Finance Minister Nirmala Sitharaman presented the Union Budget for 2022-’23 on Tuesday with the ambition of fostering strong economic growth through public investment.
The government’s total expenditure for financial year 2022-’23 is estimated at Rs 39.45 lakh crore and the total revenues are pegged at Rs 22.84 lakh crore. The total borrowings for the next year is estimated at Rs 11,58,719 crore, the finance minister said.
The amount is about Rs 2 lakh crore higher than the current year’s Budget estimate for borrowings of Rs 9.7 lakh crore.
The Budget focused on digital currency, large infrastructure projects and small businesses, among other things.
Here are some of the major announcements:
- Digital rupee and crypto tax: The Reserve Bank of India will issue a new digital rupee using blockchain and other technologies during the financial year 2022-’23. A tax of 30% will be imposed on any income from the transfer of digital assets. This will have an effect on gains from cryptocurrency and non-fungible tokens. However, the digital rupee will not be taxed at 30%.
- Loan guarantees for small and medium businesses: The Centre has decided to extend the Emergency Credit Line Guarantee Scheme till March next year. The allocation for the scheme aimed at providing credit to micro, small and medium-sized businesses, or MSMEs, will be expanded by Rs 50,000 crore to Rs 5 lakh crore. Initially, government-guaranteed loans worth Rs 3 lakh crore in all were to be provided to enterprises under the scheme.
- Fiscal deficit target accomplished: India’s fiscal deficit settled at 6.9% of the Gross Domestic Product in financial year 2021-’22, breaching the target of 6.8% of the GDP. The finance minister said that for the next financial year of 2022-’23, the government would aim to limit the deficit between its earnings and spending to 6.4% of the GDP.
- Extended window for updating tax returns: Citizens can now file updated returns within two years of the end of the relevant assessment year. The measure was particularly formulated to allow taxpayers to correct any omission or mistakes made while estimating their tax.
- Increase in tax deduction limit for states employees: The finance minister proposed that the tax deduction limit of state government employees should be increased from 10% to 14%. She said that the proposal would help the social security benefits of state government employees and bring them at par with central government staff.
- Gati Shakti: The Gati Shakti project is driven by seven engines including roads, railways, airports, ports, mass transport, waterways and logistics infrastructure. The Centre will expand the national highway network by 25,000 km in 2022-23 under the master plan.
- 5G rollout plan: The auction of 5G spectrum will be conducted in 2022 to enable private players to roll out telecom services. The government will also give contracts for laying optical fibre in villages through the public-private partnership method in 2022-’23. The process is expected to be completed by 2025.
- Centre to promote Kisan drones: The government will promote the usage of “Kisan drones” to assess crops, digitise land records and spray insecticides and nutrients. The Centre will also promote chemical-free farming. The focus will be on farming land within 5-km-wide corridors along with the River Ganga in the first stage.
- E-passports to be issued from 2022: The government will roll out e-passports for convenient overseas travel in 2022-’23. The e-passports will use embedded chips and futuristic technology. The government currently issues passports in the form of printed booklets.
- Boost for defence sector: To reduce imports and promote self-reliance in equipment of Armed Forces, 68% of the capital procurement budget will be set aside for the domestic defence industry. The finance minister said that private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with Defence Research and Development Organisation. Also, 25% of the defence research and development budget will be opened for industry, startups and academia.
- Mental health centres to be set up: The government will launch a network of 23 tele mental health centres across the country. They will help ease access to quality mental health counselling and care services. Bengaluru-based National Institute of Mental Health and Neurosciences, or NIMHANS, would be its nodal centre. The International Institute of Information Technology in Bengaluru will provide technological support for the mental health programme.
- Rural job guarantee budget slashed: The Centre allocated Rs 73,000 crore for Mahatma Gandhi National Rural Employment Guarantee Act, or MGNREGA – 25% lower than 2021’s revised estimates.
- ‘Little for the middle class citizens, poor,’ say Opposition leaders: Leaders of the Opposition parties criticised the Union Budget, saying the Modi government had done little for the poor and middle-class citizens, who had been worst affected by the pandemic. They said that the problems raised by farmers were not considered. Many politicians also highlighted the concerns over unemployment.