New Union Budget Highlights 2022-2023

 

Finance Minister Nirmala Sitharaman presented the union budget 2022 for the upcoming fiscal year on Tuesday, 1st February. The new union budget, worth INR 39.45 lakh crore, outlines government expenditure for the year and is expected to spend 4.6% more than last year. The budget focuses on infrastructure spending, including the expansion of national highways and the generation of several hundred new trains. The idea is to help with job creation and boost economic activity. While there was a lot of news on income tax brackets in the run-up to the budget announcement, the finance minister has not proposed any changes to the tax slabs or basic tax deductions for individuals. During the union budget announcement, the finance minister projected the country’s economy to grow by 9.2%, the fastest of all growing economies.

Key Highlights of Union Budget FY 2022-2023

Let’s take a look at the highlights of the union budget and how it affects various sectors:

Union Budget on Economy

• Capex target increased from INR 5.54 lakh crore to INR 7.50 lakh crore, an increase of 35.4%
• Emergency Credit Line Guarantee Scheme (ECLGS) cover increased to INR 5 lakh crore
• Investment intentions worth INR 30 lakh crore received for productivity-linked incentive schemes in 14 sectors
• States allows fiscal deficit of up to 4% of GSDP
• Public investments and capital spending boost economic recovery

Union Budget on Taxes

• One-time window of two years provided to correct any omissions to filed ITRs
• Cess or surcharge on income to be excluded from business expenditure
• Surcharge on long-term capital gains capped at 15%
• Tax deduction limit on employer’s contribution to the NPS accounts of state government employees increased to 14%
• Alternate minimum tax for cooperative societies reduced to 15%
• Surcharge on cooperative societies that earn between INR 1 crore and INR 10 crore reduced to 7%
• 30% tax on transfer of digital assets and no deductions allowed for the same

Union Budget on Duties on Industry

• Import duty for specific chemicals reduced
• Exemption on custom duty for steel scraps extended for another year
  
• Customs duty on stainless steel, high steel bars and flat products revoked
• Additional duty of INR 2 per litre on unblended fuel
• 5% reduction on import duty for cut and polished diamonds and gemstones
• Sawn diamond import duty reduced to nil
• Custom duty concessions allowed for consumer electronics such as wearables, mobile phone components and hearing aids to promote manufacturing

Union Budget on Employment

• ECLGS extended until March 2023 to help create 60 lakh jobs in 5 years
• Digital ecosystem for livelihood and skilling to be launched to help skill, reskill and upskill citizens via online training and help find relevant job opportunities
  

Union Budget on Infrastructure and Manufacturing

• Digital infra to get boost from DESH STACK e-portal launch
• Contracts for four multi-modal national parks to be awarded
• 100 PM Gati Shakti terminals will get set up in three years
• Masterplan for expansion of national expressways under PM Gati Shakti plan to be outlined
• Concessional corporate tax rate of 15% extended until March 2024 for new manufacturing companies
  

Union Budget on Digital Currency

• Blockchain-based digital rupee to be launched
• 30% tax levied on income from virtual digital assets
• Losses from the sale of virtual digital assets cannot be offset against other income
  

Union Budget on Housing and Urban Planning

• 80 lakh houses to be completed for beneficiaries of PM Awas Yojana
• INR 48,000 crore set aside for PM Awas Yojana
• INR 60,000 crore to be used to provide tap water to 3.8 crore households
• High-level committee of urban planners and economists to be formed to provide recommendations on urban planning, building and governance
  

Union Budget on MSMEs and Start-upsr

• Programme to rate MSMEs costing INR 6,000 crore to be rolled out over the next five years
• Udyam, e-shram, NCS and Aseem portals to get interlinked and scope will be widened to provide credit facilitation and other services that enhance entrepreneurial opportunities
• Start-ups in agriculture and rural enterprises to receive finance through NABARD for the farm produce value chain
• Expert committee to be set up to suggest measures to attract investments
• Tax benefits for start-ups, including redemption for three consecutive years, extended for another year
  

Union Budget on Agriculture

• Government will procure INR 2.37 lakh crore worth of wheat and paddy under MSP operations
• Year 2022-2023 announced as Year of Millets
• Railways to help develop new products for small farmers and MSMEs
• Rationalised scheme introduced to increase domestic production of oilseed
• Kisan drones to be used for assessment of crops and spraying of insecticides and to keep land records
• INR 44,605 crore set aside for new Ken-Betwa river-linking project
• Draft Detailed Project Reports (DPRs) finalised for five river-linking projects
• Paperless e-bill system to be launched by ministries for procurement
• Farmers taking up agro-forestry to receive financial support
• Natural farming to be promoted along the River Ganga corridor
• Focus on sustainable agricultural productivity and promotion of chemical-free natural farming
  

Union Budget on Electric Vehicles

• Framing of battery swapping policy at EV charging stations 
• Private sector will be encouraged to build innovative and sustainable business models in the battery and energy sector to improve efficiency
  

Union Budget on Education

• Agricultural university syllabus to be revised by states to meet the needs of natural, modern-day and zero-budget and organic farming
  
• PM eVIDYA One Class, One TV channel programme to be expanded to 200 channels to provide education in regional languages for classes 1 to 12
• Digital university based on hub and spoke model to be set up
• National Skill Qualification Framework (NSQF) set up to cater to dynamic industry needs
  

Union Budget on Finance

• INR 1 lakh crore assistance for states in 2022 to 2023 to boost investments
  
• Introduction of digital rupee to start
• All post offices brought under core banking system to enable quick transfer of funds and easy banking facilities
• Enhancement of resolution process efficiency through IBC amendments
• Digital payments encouraged by setting up 75 digital banks in 75 districts
• For government procurement, surety bond can be used in place of a bank guarantee
• Faster dispute resolution will be offered by setting up an international arbitration centre in GIFT city
• Once parents or guardians of dependent differently abled individuals reach the age of 60, annuity and lump-sum payments will be offered to the differently-abled dependents
• World-class university free from domestic regulation allowed in GIFT IFSC
  

Union Budget on Healthcare

• Launch of open platform for national digital health ecosystem containing registries of health providers and health facilities
• Significant progress seen in health and infrastructure in 95% of 112 aspirational districts
• National Tele Mental Health Programme launched to promote good mental health
  

Union Budget on Telecom

• Spectrum auction for the rollout of 5G to be conducted in 2022
• Design-led manufacturing scheme for 5G ecosystem to be launched as part of PLI scheme for affordable broadband and mobile communication in remote areas
• 5% of USO fund to be utilised for technology upgradation and research and development
• BharatNet project to award contracts to lay optical fibre in villages in 2022-2023
• Energy storage systems and data centres given infrastructure status to ease funding
  

Union Budget on Women and Children

• Three schemes launched for integrated development of women and children and to recognise the importance of Nari Shakti
• Two lakh anganwadis to be upgraded to improve child health
  

Union Budget on Business

• 1,486 union laws and 75,000 compliances repealed to ease the way for businesses
• Ease of Doing Business (EODB) 2.0 launched along with Ease of Living
• Voluntary corporate exit timeline cut from two years to six months
• New legislation to replace Special Economic Zones
  

Union Budget on Defence

• Government committed to self-reliance and cutting down imports
• 68% of capital expenditure for defence sector kept aside for local industries
• 25% of defence R&D budget set aside for industry, start-ups and academia
• Private sector encouraged to design and develop military platforms and equipment through SPV model with DRDO
  

Union Budget on Transportation

• 400 new-age Vande Bharat trains to be manufactured over three years
• National highway networks to be expanded by 25,000 kilometres in 2022-2023 costing INR 20,000 crore
• Railway allocated INR 1,40,367.13 crore
• 2,000 kilometres of the rail network brought under KAWACH for enhanced safety and to boost capacity
• One product one railway station to be popularised

Union Budget on Climate & Net Zero

• Government prioritises energy transition and action on climate
• Funds to be used on projects that will reduce the economy’s carbon intensity
  
• Sovereign green bonds, a part of the government’s borrowing scheme in FY2023, will help fund green infrastructure projects
• Set up of 4 pilot projects for coal gasification
• Additional allocation of INR 19,500 crore to manufacture high-efficiency solar modules
• Boost to employment opportunities with low carbon development strategy
  

Union Budget on Travel

• ePassports with embedded chips to be rolled out in 2022-2023 for convenient travel

Also Read: Union Budget of India: What is it and Why is it So Important?

What Are VirtualDigital Assets?

As per the new proposed clause in the Finance Act, a virtual digital asset is any code, information, token or number, that is not Indian or foreign currency, and is generated through cryptographic means. Anything that provides digital representation of value and can be exchanged is a virtual digital asset. The definition includes non-fungible tokens and other tokens of a similar nature.

Impact of the Union Budget on Virtual Digital Assets

During the union budget speech, the finance minister noted the increase in virtual digital assets and subsequent transactions. Given the information and news on virtual digital assets, budget 2022 India states:

• 30% tax on income from the transfer of a virtual digital asset, which includes cryptocurrencies and non-fungible tokens
  
• Losses from the transfer of digital assets cannot be offset against other income
• Individuals cannot claim any deductions while computing their income tax, except for the cost of acquisition
• TDS of 1% on payments made for the transfer of assets

List of Items That Will Become Cheaper and Costlier in FY 2022 - 2023

Items Set to Become Cheaper	Items Set to Become Costlier
Clothes	Unblended petrol and diesel
Mobile phones	Headphones and earphones
Mobile phone chargers	Umbrellas
Camera lenses for mobile phones	Loudspeakers
Wearable tech like Smartwatches	Imitation jewellery
Hearing aids	Solar cells and solar modules
Farming tools	X-ray machines
Smart metres	Parts of electronic toys
Asafoetida
Cocoa beans
Frozen mussels
Frozen squid
Gemstones and diamonds
Acetic acid
Methyl alcohol
Steel scrap
Chemicals required in petroleum products

 

Source:

https://www.livemint.com/budget/union-budget-2022-what-gets-cheaper-and-what-s-costlier-11643698897108.html

https://economictimes.indiatimes.com/news/economy/policy/union-budget-2022-speech-highlights-will-sitharaman-live-up-to-indias-expectations/articleshow/89261195.cms?from=mdr

ARN: ED/02/22/27483