Professional Documents
Culture Documents
Budget Speech
Budget Speech
Budget Speech
Speech of
NirmalaSitharaman
Minister of Finance
February 1, 2022
Hon’ble Speaker,
I present theBudget for the year 2022-23.
Introduction
selected. The public issue of the LIC is expected shortly. Others too are in
the process for 2022-23.
PM GatiShakti
Inclusive Development
Financing of Investments
PM GatiShakti
Road Transport
19. The data exchange among all mode operators will be brought
on Unified Logistics Interface Platform (ULIP), designed for Application
Programming Interface (API). This will provide for efficient movement of
goods through different modes, reducing logistics cost and time, assisting
just-in-time inventory management, and in eliminating tedious
documentation. Most importantly, this will provide real time information to
all stakeholders, and improve international competitiveness. Open-source
mobility stack, for organizing seamless travel of passengers will also be
facilitated.
Railways
Inclusive Development
Agriculture
6
Food Processing
MSME
Skill Development
8
Digital University
60. 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 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
inter-operability and financial inclusion.
Digital Banking
Digital Payments
64. For the AmritKaal, the next phase of Ease of Doing Business
EODB 2.0 and Ease of Living, will be launched. In our endeavour to improve
productive efficiency of capital and human resources, we will follow the
idea of ‘trust-based governance’.
Green Clearances
e-Passport
Urban Development
Government Procurement
Telecom Sector
85. Our vision is that all villages and their residents should have
the same access to e-services, communication facilities, and digital
resources as urban areas and their residents. The contracts for laying optical
fibre in all villages, including remote areas, will be awarded under the
Bharatnet project through PPP in 2022-23. Completion is expected in 2025.
Measures will be taken to enable better and more efficient use of the
optical fibre.
Export Promotion
86. The Special Economic Zones Act will be replaced with a new
legislation that will enable the states to become partners in ‘Development
of Enterprise and Service Hubs’. This will cover all large existing and new
industrial enclaves to optimally utilise available infrastructure and enhance
competitiveness of exports.
AtmaNirbharta in Defence
Sunrise Opportunities
Solar Power
Circular Economy
97. Four pilot projects for coal gasification and conversion of coal
into chemicals required for the industry will be set-up to evolve technical
and financial viability.
Financing of Investments
infrastructure. The economy has shown strong resilience to come out of the
effects of the pandemic with high growth. However, we need to sustain that
level to make up for the setback of 2020-21.
102. With this investment taken together with the provision made for
creation of capital assets through Grants-in-Aid to States, the ‘Effective
Capital Expenditure’ of the Central Government is estimated at ` 10.68 lakh
crorein 2022-23, which will be about 4.1 per cent of GDP.
Green Bonds
GIFT-IFSC
106. Services for global capital for sustainable & climate finance in
the country will be facilitated in the GIFT City.
Infrastructure Status
19
108. Venture Capital and Private Equity invested more than ` 5.5
lakh crore last year facilitating one of the largest start-up and growth
ecosystem. Scaling up this investment requires a holistic examination of
regulatory and other frictions. An expert committee will be set up to
examine and suggest appropriate measures.
Blended Finance
Digital Rupee
Fiscal Management
PART B
Direct Tax
119. Hon'ble Speaker, Sir, I take this opportunity to thank all the
taxpayers of our country who have contributed immensely and
strengthened the hands of the government in helping their fellow
citizens in this hour of need.
दापयित्वाकरंधर्म्यंराष्ट्रंनित्यंयथाविधि।
अशेषान्कल्पयेद्राजायोगक्षेमानतन्द्रितः॥११॥
dāpayitvākaraṃdharmyaṃrāṣṭraṃnityaṃyathāvidhi |
aśeṣānkalpayedrājāyogakṣemānatandritaḥ ||
132. It has been observed that a lot of time and resources are
consumed in filing of appeals which involve identical issues. Taking
forward our policy of sound litigation management, I propose to
provide that, if a question of law in the case of an assessee is
identical to a question of law which is pending in appeal before the
jurisdictional High Court or the Supreme Court in any case, the filing
of further appeal in the case of this assessee by the department shall
be deferred till such question of law is decided by the jurisdictional
High Court or the Supreme Court. This will greatly help in reducing the
repeated litigation between taxpayers and the department.
type of assets at 15 per cent. This step will give a boost to the
start up community and along with my proposal on extending
tax benefits to manufacturing companies and start ups re
affirms our commitment to AtmaNirbhar Bharat.
138. A few other changes are being made the details of which are
there in the Finance Bill.
Indirect taxes
27
some cases, have been granted to capital goods for various sectors
like power, fertilizer, textiles, leather, footwear, food processing and
fertilizers. These exemptions have hindered the growth of the
domestic capital goods sector.
147. This comprehensive review will simplify the Customs rate and
tariff structure particularly for sectors like chemicals, textiles and
metals and minimise disputes. Removal of exemption on items which
are or can be manufactured in India and providing concessional duties
on raw material that go into manufacturing of intermediate products
will go many a step forward in achieving our objective of ‘Make in
India’ and ‘Atmanirbhar Bharat’.
Electronics
29
Chemicals:
MSME
Exports
156. A few other changes are being made in duty rates, Customs
Tariff and Customs Law the details of which are there in the Finance
Bill.
157. Mr Speaker Sir, with these words I commend the budget to this
august house.
31
Annexure 1
(Refer Para 57)
INITIAL LIST OF PROJECTS UNDER PM DevINE
Total 1500
32
Annexure 2
Statement of Extra Budgetary Resources (EBRs) (Govt. fully serviced bonds, NSSF loan and other
resources)
(In ` crores)
Part-A – EBRs mobilised through issue of Govt. fully serviced bonds
De Name of the 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2021- 2022-23
ma Ministry/Department and 22
nd Name of the Scheme Actuals Actuals Actuals Actuals Actuals BE RE BE
No.
26 Department of Higher
Education
Revitalising Infrastructure and --- --- --- --- ---
Systems in Education (RISE)
46 Department of Health &
Family Welfare
PradhanMantriSwasthyaSuraks --- --- --- --- ---
haYojana
60 Ministry of Housing &
Urban Affairs
PradhanMantriAwasYojana --- --- 20000.00 --- ---
(PMAY) - Urban
62 Department of Water
Resources, River
Development & Ganga 751.8
Rejuvenation 0
(i) Polavaram Irrigation --- --- 1400.00 1850.00 2243.20
Project
(ii) 2187.00 3105.00 5493.40 1963.30 1922.10
PradhanMantriKrishiSinch
aiYojana (Accelerated
NIL
Irrigation Benefits
Programme & other
Projects)
63 Department of Drinking
Water & Sanitation
(i) Swachh Bharat Mission --- --- 8698.20 3600.00 ---- NIL
(Rural) --- --- --- --- ---
(ii) JalJeevan
Mission/National Rural
Drinking Water
Programme
71 Ministry of New &
Renewable Energy
(i) Grid Interactive 1640.00 --- --- --- ---
Renewable Power, Off-
Grid/ Distributed &
Decentralized Renewable
Power
(ii) PradhanMantri- --- --- --- --- ---
KisanUrjaSanrakshanEva
mUtthanMahabhiyan
(PM-KUSUM)
78 Ministry of Ports, Shipping
and Waterways
Inland Waterways Authority of 340.00 660.00 --- ---- ---
India (IWAI) Projects
751.8
79 Ministry of Power 0
33
Notes:
(i) Air India Asset Holding Limited (AIAHL) under M/o Civil Aviation was permitted to raise EBRs by issuing
Govt. Fully Serviced Bonds of upto` 7,000 crore in FY 2019-20 to refinance AIs debt transferred to AIAHL.
(ii) M/o Railways was permitted to meet fund requirement of upto ` 10,200 crore (` 5,200 crore in FY 2018-19
&`5,000 crore in FY 2019-20) through borrowings for financing its National Projects. The repayment liability is
being borne on General Revenues of Govt.
(iii) An amount of ` 80,000 crore in 2017-18, ` 1,06,000 crore in 2018-19 and `65,443 crore in 2019-20 was infused
for recapitalisation of Public Sector Banks (PSBs). For this purpose, a provision of `15,000 crore has been made
in 2021-22.
(iv) Statement of liability on annuity projects is given in Part-B of the Receipt Budget 2022-23. Amount of unpaid
annual liability at the end of financial year 2020-21 was `38775.72 crore.
(v) EBR in FY2021-22 under Polavaram Irrigation Project was raised as per the existing funding arrangement for
this project.
Further financing is being met from budget.
34
Ministry of Finance
The Union Budget seeks to complement macro-economic level growth with a focus on micro-
economic level all inclusive welfare. The Union Minister for Finance & Corporate Affairs, Smt
Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament today.
The key highlights of the budget are as follows:
PART A
India’s economic growth estimated at 9.2% to be the highest among all large
economies.
60 lakh new jobs to be created under the productivity linked incentive scheme in 14
sectors.
PLI Schemes have the potential to create an additional production of Rs 30 lakh
crore.
Entering Amrit Kaal, the 25 year long lead up to India @100, the budget provides
impetus for growth along four priorities:
PM GatiShakti
Inclusive Development
Productivity Enhancement & Investment, Sunrise opportunities, Energy
Transition, and Climate Action.
Financing of investments
PM GatiShakti
The seven engines that drive PM GatiShakti are Roads, Railways, Airports, Ports,
Mass Transport, Waterways and Logistics Infrastructure.
The scope of PM GatiShakti National Master Plan will encompass the seven engines for
economic transformation, seamless multimodal connectivity and logistics efficiency.
The projects pertaining to these 7 engines in the National Infrastructure Pipeline
will be aligned with PM GatiShakti framework.
Road Transport
35
Railways
One Station One Product concept to help local businesses & supply chains.
2000 Km of railway network to be brought under Kavach, the indigenous world class
technology and capacity augmentation in 2022-23.
400 new generation Vande Bharat Trains to be manufactured during the next three
years.
100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during
the next three years.
Parvatmala
Inclusive Development
Agriculture
Rs. 2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat
and paddy.
Chemical free Natural farming to be promoted throughout the county. Initial focus is on
farmer’s lands in 5 Km wide corridors along river Ganga.
NABARD to facilitate fund with blended capital to finance startups for agriculture & rural
enterprise.
‘Kisan Drones’ for crop assessment, digitization of land records, spraying of insecticides
and nutrients.
MSME
Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under
the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs
6000 Crore to be rolled out.
Skill Development
· Virtual labs and skilling e-labs to be set up to promote critical thinking skills and simulated
learning environment.
· High-quality e-content will be developed for delivery through Digital Teachers.
· Digital University for world-class quality universal education with personalised learning
experience to be established.
Health
· ‘National Tele Mental Health Programme’ for quality mental health counselling and care
services to be launched.
A network of 23 tele-mental health centres of excellence will be set up, with NIMHANS
being the nodal centre and International Institute of Information Technology-Bangalore
(IIITB) providing technology support.
Saksham Anganwadi
Integrated benefits to women and children through Mission Shakti, Mission Vatsalya,
Saksham Anganwadi and Poshan 2.0.
Two lakh anganwadis to be upgraded to Saksham Anganwadis.
Har Ghar, Nal Se Jal
Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar,
Nal se Jal.
37
Housing for All
Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM
Awas Yojana.
Prime Minister’s Development Initiative for North-East Region (PM-DevINE)
Vibrant Villages Programme
Vibrant Villages Programme for development of Border villages with sparse population,
limited connectivity and infrastructure on the northern border.
Banking
100 per cent of 1.5 lakh post offices to come on the core banking system.
Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75
districts.
e-Passport
Urban Planning
Land Records Management
Unique Land Parcel Identification Number for IT-based management of land records.
Accelerated Corporate Exit
38
AVGC Promotion Task Force
An animation, visual effects, gaming, and comic (AVGC) promotion task force to
be set-up to realize the potential of this sector.
Telecom Sector
Export Promotion
Special Economic Zones Act to be replaced with a new legislation to enable States
to become partners in ‘Development of Enterprise and Service Hubs’.
AtmaNirbharta in Defence:
· Defence R&D to be opened up for industry, startups and academia with 25% of defence R&D
budget earmarked.
· Independent nodal umbrella body to be set up for meeting testing and certification
requirements.
Sunrise Opportunities
Energy Transition and Climate Action:
· Five to seven per cent biomass pellets to be co-fired in thermal power plants:
39
o CO2 savings of 38 MMT annually,
o Extra income to farmers and job opportunities to locals,
o Help avoid stubble burning in agriculture fields.
· Four pilot projects to be set up for coal gasification and conversion of coal into
chemicals for the industry
· Financial support to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to
take up agro-forestry.
Public Capital Investment:
· Outlay for capital expenditure stepped up sharply by 35.4% to Rs. 7.50 lakh crore in
2022-23 from Rs. 5.54 lakh crore in the current year.
· Outlay in 2022-23 to be 2.9% of GDP.
GIFT-IFSC
Mobilising Resources
· Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating
one of the largest start-up and growth ecosystem. Measures to be taken to help scale up this
investment.
· Blended funds to be promoted for sunrise sectors.
· Sovereign Green Bonds to be issued for mobilizing resources for green infrastructure.
Digital Rupee
40
Enhanced outlay for ‘Scheme for Financial Assistance to States for Capital
Investment’:
o From Rs. 10,000 crore in Budget Estimates to Rs. 15,000 crore in Revised Estimates
for current year
· Allocation of Rs. 1 lakh crore in 2022-23 to assist the states in catalysing overall
investments in the economy: fifty-year interest free loans, over and above normal borrowings
In 2022-23, States will be allowed a fiscal deficit of 4% of GSDP, of which 0.5% will
be tied to power sector reforms
Fiscal Management
PART B
DIRECT TAXES
To take forward the policy of stable and predictable tax regime:
Cooperative societies
Alternate Minimum Tax paid by cooperatives brought down from 18.5 per cent to 15
per cent.
Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those
having total income of more than Rs 1 crore and up to Rs 10 crores.
Payment of annuity and lump sum amount from insurance scheme to be allowed to
differently abled dependent during the lifetime of parents/guardians, i.e., on parents/
guardian attaining the age of 60 years.
Tax deduction limit increased from 10 per cent to 14 per cent on employer’s
contribution to the NPS account of State Government employees.
Brings them at par with central government employees.
Would help in enhancing social security benefits.
Incentives for Start-ups
Litigation Management
In cases where question of law is identical to the one pending in High Court or Supreme
Court, the filing of appeal by the department shall be deferred till such question of law
is decided by the court.
To greatly help in reducing repeated litigation between taxpayers and the department.
Rationalization of Surcharge
Surcharge on AOPs (consortium formed to execute a contract) capped at 15 per cent.
Done to reduce the disparity in surcharge between individual companies and AOPs.
Surcharge on long term capital gains arising on transfer of any type of assets capped
at 15 per cent.
To give a boost to the start up community.
No set off, of any loss to be allowed against undisclosed income detected during search
and survey operations.
INDIRECT TAXES
Remarkable progress in GST
GST revenues are buoyant despite the pandemic – Taxpayers deserve applause for this
growth.
Faceless Customs has been fully established. During Covid-19 pandemic, Customs
formations have done exceptional frontline work against all odds displaying agility and
purpose.
Gradually phasing out of the concessional rates in capital goods and project imports;
and applying a moderate tariff of 7.5 percent – conducive to the growth of domestic
sector and ‘Make in India’.
Certain exemptions for advanced machineries that are not manufactured within the
country shall continue.
A few exemptions introduced on inputs, like specialised castings, ball screw and linear
motion guide - to encourage domestic manufacturing of capital goods.
More than 350 exemption entries proposed to be gradually phased out, like exemption
on certain agricultural produce, chemicals, fabrics, medical devices, & drugs and
medicines for which sufficient domestic capacity exists.
Simplifying the Customs rate and tariff structure particularly for sectors like chemicals,
textiles and metals and minimise disputes; Removal of exemption on items which are or
can be manufactured in India and providing concessional duties on raw material that go
into manufacturing of intermediate products – in line with the objective of ‘Make in India’
and ‘Atmanirbhar Bharat’.
Sector specific proposals
Electronics
Gems and Jewellery
Customs duty on cut and polished diamonds and gemstones being reduced to 5 per
cent; Nil customs duty to simply sawn diamond - To give a boost to the Gems and
Jewellery sector
Chemicals
Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed
stocks for petroleum refining being reduced; Duty is being raised on sodium cyanide for
which adequate domestic capacity exists – This will help in enhancing domestic value
addition.
MSME
Customs duty on umbrellas being raised to 20 per cent. Exemption to parts of umbrellas
being withdrawn.
Exemption being rationalised on implements and tools for agri-sector which are
manufactured in India
Customs duty exemption given to steel scrap last year extended for another year to
provide relief to MSME secondary steel producers
Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars of
alloy steel and high-speed steel are being revoked – to tackle prevailing high prices of
metal in larger public interest.
Exports
Duty being reduced on certain inputs required for shrimp aquaculture - to promote its
exports.
Tariff measure to encourage blending of fuel
*****
RM/BB/LP/RC/SSV/AKS/SV
India's economic growth is predicted to be the highest among all large economies, at 9.2%.
Under the productivity-linked incentive scheme (PLI scheme), 6 million new jobs will be created in 14
different industries.
PLI Schemes have the potential to generate an additional Rs. 30,00,000 crore (US$ 401.24 billion) in
revenue.
The 'One Station-One Product' concept will be adopted in the railway sector to assist local
businesses and supply chains.
The government wants to promote a digital economy, fintech, technology-enabled development,
energy transition, and climate action.
The Budget encourages growth with the following priorities: PM Gati Shakti, Inclusive Development,
Productivity Enhancement and Investments, Sunrise opportunities, Energy Transition, Climate
Action, and Financing of Investments as India enters Amrit Kaal, the 25-year countdown to India's
100th independence anniversary.
Green Bonds will be issued by the government to raise funds for green infrastructure. The proceeds
will be used to fund public-sector programmes that reduce the economy's carbon intensity.
The government is pushing the blending of fuel by levying additional differential excise duty on
unblended fuel.
The government plans to rely on a virtuous cycle starting from private investment, and the help of
public capital investment to crowd-in private investment.
Part A
PM Gati Shakti:
Roads, Railways, Airports, Ports, Mass Transportation, Waterways, and Logistics Infrastructure are the
seven engines that propel PM Gati Shakti. The seven engines for economic transformation, seamless
multimodal connectivity, and logistical efficiency will be covered by the PM Gati Shakti National Master
Plan.
Road Transport: In 2022-23, the National Highways Network would be expanded by 25000
kilometres, with a budget of Rs. 20000 crore (US$ 2.67 billion) set out for the project.
Parks for Multimodal Logistics: Contracts for the implementation of Multimodal Logistics Parks at
four locations will be given using the PPP approach in 2022-23.
Railways:
The One Station One Product concept is developed to assist local businesses and supply chains.
46
In 2022-23, 2000 km of railway network will be brought under Kavach, a world-class indigenous
technology that will increase capacity.
400 new Vande Bharat trains will be constructed over the next three years.
Over the following three years, 100 PM Gati Shakti Cargo terminals for multimodal logistics will be
created.
Parvatmala:
Agriculture:
Direct payment of Rs. 2.37 lakh crore (US$ 31.67 billion) to 16.3 million farmers for wheat and paddy
procurement.
Free of chemicals Natural farming will be encouraged across the county. Farmers' holdings in 5 km
broad stretches along the Ganga are the initial focus.
NABARD will facilitate a fund with blended capital to finance agricultural and rural enterprise startups.
Drones called 'Kisan Drones' are used to inspect crops, digitise land records, and spray insecticides
and nutrients.
The Ken – Betwa link project will cost Rs. 1400 crore (US$ 187.2 million) to build.
The Ken-Betwa link project will provide irrigation to 9,08,000 hectares of farmers' land.
MSME
Skill Development: The Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be
launched to enable citizens to skill up, reskill, or upskill via online training. Startups will be
encouraged to facilitate 'Drone Shakti' and Drone-as-a-Service (DrAAS).
Education
47
PM eVIDYA's 'One Class-One TV channel' programme will be expanded to 200 channels. Virtual
labs and skilling e-labs will be established to enhance critical thinking skills and a simulated learning
environment.
Digital Teachers will create high-quality e-content for distribution.
A digital university will be built to provide world-class universal education with a tailored learning
experience.
Health
An open platform for the National Digital Health Ecosystem will be launched along with a 'National
Tele Mental Health Programme' for high-quality mental health counselling and care.
The National Institute of Mental Health and Neurosciences (NIMHANS) will serve as the nodal
centre, with the International Institute of Information Technology-Bangalore (IIITB) providing technical
assistance.
Saksham Anganwadi: Mission Shakti, Mission Vatsalya, Saksham Anganwadi, and Poshan 2.0 will
provide integrated benefits to women and children. Saksham Anganwadis would be increased to
2,00,000 anganwadis.
Har Ghar, Nal Se Jal: This scheme has been awarded Rs. 60,000 crores (US$ 8.02 billion) to cover
38 million households in 2022-23.
Housing for All: Under the PM Awas Yojana, Rs. 48,000 crores (US$ 6.41 billion) has been set
aside for the completion of 8 million residences by 2022-23.
Vibrant Villages Programme: Border communities with scant populations, poor connectivity, and
infrastructure on the northern border are being developed through the Vibrant Villages Program.
Banking: All 1,50,000 lakh post offices would be connected to the central banking system. 75 Digital
Banking Units (DBUs) will be established in 75 districts by scheduled commercial banks.
48
Urban Planning: Building bylaws will be updated, as well as Town Planning Schemes (TPS) and
Transit-Oriented Development (TOD). A battery swapping policy will be released in order to set up
charging stations on a large scale in urban areas.
Land Records Management: For IT-based land record administration, a unique Land Parcel
Identification Number is being assigned.
Accelerated Corporate Exit: The Centre for Processing Accelerated Corporate Exit (C-PACE) will
be formed to help corporations wind down quickly.
AVGC Promotion Task Force: To maximise the sector's potential, a task force for animation, visual
effects, gaming, and comics (AVGC) promotion will be formed.
Telecom Sector: As part of the Production Linked Incentive Scheme, a scheme for design-led
manufacturing will be established in order to create a robust ecosystem for 5G.
Export Promotion: The Special Economic Zones Act will be replaced with a new law allowing states
to collaborate on 'Enterprise and Service Hub Development.'
AtmaNirbharta in Defence
The domestic industry would receive 68% of the capital procurement budget in 2022-23, up from
58% in 2021-22.
With 25% of the defence R&D budget set aside, industry, entrepreneurs, and universities will
participate.
To meet testing and certification criteria, an independent nodal umbrella agency will be established.
49
An additional Rs. 19,500 crores (US$ 2.606 billion) has been allocated for the Production Linked
Incentive for the development of high-efficiency solar modules in order to achieve the target of 280
GW of installed solar power by 2030.
Co-firing of 5-7% biomass pellets in thermal power plants: CO2 savings of 38 MMT per year,
additional money for farmers and job opportunities for people, and assistance in preventing stubble
fire in agricultural fields.
Four pilot projects will be established for coal gasification and conversion into chemicals for the
industry.
Farmers from Scheduled Castes and Tribes who desire to engage in agro-forestry will receive
financial assistance.
In 2022-23, public investment will continue to boost private investment and demand.
Capital expenditures increased by 35.4% to Rs. 7.50 lakh crore (US$ 100.26 billion) in 2022-23, up
from Rs. 5.54 lakh crore (US$ 70.05 billion) this fiscal year.
In 2022-23, the outlay will be 2.9% of GDP.
The Central Government's 'Effective Capital Expenditure' is expected to be Rs. 10.68 lakh crore
(US$ 142.77 billion), or around 4.1% of GDP.
GIFT-IFSC: Foreign universities and institutes of international renown will be permitted to operate in
the GIFT City. An International Arbitration Centre will be established to expedite the resolution of
disputes under international law.
Mobilising Resources
Digital Rupee: The Reserve Bank of India will introduce the Digital Rupee in 2022-23.
Providing Greater Fiscal Spaces to States
'Scheme for Financial Assistance to States for Capital Investment' spending increased from Rs.
10,000 crores (US$ 1.33 billion) in Budget Estimates to Rs. 15,000 crores (US$ 2 billion) in Revised
Estimates for the current fiscal year.
In 2022-23, Rs. 1 lakh crore (US$ 13.36 billion) would be allocated to help states catalyse total
economic investment through fifty-year interest-free loans, in addition to standard borrowings.
States will be allowed a fiscal deficit of 4% of GDP in 2022-23, with 0.5% connected to power sector
reforms.
50
Fiscal Management
Budget Estimates for the years 2021-22: Rs. 34.83 lakh crore (US$ 465.60 billion); Revised
Estimates for the years 2021-22: Rs. 37.70 lakh crore (US$ 503.97 billion).
Total spending in 2022-23 is expected to be Rs. 39.45 lakh crore (US$ 527.36 billion).
Total receipts other than borrowings are expected to be Rs. 22.84 lakh crore (US$ 305.32 billion) in
2022-23.
In the current fiscal year, the fiscal deficit is 6.9% of GDP (against 6.8% in Budget Estimates).
The fiscal deficit is expected to be 6.4% of GDP in 2022-23.
PART B
DIRECT TAXES
To continue with the policy of a stable and predictable tax system:
'Updated return' is a new feature.
Cooperative societies
The Alternate Minimum Tax paid by cooperatives has been reduced from 18.5% to 15% to provide a
level playing field between cooperative societies and companies.
The surcharge on cooperative societies has been decreased from 12% to 7% for those with total
revenue of more than Rs. 1 crore (US$ 133,733.64) but less than Rs. 10 crore (US$ 1.33 million).
Payment of annuity and lump sum amount from insurance system to differently abled dependents
during parents'/guardians' lifetimes, i.e., when parents/guardians reach the age of 60.
The employer's contribution to a State Government employee's NPS account is now eligible for a tax
deduction, which has been increased from 10% to 14%.
Raises them to the same level as central government personnel.
It would aid in the improvement of social security benefits.
For qualifying startups to get a tax benefit, the period of incorporation has been extended by one
year, until 31 March 2023.
Previously, the incorporation term was valid through March 31, 2022.
The deadline for starting manufacturing or production under section 115BAB has been extended by
one year, from March 31, 2023 to March 31, 2024.
Virtual digital assets are subject to a taxation scheme
A new tax structure for virtual digital assets has been established.
Any income derived from the transfer of a virtual digital asset will be taxed at a rate of 30%.
Except for the cost of acquisition, no deductions or allowances will be allowed for computing such
income.
Any loss incurred due to the transfer of a virtual digital asset cannot be offset against any other
revenue.
To capture transaction details, a 1% TDS will be applied to each payment made in relation to the
transfer of a virtual digital asset above a certain monetary threshold
Gifts of virtual digital assets are also to be taxed in the hands of the recipient.
Management of Litigation
When a question of law is identical to one pending before the High Court or Supreme Court, the
department's filing of an appeal is postponed until the court has resolved the question of law.
To significantly reduce the number of times taxpayers and the department have to go to court.
Tax incentives to IFSC
Rationalisation of Surcharge
Any surcharge or tax on earnings and profits that is not deductible as a business expense.
No set-off of any loss against undeclared income discovered during search and survey operations
will be allowed.
Agent benefits are taxable in their hands because they are passed on to them as a company
development plan.
If the total value of the benefits supplied during the financial year exceeds Rs. 20,000 (US$ 267.31),
the person providing the benefits is entitled to a tax deduction.
INDIRECT TAXES
Remarkable progress in GST:
Despite the pandemic, GST receipts are increasing, and taxpayers should be applauded for this.
SEZ Customs Administration should be IT-driven and operate on the Customs National Portal – to be
implemented by September 30, 2022.
Faceless Customs is now fully operational. Customs formations have done outstanding frontline work
despite all odds during the Covid-19 pandemic, demonstrating agility and purpose.
Gradually phase down concessional rates on capital goods and project imports, and implement a
reasonable tariff of 7.5%, which is favourable to domestic sector growth and 'Make in India.'
Specific exclusions for modern machinery that is not made in the country will be maintained.
A few exclusions were introduced for inputs such as specialised castings, ball screws, and linear
motion guides to encourage domestic manufacturing.
Exemptions on some agricultural commodities, chemicals, fabrics, medical devices, and medications
and medicines for which sufficient domestic capacity exists are among the more than 350 exemption
entries scheduled to be phased away progressively.
The customs rate and tariff structure should be simplified to reduce disputes, particularly for sectors
such as chemicals, textiles, and metals. In line with the goals of 'Make in India' and 'Atmanirbhar
Bharat,' exemptions on commodities that are or can be manufactured in India are being removed. At
the same time, concessional duties on raw materials used in the creation of intermediate products
are being offered.
Sector Specific Proposals
Electronics:
o To support local manufacturing of wearable gadgets, hearing devices, and electronic
smart metres, customs duty rates will be calibrated to create a graded rate structure.
o Duty exemptions for portions of transformers in mobile phone chargers, camera lenses in
mobile camera modules, and a few other items will be provided to encourage domestic
production of high-growth electronic products.
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Chemicals:
o Duty on certain vital chemicals, such as methanol, acetic acid, and heavy feed stocks for
petroleum refining, is being decreased; duty on sodium cyanide, for which ample domestic
capacity exists, is being raised - this will help boost domestic value addition.
MSME:
o The customs tax on umbrellas has been hiked to 20%. Parts of umbrellas that are being
discontinued are exempt.
o Exemptions for agri-sector implements and instruments manufactured in India are being
rationalised.
o Last year's customs duty exemption for steel scrap was extended for another year to help
MSME secondary steel makers.
o Certain anti-dumping and countervailing duties on stainless steel and coated steel flat
items, alloy steel bars, and high-speed steel are being cancelled in order to address the
current high metal prices in the public interest.
Exports:
o Exemptions are being offered on embellishment, trimming, fasteners, buttons, zipper,
lining material, selected leather, furniture fittings, and packaging boxes to encourage
exports.
o To increase shrimp aquaculture exports, duties on certain inputs are being cut.
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Ms. Nirmala Sitharaman, Union Minister for Finance presented the Union Budget 2022-23 in the
Parliament on February 1, 2022. The key highlights of the Union Budget 2022-23 are as follows:
the next fiscal did not propose any major income tax changes, besides a push
to make the tax filing process more compliant.
Debt market woes: With the government plan to borrow more in the next fiscal,
it is expected to widen the fiscal deficit further. This is likely to put more
pressure on the bond market and the RBI may need to step in for a balancing
act.
Not much for rural economy: Before the budget, many economists had asked
the government to prioritise spending on infrastructure development and
alleviating the difficulties of the poorer population in rural India through direct
fiscal measures. However, the government has cut back the budgetary
allocation for rural development, including the MGNREGA, spending for rural
roads and pension for widows, by 10% to Rs 1.95 lakh crore.
Other Misses: The Finance Minister failed to give account of what happened to
all the targets set up for employment, smart cities, Skill India, double income of
farmers, relief to poor and middle income groups, improvement in health
infrastructure etc.
Conclusion
To sum up, the Budget for 2022-23 is a bold effort at public investment-led growth. The
widely discussed concerns of the unemployment crisis, fall in the share of private
consumption in GDP, and rising economic inequality (caused by the pandemic and the
lockdown) could have been tackled in a better manner with specific initiatives. So, the
ultimate outcome of the initiatives introduced in the budget will depend on the timely
release of the funds, money spent for the purpose it was sanctioned and effective
assessment of the plans.
Soruce:
Budget 2022: Significant Agricultural Reforms for Resilient Growth and Recovery:
Union Budget 2022 | Medium Wave:
Union Budget 2022 | Trade unions term it ‘anti-people’:
A growth-oriented, pragmatic Budget 2022: