Finance Minister Nirmala Sitharaman presented the second paperless Union budget speech today. It started at 11:00 am in the Parliament and lasted for 92 minutes.
A 9.2% growth in the GDP is expected in FY22 to be above pre-pandemic levels. The fiscal deficit is estimated at 6.9%. For 2022-23, the total expenditure has been pegged at ₹39.45 lakh Cr and receipts at 22.84 lakh Cr.
The Centre will borrow ₹11.6 lakh crores from the market to meet its expenditures. Capital expenditure holds the key to speedy and sustainable revival, therefore, the government announced a sharp jump of 35.4% to 7.5lakh crores.
The Top four Priorities of the Union Budget 2022-23
Finance Minister Nirmala Sitharaman, while presenting the Union budget said that she is laying four major priorities: PM Gati Shakti, inclusive development productivity, enhancement and investment, sunrise opportunities energy transition, climate action and financing of investments.
Here are a few announcements from the budget:
Cryptocurrencies, NFTs come under tax net
- The Union budget has proposed taxing virtual assets, at 30%.
- TDS of 1% to be charged further on payments made using digital assets.
- Gifts of virtual digital assets will be taxed in the hands of the recipient.
- Losses are not allowed for set-off.
- The Government hasn’t banned cryptocurrencies yet.
Digital Rupee will be introduced
- The government has announced the introduction of the Digital rupee.
- It will be based on blockchain technology.
5G mobile services rollout
- 5G mobile services will be rolled out in major cities in 2022-23.
- They include Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Ahmedabad and Hyderabad
- Trials are going on, but the auction of the %G spectrum is yet to take place.
Change in employees’ tax deduction limit, corporate surcharge
- The employees’ tax deduction limit has been increased from 10% to 14%.
- The corporate surcharge will be reduced from 12% to 7%.
Revision in IT Returns
- Tax returns can be revised for omissions and mistakes through a one-time window.
- Assesses can declare income that they missed out on earlier.
- This window will remain open for two years from the end of the assessment year on payment of tax.
Revision in basic tax and surcharge
- No changes in personal income tax.
- 15% corporate tax for newly incorporated manufacturing companies has been extended till March 31st, 2024.
- Surcharge on the transfer of LTCG (long term capital gains) has been capped at 15%.
- Surcharge on unlisted shares has been reduced from 28.5% to 23%.
- Health and Education Cess: any surcharge or cess on income, profits not allowable as business expenditure
Investment in BSNL
- The government will infuse ₹44,720 crores into its state-owned, loss making firm BSNL.
- This investment is towards the 4G spectrum, technology up-gradation and restructuring BSNL.
- Apart from the capital infusion, additional funds of ₹7,443.57 crores will be provided for a voluntary retirement scheme and ₹3,550 cr for grant in aid for payment of GST.
Vande Bharat Trains
- 400 new Vande Bharat trains will be developed and manufactured over the next three years.
- New products will be introduced by the Railways for the benefit of small farmers and MSMEs.
Kisan drones, chemical free natural farming
- The Centre will promote Kisan Drones, chemical-free natural farming, public-private partnerships for the delivery of digital and high-tech services to farmers across the country.
- These drones will be used for crop assessment, digitisation of land records and spraying of insecticides.
- Blended capital will be raised through NABARD to finance agri start-ups and rural enterprises.
Green infrastructure projects in the public sector
- The government would provide for duty concessions for boosting domestic manufacturing of electronic goods and their parts.
- The government will launch a battery swapping policy to allow the setting up of charging stations.
- The Union budget will provide support to enable 5-7% co-firing of biomass pellets in coal-based thermal power plants to boost farmers’ income and address their issue of air pollution.
- Green bonds will be issued for setting up green infrastructure projects in the public sector.
Fuel
- Unblended fuel will attract additional excise duty of ₹2 per litre.
- This is imposed to promote the blending of biofuels in petrol and diesel.
The Ujjwala scheme is extended to more households
- Clean cooking fuel through LPG connections will be provided to additional 1 crore households.
- Currently, 8 Crore households have benefitted from this scheme.
Healthcare Sector
- The government announced the plan to set up a National Tele-Mental Health programme in India.
- This move is to deal with mental health problems in people of all ages caused due to the pandemic.
Transportation in hilly areas
- 8 ropeway projects in 2022-23 will ease transport linked congestion.
- The Parvat Mala announcement will push tourism in hilly areas.
PLI Scheme
- Additional ₹19,500 crores are allocated for manufacturing high-efficiency solar modules.
- 60 lakh new jobs are to be created in 14 sectors.
Consumers can choose from Power Distribution companies.
- Consumers will be allowed to choose from more than one power distribution company.
- Power distribution will be decentralized, thus ending monopoly in the sector.
More announcements
- Over 350 exemptions are proposed in agri produce, chemicals, fabrics, medical devices, drugs and medicines, and so on.
- 1.63 crore farmers will be paid ₹ 2.37lakh crores directly for the procurement of wheat and paddy.
- The capital expenditure has been raised from ₹ 5.5 lakh crores to ₹ 7.5 lakh crores.
- E-passports with an embedded chip, futuristic technology to be rolled out.
- Battery swapping policy to be brought out for setting up charging stations at scale in urban areas for promotion of electric mobility.
- National highways to be expanded by 25,000 km.
- The Government cuts import duty on cut & polished diamonds, gemstones to 5%
- Data centres and energy storage systems were provided infrastructure status.
Impact of calibration of Basic Customs Duty (BCD)
What will get expensive?
A large number of commonly used items will become more expensive due to a hike in customs duties on imported parts, as proposed by Finance Minister Nirmala Sitharaman in the Union Budget for 2022-23. Here’s a list:
- Umbrellas
- Imitation jewellery
- Single or multiple use loudspeakers, headphones and earphones
- Smart meters, solar cells, solar modules
- X-Ray Machines
- Parts of electronic toys
What will get economical?
Certain goods will become more affordable as the government has slashed the customs duty:
- Frozen mussels, frozen squids
- Asafoetida, cocoa beans
- Methyl alcohol, acetic acid
- Cut and polished diamonds
- Camera lens for cellular mobile phones
Anti-dumping duties and countervailing duties
- Anti-dumping duties and countervailing duties on selected steel products have been revoked.
- This will help in containing high prices of metals and promote domestic manufacturing.
- Countervailing duty (CVD) is also being permanently removed on imports of certain hot-rolled and cold-rolled stainless steel flat products from China.
