This was India’s second budget following the COVID-19 pandemic. With the country’s economy expected to rebound despite the pandemic’s impact, all eyes were already on the government, which was closely scrutinized for how it balanced its yearly financial plan for the following year, while the middle-class hoped-for tax relief. However, no significant tax reduction was offered. Opponents have labeled this a “Budget for the Rich.” To get the economy back on track, it was necessary to put more money in the hands of ordinary people and encourage them to spend it. People were mostly looking for tax reduction in light of the impending elections. However, the government chose the route of progress over apprehension. The budget is growth-oriented, with a focus on capital spending to stimulate economic development and job creation. Reduced surcharges on unlisted shares from 28.5 percent to 23 percent, for example, are anticipated to facilitate investor withdrawals from start-ups. To help the middle class, the budget provided in these tough times should be more flexible in terms of government expenditure.
The Finance Minister’s formal declaration on the introduction of India’s Digital Currency is a much-anticipated and significant step. This reinforces the concept that India is on the cutting edge of technological adoption. A digital currency will increase transaction transparency and allow for the tracking of all money, decreasing the usage of black money and cash-based transactions. This adoption of digital money will also see MSMEs’ loan needs to be met on demand and on time in the future, but it will also maintain lenders’ asset quality in the sector intact, notwithstanding the Omicron wave increasing to the dangers. The issuance of money by the RBI will culminate in an organized manner with regulated regulation, ensuring trust. Healthcare and infrastructure were the budget’s key centerpieces, with massive expenditure earmarked for the building of motorways, waterways, transport networks, and trains. As predicted, youth and entrepreneurs were given special consideration in the budget. The ECLGS credit program assurance cover has been increased by Rs 50,000 crore, allowing stressed-out MSMEs to obtain collateral-free loans. However, the government might have focused on initiatives/spending that have a multiplier effect on the economy and should have set response to the great trend for the Indian economy while offering some immediate assistance to those who have been most hit by COVID-19. This year’s budget lacked some strong measures in this approach.
Key points:-
Agriculture
• Wheat, paddy, Kharif, and rabi crop procurement, supporting nearly 1 crore farmers.
• NABARD will support a fund with blended capital to assist agricultural and rural company starts.
• 2.37 lakh crore for direct contributions towards the minimum support price.
• Across the country, chemical-free, natural farming will be encouraged.
• Millet Year 2022 – assistance for post-harvest value addition for millet goods
• Using Kisan drones for crop evaluation and pesticide spraying
• A Rs 44,000 crore project to join the Ken and Betwa rivers will benefit 9.0 lakh hectares of agricultural land.
Digital currency
• FM Sitharaman’s Budget 2022: Key takeaways for digital currency
• RBI will launch digital rupee using blockchain technology beginning 2022/23
• Losses from the sale of virtual digital assets cannot be offset against other income
• Income from virtual digital assets to be taxed at 30%
• TDS of 1% would be made on the transfer of digital assets
• Sending or receiving digital assets in the form of gifts would be taxed at the hands of recipients
Defence
• National procurement accounts for 68 percent of the capital procurement expenditure.
• Defence R&D will be made available to start-ups, commercial businesses, and academics. A quarter of the R&D budget will be set aside for this purpose.
• The private sector will be incentivized to design and produce military systems and equipment.
Education
• Based on a networked hub paradigm, an education digital university would be constructed and created in several Indian languages.
• To compensate for the loss of formal education due to Covid, One Class, One
• TV Channel would be increased from 12 to 200 TV Channels to provide supplemental education in all regional languages.
Finance
• LIC IPO – Public offering of Life Insurance Corporation (LIC) expected soon • To amend bankruptcy code to expedite the resolution process
• Emergency credit line ensure protection for small and medium-sized businesses to be extended to March 2023
• Budget 2022 aims to reduce the time required to wind up a company to 6 months from 2 years currently
• Special Economic Zones (SEZ) Act to be replaced by new legislation The government’s top goal will be energy transformation and climate action. The long-term capital gain surcharge will be restricted to 15%.
Health
• The National Digital Health Ecosystem will be implemented.
• A national telemental health program will be established to focus on mental health.
• There are 23 high-quality telemental health centers.
• Women and children will benefit from integrated services provided by Mission Shakti, Mission Vatsalya, Saksham Anganwadi, and Poshan 2.0.
• Under Har Ghar, Nal se Jal, Rs. 60,000 crores have been earmarked to cover 3.8 crore homes in 2022-23.
Infrastructure
• A budget of Rs 480 billion has been set out for affordable housing in 2022/23.
• 5G spectrum auctions will take place in 2022; contracts will be awarded to put optical fiber in rural areas, with completion expected in 2025;
• An additional Rs 195 billion will be allocated for production-linked incentives for solar equipment manufacturing;
• A scheme for design-led production for 5G will be included in the production-linked scheme.
Taxation, Economics, and Finance
• The fiscal deficit amounts to 6.9 percent of GDP.
• If there is an error in their filing, taxpayers can file an amended return within two years.
• Cooperative societies pay an alternative minimum tax of 18.5 percent, whereas corporations pay a tax of 15 percent. Cooperatives will now be required to pay only 15%.
• Surcharges have also been decreased to 7% for cooperatives with incomes ranging from one to ten crores.
• Persons with disabilities are eligible for tax breaks.
• The tax deduction ceiling for state government employees’ NPS accounts has been raised to 14 percent.
• Virtual digital assets will be subject to taxation.
• Gati Shakti, Minister of Transport For 20,000 crores, the National Master Plan
• In 2022-23, the national highway network will be increased by 25,000 kilometers.
• In 2022-23, a National Master Plan for Expressways will be developed.
• 400 label generations Vande Bharat trains will be produced.
• Under the Parvat Mala project, 60 kilometers of ropeway will be built over the next three years, as will metro systems and multi-model connectivity.