The Finance Minister of India, Nirmala Sitharaman presented the ‘paperless’ Union Budget 2022-23 India, today at the parliament. The budget primarily focused on infrastructure, healthcare, and rural demand, along with a focus on ‘Amrit Kaal’, the next 25 years. Here, the government aims to meet the vision set by the Prime Minister for India@100 from 75, keeping up with strong growth across several sectors, supported with sped-up vaccination programs for the COVID pandemic.
Here are the key highlights from India’s Union Budget 2022-23:
- The country’s growth is expected to be by 9.27 in the upcoming financial year.
- The target for the fiscal deficit is 6.4% of the GDP for FY23.
- The fiscal deficit for FY22 is 6.9%
- Production Linked Incentive (PLI) Scheme promises an addition of 30 lakh crore production in the next years, taking ahead of the goal of Aatma Nirbhar Bharat.
- The expectation of 6 million new jobs is from the ‘Make in India’ campaign.
- LIC IPO will come in soon, along with others.
- The strategic transfer of Air India ownership has seen the light of the day.
- Digital Rupee by RBI will be out soon in 2022-22. And this is a clear recognition of blockchain technology.
Roads and Railways
- National Highway network to expand in 2022-23 by 25,000 km. The intention is to expand the network by 15% in the next fiscal, which is a welcome sign for road construction companies.
- ‘Parwatmala’ to be taken in PPP modes for conventional roads in hilly areas.
- Railways to come up with logistics for enterprises and small farmers. It will aim at ‘one station, one product’ to facilitate the local product transport and supply. Here, the PM Gati Shakti program will encompass the development of 100 cargo terminals in the next few years.
- The PM Gati Shakti will also look for speedier commencement and implementation of development projects such as 7 engines for multi-modal connectivity. Technology will be used to move goods and people faster with a funding of Rs. 20,000 crores for this project.
- 400 Vande Bharat trains over the next 3 years.
Agriculture and Rural Enterprise
- For the wheat, in Rabi season 2021-22, procurement and the same for paddy in Kharif for 2021-22 aim to cover 1208 lakh metric tonnes of paddy and wheat from 163 lakh farmers.
- Here, the farmers will receive in all Rs. 2.37 lakh crores as a direct payment to their accounts against the MSP value.
- NABARD will facilitate funding from a co-investment model to finance start-ups in the rural and agriculture sector for the farm product value chain.
- The comprehensive package was announced for farmers to encourage natural farming. This is for the participation of MSMEs and State governments.
- Digitalization of land records, Kisan drones for crop assessment, spraying of nutrients and insecticides, and revision for the syllabi of agricultural universities.
- The government will provide support for the value addition of millets.
- Domestic productivity of oilseeds will receive encouragement.
- Ken Betwa Linking project to be implemented. The approximate cost for the same is Rs. 44,605 crores. This includes an estimate for drinking water supply to 62 lakh people, irrigation benefit of up to 9.0 lakh hectare farmland, 27 M2 solar power generation, and 103 MW hydropower.
Simplified Tax System
- Individuals can file an updated IT Return within 2 years of filing the last IT Return.
- Surcharge reduced to 7% from 12% for cooperative societies who have income less than Rs. 1 crore.
- Reduction to 15% from 18.5% in the alternate minimum tax for cooperatives.
- Also, there has been a reduction in the tax deduction limit from 18% to 15% for central government employees for their contributions to NPAs.
- Extension by one more year for start-ups has benefitted from redemption in taxes for 3 consecutive years.
- Virtual digital assets will attract 30% tax with 1% TDS on the transfer of these assets.
- A concession of 15% income tax before March 31, 2023, for new manufacturing companies. They will now receive a year more to resume operations.
Education, Skill Programs, Energy, and Others
- The government will launch National Tele Mental Health Program for mental health counseling.
- It will also develop a digital university to offer access to education that meets ISTE Standards to students.
- An increase in ‘One Class One TV Channel’ from 12 to 200 for supplementary education for classes 1-12 in regional languages.
- Digital DESH e-portal for skilling, upskilling, and reskilling of youth.
- Extension for ECGL service for hospitality sector by March 2023 and an addition of Rs. 50,00 cover so that small and medium sectors in hospitality services can bounce back.
- ePassports for the convenience of overseas travel to be rolled out in 2022-23.
- Encouragement for the private sector for the creation of innovative and sustainable business models for energy and battery as a service for the improvement of the EV ecosystem.
- Gaming firms will receive a talent boost through the promoted task force. There will be an open platform for India’s digital health ecosystem. The center also vouches for a clean energy push.
- Excise duty of Rs. 2 per liter on unblended fuel will apply from October 1.
- Carbon dioxide savings of 38 mmt every year is expected from 5.7% biomass pellets to be co-fired at thermal power plants.
- Formulation of Battery Swapping Policy along with inter operational service.
- For ease of living and doing business, the establishment of ‘One Nation, One Registration’ from anywhere.
Urban Development and Real Estate
- To boost urban capacity building, the government will launch town planning schemes, modernization of buildings by-laws, and implement transit-oriented development.
- An outlay of Rs. 250 crores for the establishment of Centres of Excellence aimed at urban sector development.
- Allocation of Rs. 480 billion for PM Housing Scheme in FY23.
- In FY23, the increased limit for Capex allocation in real estate by 35% (7.5 trillion)
Capital Expenditure, Capital Procurement, and Financial Support
- The revised estimate is Rs. 6.3 lakh crore for capital expenditure.
- 19,500 crores dedicated for PLI for the manufacture of high-efficiency modules for polysilicon.
- For armed forces, the government will procure 68% of the capital budget from domestic industry in 2022-23, which is a boost from 58% seen in 2021-22.
- The states will get Rs. 1 lakh crore in helping with investment in India’s economy. They will receive the loans with no interest to be paid in 50 years. The facility is over and above the normal borrowing by the states.
- Farmers who wish to take up agroforestry will get financial support from the government.
- To reduce carbon footprint, Sovereign Green Bonds will be issued in the public sector projects.
- The outlay for capital expenditure is Rs. 7.50 lakh crore for 2022-23. This is a 35.4% increase as compared to the previous year.
Customs Duty and Administration
- 5% tariff on capital goods and project imports for conducive growth in the domestic sector. But specific exemptions on advanced machinery manufacturers outside the country may continue.
- Custom administration of SEZs will be IT-driven completely. It will be available on the Customs National Portal. The same will be implemented by 30 September 2022.
- More than 350 exemptions entries will be phased out. For instance, fabrics, medicines, chemicals, particularly agricultural products, medical devices, will have enough domestic capacity.
- A few exemptions are applicable on inputs such as ball screw, specialized castings linear motion guide, etc. This will promote the manufacturing of capital goods in India.
- No customs duty on a simply sawn diamond. Customs duty reduced to 5% on cut and polished gemstones and diamonds.
- Customs duty of Rs. 400 per Kg at least to be paid on the import of imitation jewelry.
- To promote the export of jewelry on e-commerce, the government will come up with a simplified regular framework by June 2022.
- Duty concessions for the camera lens of a mobile camera module, parts of mobile phone charger transformer.
- Exemptions on steel scrap last year get a one-year extension to provide more relief to MSME secondary steel producers.
- Customs duty rates adjusted to offer a graded rate structure. The intention being promoting domestic manufacturing of hearable and wearable devices, and electronic smart meters.
- Customs duty raised to 20% on umbrellas. Also, exemptions on the same are withdrawn.
- Reduction on Customs duty for chemicals such as acetic acid, heavy feedstocks for petroleum, and methanol.
- Customs duty hiked for sodium cyanide, for which the country has sufficient domestic capacity.
- Duty reduced on particular inputs for shrimp agriculture.
- Incentives in exports, exemptions on items such as trimming, embellishment, packaging boxes, buttons, lining material, fasteners, zipper, furniture fittings, and specified leather.