Finance Minister Nirmala Sitaraman Presented Union Budget 2022-23

Finance Minister Nirmala Sitaraman Presented Union Budget 2022-23

  • February 02, 2022
  • Politics

Economic achievements of the government-

Yesterday, after the presentation of Economic Survey, FM Nirmala Sitaraman today started her budget speech with highlighting the achievements of the government-

India's economic growth in the current year is estimated to be 9.2%. With ‘Sabka Prayas’, the Government aims to attain the mission by complementing the macroeconomic growth focus, promoting digital economy and fintech, technology enabled development, energy transition, climate action and relying on a virtual cycle starting from private investment with public investment helping to crowd in private investment. Government is working for welfare of the poor, their financial inclusion through Direct Benefit Transfer. This budget seeks to lay a blueprint of our economy over Amrit-kaal for the next 25 years.

 

The achievements of previous budget- 

The productivity linked incentive (PLI) in 14 sectors for achieving the vision of Atmanirbhar Bharat has received excellent response with potential to create 60 lakh new jobs and an additional production of 13 lakh crore during next five years. The strategic transfer of ownership of Air India has been completed. Neelanchal Ispat Nigam Limited, LIC are expected shortly and others are in process for 2022-23. The National Bank for Infrastructure Development and NARC (National Asset Reconstruction Company) have commenced their activities. Economic recovery is continuing to benefit from the multiplier effect.

 

Highlights of the budget-

This budget lays the following four priorities – PM Gati Shakti Inclusive development, productivity enhancement and investment, energy transition with climate action and financing of investments. PM Gati Shakti is a transformative approach for economic growth and sustainable development, driven by 7 engines namely- roads, railways, airports, ports, mass transport, waterways and logistics infrastructure.

  • PM Gati Shakti master plan for expressways will be formulated in 2022-23 to facilitate faster movement of people and goods.
  • The national highways network will be expanded by 25,000 kilometers in 2022-23.
  • 20,000 crores of rupees will be mobilized through innovative ways of financing to complement the public resources.
  • The data exchange among all mode operators will be brought on a unified logistics interface platform designed for application programming interface. This will provide real time information to all stakeholders and improve international competitiveness open-source mobility stack for organizing seamless travel for passengers will also be facilitated.
  • Contracts for implementation of multimodal logistic parks at four locations through PPP mode will be awarded in 2022-23.

 

Railways- In Railways, ‘one product one station’ concept will be popularized to help local businesses and supply chains.

  • As a part of Atmanirbhar Bharat, 2000 km of network will be brought under Kawach: The indigenous world class technology for safety and capacity augmentation in 2022-23.
  • 400 new generation Vande Bharat Express trains with better energy efficiency and better passenger experience will be developed and manufactured during the next three years.
  • 100 PM Gati Shakti cargo terminals for multimodal logistics facilities will be developed during the next three years.

Parbatmala as a preferred ecologically sustainable alternative to conventional roads in hilly areas. National ropeways development program will be taken up on PPP mode with the aim to improve connectivity and convenience for commuters besides promoting tourism. This can also cover congested urban areas where conventional mass transit systems are not feasible. Contracts for eight such ropeway projects for a length of 60 km will be awarded in 2022-23.

 

For Northeast- A new scheme PM’s development initiative for the northeast will be implemented though the northeastern council. It will fund the infrastructure in the spirit of PM Gati Shakti and Social development projects for which allocation of 1500 crores of rupees will be made.

 

For Border villages - Villages on the northern border will be covered under a new ‘vibrant villages program’. Activities will include construction of village infrastructure, housing, tourist centers, road connectivity, renewable energy, DTH access and livelihood generation.

Banking sector reforms-

  • In 2022, 100% of 1.5 Lakh post offices will come on the core banking system enabling financial inclusion. This will especially help farmers and senior citizens in rural areas. For India@75, it is proposed to set up 75 digital banking units in 75 districts of the country by Scheduled Commercial Banks.
  • Financial support for the digital payment ecosystem announced in the previous budget will continue in 2022-23 as well.
  • In recent years over 25000 compliances were reduced and nearly 1486 union laws were repealed. This is the proof of minimum government and maximum governance.

The next phase of Ease of doing business, Ease of doing business 2.0 and Ease of living will be launched. Active involvement of states and citizens will be encouraged.

 

Reforms-  A single windows portal ’PARIVESH’ for all green clearances was launched in 2018. It has worked well. It will be modified and enabled with application for all four routes through a single form and tracking of the process through centralized processing center (CPC) green.

E passports - The issuance of E- passports using embedded chips and futuristic technology will be rolled out in 2022-23 to enhance the convenience for the citizens in their overseas travel.

Urban Planning –A high level committee of planners, urban economists and institutions will be formed to make recommendations on urban sector policies. For developing specific knowledge in urban planning and design and to deliver certified training in these areas 5 existing academic institutions in different regions will be designated as centers of excellence. These centers will be provided an endowment fund of 250 crore fund each and AICTE will help in designing the courses.  

Battery Swapping Policy- For setting up charging stations in urban areas and interoperability will be formulated. Private sector will be encouraged to develop innovative business models for battery or energy as a service.

Land policy - States will be encouraged to adopt Unique Parcel Identification Number to facilitate IT based management of records. The facility for transliteration of land records in any of the schedule 8 languages will also be rolled out. The adoption of linkage of the national generic document registration system (GDRS) with a One Nation One Registration software will be promoted.

Accelerated Corporate Exit- Center for processing accelerated corporate exit (CPACE) will process reengineering and will be established to facilitate and speed up the voluntary winding up of these companies from the currently required two years to less than six months.

Government procurement- Government rules for Amritkar have been modernized and provisions have been made for payment of 75% of running bills mandatory within 10 days. A completely paperless end to end online E-bill system will be launched and used by all central ministries for their procurements.

AVGC promotion task force - The animation visual effects gaming and comic sector’s promotion task force with all stakeholders will be set up to recommend ways to enhance markets and the global demand.

Telecom sector- Required spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within 2022-23 by private telecom providers. To enable affordable broadband and mobile service proliferation in rural and remote areas, 5% of annual connections under the universal service obligation fund will be allocated.

The contracts for laying optical fiber in all villages including remote areas will be awarded under the Bharat net project through PPP in 2022-23. Completion is expected in 2025. Measures will be taken to enable better and more efficient use of the optical fiber.

Atmanibharta in Defense- Our government is committed to reducing imports and promoting Atmanirbharta in equipment for the armed forces. 68% of the capital procurement budget will be earmarked for domestic industry in 2022-23 higher than 58% in 2021-22. Defense R&D will be opened up for industry, startups and academia with 25% of defense R&D budget earmarked.

Solar power- To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of 19,500 crores for PLI for manufacturing of high efficiency modules with priority to fully integrate manufacturing units from polysilicon to SPV modules will be made. 5 to 7% biomass will be used in thermal power plants resulting in carbon dioxide savings of 38 MMT annually. In addition, financial support will be provided to farmers belonging to scheduled castes and scheduled tribes who want to take up agroforestry.

Considering the above imperative, the outlay for capital expenditure in the union budget is once again being stepped up sharply by 35.4% from 5.54 crore in the current year to 7.50 Lakh crore in 2022-23. This has increased to more than 2.2 times the expenditure of 2019-20, this outlay in 2022-23 will be 2.9% of the GDP. The effective capital expenditure of the central government is estimated at 10.68 Lakh crores in 2022-23 which will be about 4.1% of the GDP.

Also some key points in economic sector-

  • For 2022-23, the allocation is 1 lakh crores to assist the states. In catalyzing the overall investments in the economy, these 50-year interest free loans are over and above the normal borrowings allowed to the states.
  • In 2022-23, in accordance with the recommendations of the 15th finance Commission, the states will be allowed a fiscal deficit of 4% of the GSDP of which 0.5% will be tied to power sector reforms.
  • As against a total expenditure of 34.83 lakh crores of rupees projected in the 2021-22, the revised estimate is 37.70 lakh crores. The revised estimate of capital expenditure is 6.3 Lakh crores of rupees. This includes an amount of 51,1971 crores towards settlement of outstanding guaranteed liabilities of Air India and its other sundry commitments.
  • Total expenditure in 2022-23 is estimated at 39.45 lakh crores. The total receipts other than borrowings are estimated at 22.84 lakh crores of rupees. The revised fiscal deficit in the current year is estimated at 6.9% of the GDP as against 6.8% projected in the budget estimates. The fiscal deficit in 2022-23 is estimated at 6.4% of the GDP.
  • Now cooperative societies will also pay 15% only. FM also reduced the surcharge on cooperative societies from the present 12% to 7% for those having total income of more than 1 crore and up to 10 crores.
  • FM allowed the payment of annuity or lump sum amount to the differently abled dependent during the lifetime of the parent and guardians I.e. parent or guardians attaining the age of 60 years.
  • Tax deduction limit has now been increased from 10% to 14% on employers' contributions to the NPS account of state government employees just like central government employees.
  • The long-term capital gains on listed equity shares units etc are liable to maximum surcharge of 15% while other long term capital gains are subjected to a graded surcharge which goes up to 37%. Now the surcharge on long term capital gains arising on transfer of any type of assets is 15%.
  • Gross collections for the month of January 2022 are rupees 1,40,986 crores rupees which is the highest since the inception of GST.
  • Reforms in customs administration of SEZs and make it IT driven and function on the custom's national portal with only risk-based checks. This reform shall be implemented by 30th September 2022.
  • National capital goods policy 2016 aims at doubling the production of capital goods by 2025. To phase out the concessional rates in capital goods and project imports gradually and apply the moderate tariff of 7.5%.

 

The budget contains some major economic reforms that are expected to boost the Indian Economy.

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