Union Budget 2022: Highlights at a glance- aimed at shaping a better India
The Union Budget 2022-23 was presented in the parliament by our honourable Finance Minister Nirmala Sitharaman. The government has proposed for the expansion of highways through 5 big infrastructure projects in the country by 25,000 km. Around Rs, 60,000 crores have been allocated to the Nal se Jal scheme which includes 5 river linked projects across various states. To boost the infrastructure development in the northeast zones, an additional amount of Rs 48,000 crore has been implemented under the PM housing scheme.
As per the auction of the 5G spectrum in 2022, our Finance Minister has proposed setting up 75 digital banking units across 75 districts. Another noteworthy announcement on the development of a national programme for mental health that has worsened with the ongoing Covid-19 pandemic around must be developed.
Virtual currencies like non-fungible tokens and cryptocurrency have been bought under the tax net. Also, an announcement of a new scheme in the Public-Private Partnership (PPP) model for the delivery of digital and hi-tech services to farmers shall be undertaken.
A new fund will be set up with a blended capital structure to finance startups for various rural enterprises and agricultural works. Thus, the Agri Budget is harvesting new hopes along with the launch of ‘Kisan Drones’.
There has been a push for zero-budget natural farming to be made a part of the curriculum in the syllabus of agricultural universities. Our PM Narendra Modi has enforced such a concept through the Union Budget on 1st Feb 2022 and also mentioned that all agricultural universities shall be encouraged to teach these to their respective students. Pushing such a concept will act as a spontaneous initiative to recreate a more sustainable farming vocation as well as improvise their earnings by curbing input costs, in addition to other fields such as improved product returns and better market access to the farmers.
Another aspect of the Union Budget focuses on the education of regional language promoting the growth of new digital universities along with their skilled courses. Ms Sitharaman has announced the setup of a digital university that will be able to access world-class education to Indian students. This system of digital learning will pose an effect on the prolonged closure of schools affecting the student’s academic performance. Digital universities will now be imparting lessons in all regional languages creating a core network of connectivity and communication. These universities will collaborate with other central universities in India to aid them with proper digital training and infrastructure.
The electronic sections will show a sharp dip in prices. Also, certain other commodities like cocoa, beans, umbrellas, imitation jewellery, earphones and polished diamonds will see a rise or dip in their prices depending on their extent of marketing.
The Ministry of Home Affairs has played a significant role in the budget by enhancing the capital expenditure by 11% for Jammu & Kashmir border to get their higher allocation. Compared with the last Union Budget where only Rs 1.66 lakh crore was allocated for the J&K border, this year the amount has increased to Rs 1.85 lakh crore. There has been a 10% growth for armed forces in capital outlay. India’s domestic defensive industry will make a definitive push by earmarking over two-thirds of the capital outlay from domestic defense manufacturers. This is nearly a massive 10% jump compared to the last year’s budget. In her budget presentation, the Finance Minister has also announced that regarding capital expenditure there is going to be a sharp jump of 35.4% for various essential government projects. The government will invest around Rs 7.50 lakh crore as capital expenditure for various infrastructure projects. There is likely to be extended coverage for the next fiscal under The Emergency Credit Line Guarantee Scheme (ECLGS). With an expanded guarantee cover of Rs 5 lakh crore, the budget shall be put forward.
The government is launching the Digital Rupee – a Central Bank Digital Currency (CBDC) under the Reserve Bank of India. This will be supported by block chain technology. The introduction of a Digital Rupee in the 2022-23 fiscal year is likely to impose a tax of 30% on virtual assets.
IT Returns have been revised for errors and mistakes including non-reported declared incomes. The changes are executed through a one-time window up to two years from the end of the assessment year on tax payment. Any long-term capital gain is showing an increase with its apex at 15% of transfer surcharge. There has been a reduction in the Minimum Alternate Tax rate for cooperatives to bring some parity with other corporates at 18.5%. The budget has extended the timelines for benefits under the regime of the new corporate tax. Now, newly incorporated manufacturing companies will have to bear a 15% corporate tax rate till 31st March 2024.
Taxing of virtual assets has been fixed at 30% and it cannot be mentioned as a replacement of any other income. Payments made using digital assets will incur a charge of 1% TDS to keep transactions on track. This will in turn bring virtual assets under the government’s recognition and shift the government’s plan on banning private cryptocurrencies by many folds. Bitcoin, the most trusted cryptocurrency for trading will also be levied at a 30% tax rate. Thus, investors will be provided with the much-needed clarity for various cryptocurrencies.
The Economic Survey has analyzed some crucial aspects of the last year’s pandemic such as global liquidity measures, inflation and surging energy prices risking the economic structure. Thus, the stock of growing revenues to indicate the availability of fiscal space should be aided by additional support from our government. A recent survey will be on the verge of collecting information about the widespread vaccine coverage, gains from supply-side reforms and comfortable regulations with robust export growth will excel up the capital spending.
Sitharaman has also pointed out that the government has offered fiscal space through buoyant tax revenues to hold the country’s economy. Although the output in various intensive industries descended their growth rate below pre-pandemic levels, the macroeconomic strength will now buffer up the stresses by withdrawing such stimulus by global central banks.