BUDGET 2022 HIGHLIGHTS

BUDGET 2022 HIGHLIGHTS

Finance Minister, Mrs. Nirmala Sitaraman rises at 11.02 a.m. to present the fourth Union Budget of the NaMo-NiSi Team of the current Government.

General Proposals:

  1. India’s growth estimated to be at 9.2%, highest among all large economies
  2. LIC public offer will be done shortly.
  3. Strategic ownership of Air India has been completed.
  4. Strategic partner has already been selected for sell-out of Neelanchal Ispat Nigam.
  5. Government’s goal is complementing macro-growth with micro-all-inclusive welfare, digital economy and fin-tech, tech-enabled development, energy transition and climate action.
  6. Focus areas of Budget; PM Gati Shakti which will include:

Inclusive Development

Productivity Enhancement

Sunrise Opportunities

Energy Transition

Climate Action

Financing of investments

7. Under the PM Gati-Shakti Plan

Masterplan will encompass the seven engines of economic transformation

Masterplan for expressways will be formulated in next financial year

The National Highway network will be expanded by 25,000 kms in 2022-23

Four multi-modal national parks contracts will be awarded in FY23

8.  Focus on public investment to modernize infrastructure over the medium term, leveraging tech platform of Gati Shakti via a multi-modal approach.

9. Boost for Railways under the Gati Shakti Plan

400 new-generation Vande Bharat trains will be developed and manufactured in next 3 years.

One station, one product’ concept will be popularised to help local businesses.

India plans 100 cargo terminals in 3 years

  1. PLI schemes in 14 sectors with potential to create 60 lakh new jobs, and additional new production of INR 30 lakh crore
  2. Chemical free natural farming to be promoted.
  3. Year 2023 to be promoted as the year of millets; drones to be installed for agriculture monitoring.
  4. Five river linking projects have been finalised.
  5. MSME Portals’ scope to be widened and interlinked.
  6. MSME guarantee cover expanded by INR 15,000 crores; ECLGS to be extended up to March 2023
  7. Credit Guarantee Trust scheme to get more funds.
  8. For the education sector

States will be encouraged to revise syllabi of agricultural universities to meet needs of natural, zero-budget & organic farming, modern-day agriculture

One class, one TV channel’ program of PM eVIDYA will be expanded from 12 to 200 TV channels.

This will enable all states to provide supplementary education in regional languages for classes 1 to 12.

  1. Drone Shakti as a service for start-ups.
  2. For the farmers

Chemical-free natural farming to be promoted in India

Use of Kisan drones will be promoted for crop assessment, digitization of land records, spraying of insect pesticides.

INR 2.37 lakh crore worth of MSP direct payments to wheat and paddy farmers

  1. Rationalised and comprehensive scheme to be implanted to reduce reliance on oil seed imports
  2. Three missions focussing on Nari Shakti launched.
  3. INR 16,000 crores for providing access to tap water to 3.8 crore homes.
  4. National Health Register to be rolled out.
  5. Digital Push:

Digital ecosystem for skilling and livelihood will be launched.

This will aim to skill, reskill, upskill citizens through online training. API based skill credentials, payment layers to find relevant jobs and opportunities

An open platform for the national digital health ecosystem will be rolled out.

  1. Data exchange among all-mode operators to be brought on Unified Logistics Interface Platform; This will

Enable efficient movement of goods

Reduce logistics costs and time

Assist Just-In-Time inventory management

Eliminate tedious documentation

  1. The issuance of E passports using embedded ship and futuristic technology will be rolled out in 2022-23 to enhance the convenience for the citizens in their overseas travel
  2. New Battery swapping policy to be introduced with interoperability standards to boost EV ecosystem. More charging stations to promote EV.
  3. One Nation – One Registration to be promoted.
  4. A high-level committee for urban planners and economists to be formed for recommendations on urban capacity building, planning implementation, and governance.
  5. Amendments for the Bankruptcy Code

IBC amendments to enhance efficiency of resolution process

Facilitate cross-border insolvency resolution

To speed up voluntary winding up of companies

  1. Scheme for design led manufacturing to be launched for 5G ecosystem as part of PLI scheme to enable affordable broadband and mobile communication in rural and remote areas.
  2. For a self-reliant defence sector

Defence R&D will be opened up for industry, start-ups and academia with 25% of defence R&D budget.

Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.

68% of capital procurement budget in defence will be earmarked for domestic industry in 2022-23

  1. Allocations for PM Awas Yojana

60,000 houses will be identified as beneficiaries for PM Awas Yojana in rural & urban areas.

INR 16,000 crore allocated for providing access to tap water to 3.8 crore households

In 2022-23, 80 lakh households will be identified for the affordable housing scheme

  1. Contracts for laying optical fibre in villages to be awarded under Bharat-Net project under PPP in 2022-23
  2. National Ropeways Development Programme to be taken up in PPP mode with the aim to improve connectivity, besides promoting Tourism
  3. Digital rupee, using block chain, to be launched by RBI in 2022-23
  4. India to launch sovereign green bonds

Funds will be used for projects that will help reduce carbon intensity of the economy.

Sovereign green bonds will be part of government’s borrowing programme in FY 23.

Proceeds are to be deployed in public sector projects.

  1. Capital expenditure is being stepped up to INR 7.5 lakh crore.
  2. Budget estimates for 2022-23; Total expenditure estimated at INR 39.45 lakh crores, total income (other than borrowings) estimated at INR 22.84 lakh crores.
  3. Revised fiscal deficit is estimated at 6.4% of GDP for 2022-23
  4. In 2022, 100% of 1.5 lakh post offices will come on core banking system. Post Office customers to get access to net banking, ATMs and more
  5. With Post Office netbanking facility in all branches, account holders will be able to make online deposits in PPF, NSC and other accounts

Direct Tax proposals:

  1. New provision to file updated return if anything is missed out by assesse in the original return; can be filed within 2 years of the relevant assessment year.
  2. Reduced Minimum Alternative Tax for co-operatives from 18% to 15% to be in in par with corporates, and surcharge to be reduced from 12% to 7% for co-operatives having income from INR 1 crores to INR 10 crores.
  3. Payment of annuity to the guardians of differently abled
  4. Increase the tax deduction limit of employees’ contribution to pension scheme to 14% from 10% for state government employees to be in par with central government employees.
  5. Tax incentives to eligible start-ups extended for one more year up to 31st March, 2023.
  6. To opt for Concessional tax rate under sec 115AB, sunset has been extended up to 31 March 2024 from current 31 March 2023
  7. Any income from transfer for any virtual digital asset will be charged at 30% without any deduction other than cost of acquisition.
  8. Loss on sale of virtual digital assets (read: including cryptocurrencies) will not be allowed to be set-off against any other income.
  9. TDS @ 1% on transfer of virtual digital asset transfer above a threshold limit; Gift of virtual digital assets will be taxed in the hands of the recipient.
  10. To opt for Concessional tax rate under sec 115AB, sunset has been extended up to 31 March 2024 from current 31 March 2023

Indirect Tax proposals:

  1. The gross GST collections for the month of Jan 2022 was INR 1,40,986 crores, which is the highest since the inception of GST.
  2. Few changes suggested in the customs tarriff.

 

Sanjay Thampy

FCA, Grad. CWA, CS, DBM

sthampyca@gmail.com

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