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Budget 2022-2023: Key Highlights and Expectations

Updated on: 01 Feb 2022 // 25 min read // #mmm news
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Budget 2022-2023

Finance Minister of India, Nirmala Sitharaman will present the 4th Budget of the Modi 2.0 government on Indian budget 2022 date, i.e. 1st February 2022. It is expected that the key focus of the Budget will be further accelerating India's pace of recovery from the Covid-19 pandemic shock and shoring up India's healthcare system alongside to secure the nation against any future outbreaks. In this budget, the government is aiming to continue spending more to aid India’s recovery and growth. There are announcements of various Production Linked Incentive (PLI) Schemes that have given hopes to India's manufacturing sector. The union budget 2022 will aid in speeding up India's race to reach the $5 trillion economy goal.

Key Highlights from Budget 2022-2023

1st’ February Live Budget Highlights: 

  • Sensex jumps 700 points higher, Nifty tops 17.5K before Budget 2022 announcement.
  • Sitharaman says GDP is expected to be 9.2% in FY22 while health infrastructure has improved.
  • 60 lakh new jobs in next 5 years.
  • Transportation
    • National Highway network to be expanded by 25,000 km in 2022-23.
    • Modern infrastructure to raise productivity and Rs. 20k crore to boost transport infrastructure.
    • 300 new Vande Bharat trains and 100 Gati Shakti cargos in 3 years.
  • Agri
    • Outlay for minimum support price.
    • 2.73 lakh crore as MSP payment.
    • Bonanza for kisan in 2022.
    • Procurements of crops to increase.
    • Draft DPRs for 5 river links including Pennar-Kaveri, Krishna-Godavari.
    • Use of Kisaan drones & digitisation of land records
    • Machinery on rent for small kisans.
    • Chemical, pesticide-free natural farming to be promoted in India.
    • 1000 LMT Paddy is expected to be procured.
    • Financial support for SC/ST farmers
  • MSME
    • 2 lakh crore credit for MSMEs.
    • Additional 50k crore credit guarantee.
    • Skilling programs, Sustainability, Employability to be pushed further.
    • PM E-Vidya expanded to 400 channels.
    • Classes on regional channels soon.
    • 200 TV Channels, 1 Class 1 TV Channel for up to 12th Standard.
    • Emergency Credit Line Guarantee Scheme extended till March 2023.
  • Health
    • Open platform for health infrastructure.
    • National health program soon.
    • Helplines to be established for Mental Health.
    • 2 lakh anganwadis to be updated.
    • Rs. 10 crore for Jal Jeevan mission.
    • 60,000 crore allocated for providing access to tap water to 3.8 crore households.
  • Housing
    • 18 lakh affordable houses by 2023
    • Rs. 48,000 crore for Pradhan Mantri Awas Yojana or PMAY
    • 15,000 crore for north-east infrastructure push.
    •  
  • Digital Payment & Fintech
    • Encouragement to digital banking
    • 75 e-banking systems in 75 districts
    • Post offices to be merged with the banking sector.
    • Core banking in all post offices by 2023.
    • Embedded chips in e-passports.
    • Introduction of digital currency by RBI soon - India to have its own digital currency.
    • Digital rupee to be launched in 2022-2023.
  • Law
    • 1486 Union laws repealed.
    • Compliance processes eased.
    • Priority for trust based governance.
  • Urban Development
    • Urban development is critical.
    • Paradigm change in urban planning.
    • High level panel for urban development.
    • Battery swapping policy.
    • Special mobility zones to promote EV.
    • Efficient use of land resources.
    • Rs. 250 crore for knowledge centres.
    • Uniform process of registration - 1 nation, 1 registration form land reform.
    • Digitisation of land records underway.
    • End-to-end e-bill system.
  • Telecom
    • Roll out of 5Gs mobile services by 2023.
    • 5G spectrum auctions in 2022.
    • Scheme for design-led manufacturing for 5G.
    • 100% optical fibre network soon.
  • Defence
    • Defence R&D will be opened for industry & startups.
    • Atmanirbhar Bharat push in the defence sector.
    • 25% defence budget for research.
    • 68% defence budget for Make in India.
  • Energy
    • Low carbon development strategy.
    • Rs. 19500 crore for solar energy production.
    • Clean energy action plan for 10 sectors.
    • Energy efficiency and saving measures will be promoted.
    • Measures to stop stubble burning will be promoted.
  • Capital Expenditure
    • 35.4% hike in capital expenditure
    • 7.5 lakh crore capital expenditure for CAPEX by FY23.
    • Rise in CAPEX to boost consumption.
    • Sovereign green bonds to mobilise funds.
    • Venture capitalists invested 5.54 lakh crore in FY22.
    • Rs. 1 lakh crore for states to capitalise the economy.
    • 50-year interest free loans for states.
  • Budget Estimates
    • Finance bill: Total estimated budget of 39.45 lakh crores for 2022-2023 year.
    • Rs. 22.8 lakh crore estimated total borrowing.
    • 6.9% fiscal deficit estimated this year.
    • Estimated 6.4% fiscal deficit in FY23.
  • Taxation
    • Only 15% tax for co-operatives.
    • 5% reduction in surcharge for co-operatives.
    • IT returns can be filed in 2 years.
    • Tax incentives for startups extended till March 2023.
    • 30% tax on income from virtual digital assets like cryptocurrency, NFTs, etc.
    • 1% TDS on payment of virtual assets.
    • 15% surcharge cap on long-term capital gain.
    • One market, one tax dream realised.
    • Fully IT driven GST revenue stream now.
    • GST revenue buoyant despite pandemic - Record Rs. 1.40 lakh crore GST revenue in Jan 2022, the highest since inception of GST.
    • Enhancement in ease of doing business.
    • No relaxation in income tax slabs.

Key budget highlights 

  • The Budget Session 2022 of Indian Parliament has begun today with the President Ram Nath Kovind’s address to both Houses in the Central Hall.
  • The Budget Session will be concluding on 8th April and the first part of the session will be extending up to 11th February.
  • The Union Budget 2022-2023 will be presented by the Finance Minister of India, Nirmala Sitharaman on 1st February in paperless form.
  • No 'Zero Hour' on 31st January and 1st February.
  • There will be no ‘Halwa’ ceremony this year amid the spread of Omicron.
  • Strict Covid-19 protocols will be followed in the parliament.

Budget expectations 2022

  • The healthcare sector seeks priority status at the moment. There will be an increase in fund allocation to 3% of GDP.
  • FIEO says that this budget will be focused on MSME and export.
  • Some experts are also expecting changes in income tax rates and slabs.
  • Experts say that this budget should focus on amping up India’s health infrastructure.
  • Scheme to develop 700 districts as country’s export hubs on the cards.
  • The fintech industry is hoping for incentives to push financial inclusion.
  • The realty sector has high budget expectations 2022 to boost market sentiments.
  • Bank of Baroda eco research says that the budget aims at boosting growth and achieving fiscal consolidation.
  • Union budget 2022 highlights income tax: Real estate sector expects some tax relief and industry status from Sitharaman.
  • The pharma industry expects announcements of incentives for conducting R&D.

Market trends 

  • Market watchers expect that LIC IPO will be the key for the targets in the Union Budget despite the higher target divestment for the upcoming financial year.
  • Although the market sees volatility before and after the union budget 2022, the event will hardly leave any impact in the two-week period.
  • Market experts believe that disinvestment and privatization will gain further traction.
  • Crypto startups seek clarity over taxation, legislation, exemptions, regulations and issues alike.
  • Analysts do not expect any change in capital gain tax on equity.

Economic indicators

  • NSO data and the results of the third-quarter from the corporate sector shows some optimism.
  • Striking a balance between supporting the growth through reviving the dormant private consumption & investment demands while containing inflation seems to be a key challenge.
  • As per NSO, the real GDP is expected to be Rs. 147.54 lakh crores in the year 2021-2022, registering a growth rate of 9.2%.
  • Services’ Purchasing Managers' Index is back to pre-Covid levels.
  • The nominal GDP of India is expected to grow in budget session 2022 at almost 18%, about 3.5% higher than the budgetary estimates.
  • The direct tax revenue is expected to go beyond budget estimates for this year.
  • Imports & exports and trade deficit have registered high growth rates.
  • Private final consumption expenditure, which was estimated at Rs. 80.8 lakh crores for the fiscal year, remained about 3% below the Rs. 83.2 lakh crores in 2019-20.

Read Also: Budget 2022-2023 Key Highlights 

FAQs

What is the total budget of India in 2022?

According to a report by Bloomberg, Nirmala Sitharaman will probably increase this year’s annual budget 2022 by about 14% year-on-year to Rs. 39.6 trillion ($527 billion) for the next financial year.

What is the budget date?

Budget 2022 date India is 01.02.2022.

When is budget 2022 India?

Union budget 2022 date is 01.02.2022. Finance minister Nirmala Sitharaman will present the 4th Budget of the Modi 2.0 government on 1st February, 2022.