Union Budget 2022 Analysis.pptx

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Tirpude’sUpa₹jan-Finance Forum (TUFF)
Union Budget 2022 Analysis
By :
Dr. Yogesh Dhoke
1

Union Finance Minister, Nirmala Sitharaman, was delivered
her fourth Budget in Parliament ON 1st February,2022.
This will the second consecutive year that a paperless budget
will be presented.
The Economic Survey 2022, released on January 31st 2022,
estimated the country's GDP to grow by 9.2% this year.

 According to Article 112 of the Indian Constitution, the Union Budget of a
year, also referred to as the annual financial statement, is a statement of the
estimated receipts and expenditure of the government for that particular year.
 Union Budget keeps the account of the government's finances for the fiscal
year that runs from 1st April to 31st March.
 Union Budget is classified into Revenue Budget and Capital Budget.
 In India, the Parliament conducts threesessionseach year:
 Budget session: January/February to May.
 Monsoon session: July to August/September.
 Winter session: November to December.
Background of Union Budget as per Indian Constitution
Dr. Yogesh Dhoke(TIME) 3

• DigitalRupeeto berolledoutby 2023
• India to launch sovereign greenbonds
• 5G spectrumauctionsto beconductedthisyear
• ECLGS(Emergency Credit Line Guarantee Scheme) extended tillMarch2023
• ePassportswillberolledout in2022-23 forconveniencein overseastravel
• For urban capacity building, modernization of building by-laws, town planning
schemes, and transit-oriented development will beimplemented.
• Centresof Excellencewillbe establishedwith an outlayof 250 crores forurban
sector development.
• Battery Swapping Policy will be brought out and inter operational service will be
formulated.
• 'One Nation,One Registration'willbe establishedforany where registrationto
facilitateease of living &doing business.
• Private sector will be encouraged to create sustainable and innovative business
models for battery and energy as a service, improving the efficiency in the EV
ecosystem.
TOP ANNOUCEMENT

BUDGET AT GLANCE

• FocusareasofBudget
 PM Gati Shakti
 Inclusive Development
 Productivity Enhancement
 Sunrise Opportunities
 Energy Transition
 ClimateAction
 Financing of investments
HIGHLIGHTS

 India's growth is estimated tobeat 9.2%,thehighestamong all large economies.
 Budget2022is a blueprintforthe next 25years.
 PLI(Production Linked Incentive Scheme) schemesin14sectorswith the potentialto
create60lakhnewjobs,and additional newproductionof Rs 30lakh crore.
 ECLGS (Emergency Credit Line Guarantee Scheme)
to be extended up to March 2023 guaranteed cover extended
byanotherRs 50,000crore.
 The total cover under the scheme is now Rs 5 lakh
crore. An additional amount has been earmarked for
the hospitality sector
HIGHLIGHTS

• Aboost for Railways under the Gati Shakti plan
 400 new-generation Vande Bharat trains will be developed and manufactured
in the next 3 years.
 One station, one product' concept will be popularized to help local
businesses.
 India plans 100 cargo terminals in 3 years.
HIGHLIGHTS

• Sevenenginesof PMGatiShakti
 Roads
 Railways
 Airports
 Ports
 Mass transport
 Waterways
 Logisticsinfra
• Adigital ecosystemforskilling and livelihoodwill belaunched.
 This will aim to skill, reskill, upskill citizens through online training.
 API based skill credentials, payment layers to find relevant jobs and
opportunities
 An open platform for the national digital health ecosystem will be rolled out.
HIGHLIGHTS

 Announcementof KenBetwa riverlinkingprojectworthRs 44,605croretobe beneficialfor
capitalgoodsplayers.
 Pandemic has brought to the fore the issue of mental health. Anational tele mental
healthprogramwill belaunched.
• Forsmallenterprises
 MSMEs such as Udyam, e-shram, NCS & Aseem portals will be inter-
linked, their scope will be widened.
 They will now perform as portals with live organic databases providing G-
C, B-C & B-B services such as credit facilitation, enhancing entrepreneurial
opportunities.
 A fund with blended capital raised under co-investment model facilitated
through NABARD to finance startups in agriculture & rural enterprises for
farm produce value chain.
HIGHLIGHTS

• Financialinclusion
 100% of 1.5 lakh post offices will come on the core banking system,
enabling financial inclusion and access to accounts through net banking,
mobile banking, ATMs, and also providing online transfer of funds
between post office accounts and bank accounts.
 This will be helpful especially for farmers and senior citizens in rural areas,
enabling interoperability, and financial inclusion.
• Fortheeducationsector
 States will be encouraged to revise syllabi of agricultural universities to
meet the needs of natural, zero-budget & organic farming, modern-day
agriculture.
 One class, one TV channel' program of PM eVIDYA will be
expanded from 12 to 200 TV channels.
 This will enable all states to provide supplementary
education in regional languages for classes 1 to 12.
HIGHLIGHTS

• Rs 48,000croresis allottedforPMAwas Yojana
 In 2022-23, 80 lakh houses will be completed for identified beneficiaries of
PM Awas Yojana; 60,000 houses will be identified as beneficiaries for PM
Awas Yojana in rural & urban areas.
 60,000 crores allocated for providing access to tap water to 3.8 crore
households.
 In 2022-23, 80 lakh households will be identified for the affordable
housing scheme.
 E-passports, the issuance of E passports using embedded ships and
futuristic technology will be rolled out in 2022-23 to enhance the
convenienceforthecitizens intheiroverseastravel.
 An open platform forthe National Digital Health Ecosystem will be rolled
out. It will consist of digital registries of health providers and health
facilities, unique health identity, and universal access to health
facilities.
HIGHLIGHTS

 Sitharaman said that a required spectrum auction will be conducted in 2022for the rollout
of 5G mobile services by private telecom providers.
 Scheme for design-led manufacturing to be launched for 5G ecosystem as part of PLI
scheme to enable affordable broadband and mobile communication in rural and
remote areas.
• Aself-reliantdefensesector
Defense R&D will be opened up for industry, startups, and academia with 25% of the
defense R&Dbudget.
Private industry will be encouraged to take up the design and development of military
platforms and equipment in collaboration with DRDO and other organizations through
the SPVmodel.
68% of the capital procurement budget in defense will be earmarked for the domestic
industry in2022-23
Contracts for laying optical fiber in villages to be awarded under Bharat Net project
underPPPin2022-23
HIGHLIGHTS

 National Ropeways Development Programme to be taken up in PPP
mode with the aim to improve connectivity, besides promotingTourism.
India to launch sovereign green bonds Funds will be used for projects that
will help reduce the carbon intensity of the economy. Sovereign green
bonds will be part of the government’s borrowing program in FY23.
Proceeds to be deployed in public sector projects.
 Digital rupee,using blockchain,to belaunched byRBI in2023
Digital currency will also lead to a more efficient and cheaper currency
management system. It is therefore proposed to introduce digital rupee using
block chain and other technology to be issued by the Reserve Bank of India
starting, 2022 and 2023.
HIGHLIGHTS

•Capital expenditureis being stepped up to Rs 7.5lakhcrore.
FY23 Capex seen at 2.9% of GDP
FY23 effective Capex seen at Rs 10.7 lakh crore
• Minimum government and maximum governance, reduction of overlapping
compliances will increase compliance - critical for ease of doing business
in India. Trust-based governance is the planned theme during Amrit Kal of
the next 25 years – from India at 75 to India at 100
• Issue of Green Bonds will enable the viability gap funding needed for achieving
the 500GW RE energy target by2030.
HIGHLIGHTS

• FiscalDeficittargetsetat 6.4%forFY23
FY23 total expenditure seen at Rs 39.45 lakh crore.Total Receipts other
than borrowing seen at Rs 22.84 lakh crore.
• Anewprovisionto allow taxpayersto filean updatedreturn.
Updated returns can be filed within 2 years from the end of the relevant
assessment year.
• Tax deduction limit increased to 14% on employers contribution to NPS
account of state govt employees
HIGHLIGHTS

Taxbreatherforco-ops
 Alternate Minimum Tax for cooperative
societies to be cut to 15%.
 The proposal will reduce the surcharge on
cooperative societies to 7%, for those whose
income is between Rs 1 crore and Rs 10 crore.
HIGHLIGHTS

 Existing tax benefits for startups, which were offered redemption of
taxes for 3 consecutive years, to be extended by 1 more year.
 The gross GST collections for the month of January 2022 are Rs
1,40,986 crores whichis thehighestsincetheinceptionofGST.
 no mention of the change in personal tax rates/slabs or
increase in any exemption/deduction limits in FM’s speech.
HIGHLIGHTS

FORTAXPAYERS
 Taxpayers can file an updated return on payment of taxes within two years
from the end of the relevant assessment year.
 The new provision will ensure voluntary tax filing and reduce litigation.
 30% tax on proceeds of virtual/digital assets with no deductions other than
the cost of acquisition.
 No set off permitted against other income.
 1% TDS to be levied on payments made on transfer of digital assets.
 Deduction for employer contribution to NPS increased to 14% from 10%
earlier for State govt employees on par with central govt employees.
HIGHLIGHTS

Phasing out dutyexemptions
More than 350 exemptions on some Agri products, chemicals,
drugs, etc to be phased out.
Concessional customs duty on capital goods to be phased out, the
initial rate of 7.5% to be imposed.
HIGHLIGHTS

DEFICIT/EXPENDITURE
 Proposes fiscal deficit of 4.5% of GDP by 2025/26
 Projects fiscal deficit of 6.4% of GDP in 2022/23
 Revised fiscal deficit for 2021/22 at 6.9% of GDP
 Total expenditure in 2022/23 seen at 39.45 trillion rupees
 States will be allowed a 4% fiscal deficit to GDP in FY23
 50-year interest-free loans over and above normal
borrowing allocated to states
 Scheme for financial assistance to states for capital
investment outlay to be 1 trillion rupees in 2022/23
HIGHLIGHTS

TAXATION
 Import duty on certain chemicals is being reduced.
 Customs duty exemption on steel scrap to be extended for another year
for small- and medium-sized businesses.
 Customs duty on stainless steel, flat products, high steel bars to
be revoked.
 Unblended fuel to get an additional duty of 2 rupees per liter from
October 2022.
HIGHLIGHTS

FINANCE
 Emergency credit line guarantee scheme for small and medium- sized businesses to be extended
to March 2023.
 Energy transition and climate action will be a major government priority
 Public issue of Life Insurance Corporation expected shortly.
 Initiatives from last year's budget have been provided adequate allocations in this budget.
 Special Economic Zones Act to be replaced with new legislation.
 Toamend bankruptcy code to speed up the resolution process.
 Aims to lower winding up of companies to 6 months from 2 years currently.
HIGHLIGHTS

DIGITALCURRENCY
To launch digital rupee using blockchain technology starting 2022/23
 To launch a scheme for the taxation of virtual digital assets
 Losses from the sale of virtual digital assets cannot be offset
against other income
 Income from virtual digital assets to be taxed at 30%
DEFENCE
Govt committed to reducing defense imports.
HIGHLIGHTS

INFRASTRUCTURE
 5G spectrum auctions to be conducted in 2022.
 Scheme for design-led manufacturing for 5G will be part of the production-
linked scheme.
 To award contracts to lay optical fiber in rural areas, completion in 2025.
 480 billion rupees set aside for affordable housing in 2022/23.
 To allocate additional 195 billion rupees for production-linked incentives
towards solar equipment manufacturing.
HIGHLIGHTS

AGRICULTURE
The domestic scheme introduced to reduce dependence on oilseed imports
 Fund with blended capital raised under co-investment model to finance
agriculture startups
 Railways to develop infrastructure for small farmers in 2022/23
TRANSPORT
 400 energy-efficient trains to be manufactured over next three years
 National highways network to be expanded by 25,000km in 2022/23
 Highways expansion to cost 200 billion rupees in 2022/23
 India to bring out battery swapping policy
HIGHLIGHTS

• Divestment target for FY23 seen at Rs 65,000 crore.
• Crypto assets will be taxed and whether there will be any specific benefit given
to the Digital Rupee.
HIGHLIGHTS

Unblended fuel
to attract
additional excise
duty of Rs 2/litre
from Oct 1, to
promote
blending biofuels
in petrol and
diesel
• Import duty on cut & polished diamonds &
gemstones reduced to5%
• At present, import duty on cut and polished
diamonds as well as gemstones is 7.5%.
• Divestment target for FY23 seen at Rs 65,000
crore.
• International arbitration centre at GIFTCity
• In addition, a world-class university to be
allowed in GIFT IFSC (International Financial
Services Centre) free from domesticregulation.
• Currently,GIFT-IFSC is the maideninternational
financial services Centre inIndia.

• Here's is a list of items that will become cheaper and costlier in FY23:
• CHEAPER
• - Clothes
• - Gem stones anddiamonds
• Imitation jewellery
• - Mobile phones
• - Mobile phonechargers
• - Custom duties on chemicals needed for petroleum products
• - Custom duties on certain chemicals, including methanol
• - Concessional customs duty on steel scrap extended for 1 year

• COSTLIER
• -All importeditems
• - Duty on umbrellasincreased
•

For detail information click on below mentioned link.
https://www.indiabudget.gov.in/

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