for electric cars. The private sector would also be encouraged to create long-term. Thus, it would create a new business opportunity like petrol bunks.
Natural Farming and Kisan Drones
Promoting chemical-free natural farming across the country, with the initial stage focusing on the agricultural area around the Ganga. The procurement of wheat in Rabi 2021-22 and the expected procurement of paddy in Kharif 2021-22 will contribute ₹2.37 lakh crore to farmers’ accounts through direct payment of minimum support prices. Using Kisan drones will help in crop evaluation, land record digitisation, and pesticide and fertiliser spraying.
Education through TV
With students losing nearly two years of formal schooling owing to the pandemic, PM eVIDYA’s ‘One Class-One TV Channel’ initiative will be expanded from 12 to 200 TV channels. That would allow all states to provide extra education in regional languages to students in grades 1 through 12. A Digital University will be established to deliver world-class universal education with a personalised learning experience. That will be made available in a variety of Indian languages and ICT formats.
The national defence sector will get 68 per cent of the capital procurement budget to decrease imports and boost AtmaNirbharta in armed forces equipment. The private sector will also be encouraged to design and build military platforms and equipment in partnership with the Defense Research and Development Organization (DRDO) and other authorities.
Banking in Post Offices
All 150,000 post offices in India will also be in the main banking system. That gives access to accounts via internet banking, mobile banking, and ATMs, as well as online transfers between post offices and bank accounts. Farmers and older persons in rural regions would benefit from this since it will enable interoperability and financial inclusion.
Special Economic Zone Act
The Special Economic Zones (SEZ) Act will be overturned in favour of new legislation. That would allow states to collaborate in the development of enterprise and service centres. That will apply to all big current and planned industrial enclaves to maximise infrastructure use and boost export competitiveness.
Hospitality and associated services provided by small and medium-sized businesses have yet to return to pre-pandemic levels. The government has agreed to raise the guarantee cover for them by ₹50,000 crores under a program that extends till March 2023.
The government is trying to take steps to improve transparency and eliminate payment delays. Hence, they are implementing a paperless, end-to-end online e-bill system for use by all central ministries for their procurements.
Improving Solar Energy production
The government would provide an extra allocation of ₹19,500 crores under the production-linked incentive programme. It is for the production of high-efficiency modules to promote domestic manufacturing of 280 gigawatts of installed solar energy capacity by 2030.
In FY23, the government promised to build 2,000 km of the network under Kavach, the domestic, world-class technology for safety and capacity augmentation. This scheme is part of Atmanirbhar Bharat. And also promised to produce 400 new-generation Vande Bharat trains over the following three years.
E-passports with embedded chips and future technologies will be available in FY23, making international travel more accessible.
Long Term Capital Gains
The government now restricts the surcharge on long-term capital gains (LTCG) from the transfer of any asset to 15%.
2 Year Time for updating tax returns
Taxpayers now have two years from the end of the relevant assessment year to correct errors and file revised returns.
Financial Advisor Anand Srinivasan’s view of Union Budget 2022
Economic Advisor Anand Srinivasan on February 1, 2022, spoke about his views in a well-famous Tamil News Channel Sun News on the Union Budget for the financial year 2022-23 presented by Finance Minister Nirmala Sitharaman.
Welcoming key points about Union Budget 2022
The first point Financial Advisor Anand Srinivasan welcomes about this Union Budget 2022 is the taxation for cryptocurrency. And also, if losses in cryptocurrency, we cannot set off against profit. He foresees it as a stepping stone for the complete ban of cryptocurrency. He states that the youngsters aren’t aware of the truth behind cryptocurrency. And investing in it as a gambling game and making losses. Till now, these transactions were made through apps without any connection to banking sectors. So, these investments are now being tracked and taxed at 30% for buying them. And also, 1% TDS will be collected for transacting digital assets. He declares that the only main highlight of this Union Budget is this taxation for digital assets. “The reduction on corporate surcharge from 12% to 7%. Thus, it has also benefited the corporate sector,” he says.
Vision India 2047
He says that the promise for the 5-Year 5-Trillion Dollar economy failed. And so, the minister extended the scheme for 25 years as “India@2047”. No one knows who rules in 2047, but the scheme extends for 25 years. Even the budget on railway infrastructure scheme also extends for 3 years. Further, he condemns that the budget is to plan for the relevant financial year, and this scheme is the absolute opposite.
Privatisation of Air India
He states that the government feels proud of the privatisation of Air India. But the real scenario is the government has repaid the loan up to ₹36,000 crores. Further, Tata has availed a loan of ₹18,000 crores from the State Bank of India (SBI) and Bank of Baroda and bought the airlines. Where these two banks are public sector banks that provided a loan for a very low interest of 4.5%. However, MSME companies can only get a 13% interest loan from the public sector banks. He insists on the scenario of 4.5 % is a very low-interest rate. He articulates that the Indian government gets a loan for a 6.75% interest rate from the World Bank and provides a loan to a corporate for just 4.5%. Hence, this shows that the union government exhibits their interest only in corporate development.
No change in middle-class or salaried people tax benefits
This budget let down the expectations for middle and lower-middle-class tax benefits. The minister announced there is no change in the individual income tax slab. When the interviewer asks about his view on this statement, he says that it doesn’t make any benefit for the people. As the money inflation for the last year was 8% and still keeping it as the same will not help in any way. This will affect the middle-class salaried people to run their family as the costs of the daily needs are becoming higher.