Union Budget 2022 Highlights: Finally, that time of the year when Santa (FM Nirmala Sitharaman) comes and tries to fulfil the wish list of most of the sections of the society. 1st Feb, 2022 when every Ear is waiting to hear the budgetary announcement that impacts them and also the announcements which impacts the overall development of the economy.
The Major Focus of the Union Budget 2022 is PM Gati Shakti, inclusive development, productivity enhancement and investment and financing of investment. According to FM, “PM Gati Shakti is driven by seven engines – roads, railways, airports, ports, mass transport, waterways and logistic infrastructure”.
The Union Budget 2022, is built around the development of the future and make India ready for future challenges. Although the Personal Income tax slabs have been given a miss, but overall economic growth and development has been the key focus.
Various reforms have been formed to regulate the ignored sectors. Focus has also been on rail and road connectivity development. Agriculture sector has been given major focus and impetus. And lots of benefits have been also announced to the Fintech and Electric vehicle segment.
Table of Contents
Following are the major Budgetary Announcements from Union Budget 2022 Highlights
Income Taxation Segment
- For errors occurred during tax filing, FM Sitharaman has announced an opportunity to correct it. Taxpayers can now file updated returns within 2 years from the relevant assessment year.
- Both centre and state govt employees tax deduction limit to be increased from 10% to 14%. And this will help the social security benefits of state and centre to come at par.
- Any income generated from the transfer of virtual digital asset (eg. cryptocurrency) to be taxed at flat 30% plus 1% TDS. No deduction allowed in this case except the cost of acquisition. This actually shows the clarity of the government in this stance. Recognition is finally rewarded to the virtual assets.
- And at the cost of everyone’s disappointment, the FM has not made any changes in the Income Tax slabs or rate.
- Tax Benefits to startups to be extended by 1 more years (previously 3 years)
GDP and Government Expenditure
- The Finance Minister announced that in 2021-22, there was a sharp increase in capital expenditure and Public Investment. The Union Budget of 2022-23 will majorly benefit women, Youth, farmers, SC, ST etc.
- PM Gati Shakti Master Plan to be given major impetus with an investment to the tune of Rs. 20,000 crores and this will be used for the development of expressway for faster movement of people and Goods.
- Indian GDP growth is estimated to be at 9.2% and that will be the highest amongst all the large economies.
- RBI to issue digital rupee using the blockchain technology in the year 2022-23. According to the FM, this will boost the economy.
- For 2022-23,allocation is Rs 1 lakh cr to assist the states in catalyzing overall investments in the economy. These 50-yr interest-free loans are over & above normal borrowings allowed to states. It’ll be used for PM Gati Shakti-related & other productive capital investments of states
- For FY 2023, Fiscal Deficit pegged at 6.4% of GDP. For FY 2022, Fiscal Deficit pegged at 6.9% of GDP.
- Rs. 60,000 crores allotted to cover 3.8 crores households for tap water. Under the PM housing scheme, Housing projects allocated Rs. 48000 crores for FY 2023.
- Out of the total budget for the defense sector, 68% has been marked for procurement from the domestic market. Up from 58% last year.
- CAPEX of the government is expected to be Rs. 10.68 lakh crores and that is about 4.1% of the GDP
- To reduce the carbon footprints, Sovereign Green Bonds to be issued in Public Sector Projects.
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5G Spectrum
- The FM also announced that 5g spectrum auctions will be conducted in 2022 to facilitate the roll out of much anticipated 5g services. It will be for private telecom players. And this will also help in the generation of employment.
Infrastructure Development
- 400 new Vande Bharat trains to be introduced for better efficiency over the next 3 years. And 100 PM Gati Shakti Cargo Terminals to be introduced over the next 3 years.
Agriculture Sector
- The Fiscal year 2022-23 has been announced as the year of Millets. Government will pay Rs. 2.37 lakh crores towards the procurement of Wheat and Paddy under the MSP operations.
Economic Development
- Promoting Digital Economy, FinTech, Energy Transmission, Climate Control etc are major focus with the help of both Public and Private Sector.
- Ease of Doing Business 2.0 to be launched and 1486 new union laws will be repealed for the same. The aim is to take Digital banking to every citizen. 75 digital banking units in 75 districts of the country will be launched.
- E-Passports will be rolled out in 2022-23 to enhance the convenience of the citizens.
Other Major Announcements
- Owing to the Pandemic (COVID), mental health has become a critical issue. To enhance the quality and accessibility of Mental health counselling and care services, a National Tele Mental Health program will be launched.
- The EV ecosystem will be helped to increase efficiency, and Private sector will be encouraged to create sustainable and innovative business models for battery and energy as a service.
- National Skill Qualification Framework to be updated. It will be aligned with dynamic industry needs to enable citizens to skill, reskill and upskill and that will help them in finding new jobs and enhancing their livelihood.
- Custom duties on cut diamonds has been reduced to 5%. Custom duties on acidic acid and methanol also reduced.
In Closing
The Union Budget can be summed up as a mix of Hits and Misses. The Income tax slabs have remained unchanged but the overall economic development has been stressed upon. Regulations have been put forth towards the Virtual Digital Assets.
The infrastructure sector, Agriculture sectors, Fintech and Electric vehicle Segment have been focused on. The economically backward sectors will also be benefitted under the PM scheme. Do share your thoughts on the Union Budget 2022 Highlights.
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