Finance Minister Nirmala Sitharaman on Tuesday unveiled a bigger Rs 39.45 lakh crore Budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy to sustain a world-beating recovery from the pandemic. 

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While she primed up spending on infrastructure to create jobs and boost economic activity, Sitharaman did not tinker with income tax slabs or tax rates.  

These are the Budget 2022 highlights:-

DIGITAL CURRENCY

* To launch digital rupee using blockchain technology starting 2022/23
* To launch scheme for taxation of virtual digital assets
* Losses from sale of virtual digital assets cannot be offset against other income
* Income from virtual digital assets to be taxed at 30%

DEFICIT/GDP

* 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
* Revenue deficit seen at 3.8% of GDP in 2022/23
* Nominal GDP expected to grow by 11.1% in 2022/23

BORROWING

* Gross borrowing in FY23 seen at 14.95 trillion rupees - CNBC TV18
* Net borrowing seen at 11.59 trillion rupees in FY23

RECEIPTS

* Projects gross tax revenue of 27.6 trillion rupees in 2022/23
* Net tax revenue seen at 1.93 trillion rupees in FY23
* Disinvestment receipts pegged at 650 billion rupees
* FY22 disinvestment receipts revised to 780 billion rupees from 1.75 trillion rupees
* Total revenue receipts seen at 22.04 trillion in FY23
* Pegs dividend and profits at 1.14 trillion rupees for 2022/23
* Govt to switch bonds worth 1 trillion rupees in FY23
* Aims to get 739.48 billion rupees dividend from Reserve Bank of India and financial institutions in FY23

EXPENDITURE

* Total expenditure in 2022/23 seen at 39.45 trillion rupees
* Fertiliser subsidy seen at 1.05 trillion rupees in 2022/23
* Food subsidy seen at 2.07 trillion rupees in 2022/23
* To borrow 4.25 trillion rupees via national small savings fund
* Projects interest payments, servicing of govt debt at 9.4 trillion rupees in 2022/23

DUTY

* Import duty on certain chemicals are 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 additional duty of 2 rupees per litre from October 2022
* Duty on cut and polished diamonds to be 5%

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
* To amend bankruptcy code to speed up resolution process
* Aims to lower winding up of companies to 6 months from 2 years currently
* Long term capital gain surcharge to be capped at 15%

STATES

* States will be allowed 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

DIGITAL CURRENCY

* To launch digital rupee using blockchain technology starting 2022/23
* To launch scheme for taxation of virtual digital assets
* Losses from sale of virtual digital assets cannot be offset against other income
* Income from virtual digital assets to be taxed at 30%

INFRASTRUCTURE

* 5G spectrum auctions to be conducted in 2022
* Scheme for design-led manufacturing for 5G will be part of production-linked scheme
* To award contracts to lay optical fibre 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

AGRICULTURE

* 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 budget: to bring out battery swapping policy

DEFENCE

* Govt committed to reducing defence imports

Her Budget for the fiscal year beginning April 2022 proposed a massive 35 per cent jump in capital expenditure to Rs 7.5 lakh crore, coupled with rationalisation of customs duty, an extension of time for setting up new manufacturing companies and plans for starting a digital currency and tax crypto assets.

Just like last year, the Budget gave a big boost for infrastructure spending -- from 5G spectrum auction, expanding national highways by 25,000 kms, inter-linking of rivers and manufacturing of 400 new generation Vande Bharat trains.

"The overall sharp rebound and recovery of the economy is reflective of our country's strong resilience," she said in her Budget speech in the Lok Sabha, vowing to lay the foundation for faster growth.

The Budget prioritised economic expansion over fiscal consolidation.

"This Budget continues to provide the impetus for growth," she asserted.

The fiscal deficit, which unexpectedly rose to 6.9 per cent of the GDP for the current fiscal year ending March 31, 2022, is projected to come down to 6.4 per cent next year and 4.5 per cent by 2025-26.

India's economy is projected to grow by 9.2 per cent in the current fiscal before slowing to 8-8.5 per cent in 2022-23 (April 2022 to March 2023). It had contracted by 6.6 per cent in the fiscal year ended March 31, 2021.

The Budget's "approach is driven by seven engines," Sitharaman said, listing roads, railways, airports, ports, mass transport, waterways and logistics infrastructure as the key areas.

"All seven engines will pull forward the economy in unison", complemented by energy transmission, IT communication, water and sewerage sector and social infrastructure, she said.

The Budget proposals laid the foundation for strengthening of different sectors like transportation and logistics sectors (Gati Shakti), banking and fintech (75 digital units to be set up), agriculture, EV sector (battery swapping policy), among others.

On the direct tax front, to further ease compliances for taxpayers, a new IT return system will be introduced and litigation will be reduced by restricting appeal rights of revenue authorities for consecutive years.

It marginally increased the time limit to commence production by March 31, 2024 for units opting for the beneficial corporate tax rate of 15 per cent.

To provide impetus to trust-based governance as a concept, an updated tax return system has been introduced wherein a taxpayer can file a tax return upon payment of specified taxes within 2 years from the end of the relevant assessment year.

She unveiled a proposal to introduce digital currency by the RBI and said digital assets will be taxed at 30 per cent with no deduction for any expenditure except the cost of acquisition of such asset.

To give a boost to the start-up community, she capped the surcharge on long-term capital gains at 15 per cent now.

As a push to promote exports, the SEZ Act will be replaced with a new legislation and states shall become partners for development of infrastructure.

In tandem, reforms are also proposed to be undertaken in the Customs administration of SEZs, with facilitation related changes to be made.

From an indirect tax perspective, the concessional rate on capital goods imports under Project Import Scheme is proposed to be withdrawn, to promote domestic industry and imports will be taxed at 7.5 per cent now. 

(With PTI/Reuters)