Budget 2022: What is in it for a common man? Here are answers from expert

Budget 2022 For Common Man: Finance Minister Nirmala Sitharaman unveiled a Rs 39.45 lakh crore Budget 2022, with higher spending on highways to affordable housing to fire up the key engines of the economy to sustain a world-beating recovery from the pandemic. 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.

Welcoming the Budget 2022, Prime Minister Narendra Modi said and asserted that it is imperative that India becomes self-reliant. In his address on 'Aatmanirbhar Arthvyavastha' at a BJP event, he said that post-Covid, the possibility of a new world order is emerging and the initial indicators of it are already visible. A big change is coming in the way the world is viewing India, he said. "People, globally, want to see an empowered and strong India. It is imperative for us that we take our country forward at a rapid pace and strengthen it across several sectors," Modi said. It is very important that India not only becomes self-reliant but also that a modern India is built on the foundation of 'Aatmanirbhar Bharat'. Leaving aside the political angle, the budget has been welcomed from all quarters, he noted.

Amid all these developments, Viidyes K Totare, MD & CEO at Archers Wealth Management Pvt Ltd., highlights the key takeaways of Budget 2022 to address pertinent questions for a common man. 

What will be the impact of Union Budget 2022 on India’s growth rate? 

India’s economic growth rate is likely to jump to 9.4% from the current 9.2% — thus positioning India as the fastest-growing major economy in the world.
 
In simple terms how does any Budget impact the common man?
 
Budget is the annual spend of money for a nation. 
 
To put it simply according to the Union Budget 2022-23, for every rupee in the government treasury, 58 paise will come from direct and indirect taxes. Now this gives people an idea of their tax liabilities for the year. The budget affects the prices of property, vehicles, electronic goods - thus impacting people’s purchasing power and influencing their financial decisions.

Which all sectors got a major booster?

The automobile, electronics, construction, and consumer sectors have received a growth booster. This will help increase savings and a rise in purchasing power. The fiscal measures taken up by the Union government can reflect positively on the expenditure of Rs. 7.5 lakh cr for the common man. 

How is the government planning to create new jobs amid the pandemic?

The government is intending to create 60 lakh jobs through Productivity Linked Incentive (PLI) scheme in 14 sectors. And to make the citizens job-ready, the focus will be on creating online training by launching Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal).

Are there any measures for housing infrastructure?

The government has allocated a higher budget for PM Awas Yojana in comparison to last year. They aspire to build 80 lakh houses in 2022-23 with an allocated budget of Rs 48,000 crore.

Is there any new initiative to safeguard people’s health?

Pandemic has caused tremendous emotional disturbance and stress. Poor mental health poses a serious threat to the overall well-being of citizens. Hence keeping this in mind, the government has planned to launch the 'National Tele Mental Health Programme' for quality mental health counselling and care services. This establishes an open platform for National Digital Health Ecosystem.

Where exactly has the government allocated major funds to fuel investment cycle, enhance domestic demand and create employment opportunities?

With the PM Gati Shakti Yojana, the government is focused on growth engines like the development of new ports, energy transformation units, logistics, new airports, bigger and stronger infrastructure projects.

This is evident from the below allotment as follows:

-National Highways to be increased by 25000 kms
-2.7 lac Cr as MSP payments to Farmers
-MSME Guarantee cover to expand by Rs.50000 Cr
-5 lac Cr allocated for the Hospitality sector
-Rs.20000 Cr boost for Transportation
-Rs.48000 Cr allocated for Pradhan Mantri Awas Yojana
-Aims to create 40 lakh new jobs
-Rs.19500 allocated to PLI for the manufacturing of high-efficiency solar modules.
-Capital Expenditure outlay raised by 35.4% to 7.5 lac Cr * 2.9% of GDP. Effective Capex seen at 10.7 Lac Cr
-SEZ will be replaced with a new legislation

And how does this capital expenditure strengthen the Indian economy?

This investment is aimed at creating jobs and generating income for citizens. As a result, people’s purchasing power and investment capacity would increase thus boosting consumption and domestic demand of goods and services. This increased demand in turn will result in creating more jobs.  

What are the supportive measures initiated by the Government? 

As the fight against the pandemic continues in 2022, Ms Sitharaman’s budget has focused mainly on Health and Infra Capex boost. The budget has proposed a significant hike in outlay for Infra, health and well-being for 2022-23. The finance minister has also provided a good booster for capital expenditure by announcing various infrastructure projects.

What are those few initiatives that will indirectly help the common man?

For instance - the government has announced:

-5G spectrum auctions in 2023
-A good infra investment to launch 400 new Vande Bharat trains
-Over 75 digital banking units of scheduled commercial banks
-Drone technology in farming
-Digital currency by RBI and more

This directly benefits a common man. Furthermore, as per Taxpayer’s expectations for Budget 2022:

-There is no negative news on the tax front by far
-Limited surcharge on LTCG as well as stability in the deduction provisioned under section 80C
-No change in the housing loan repayment

-Exemption, dividend tax relief, capital gains rationalization across different assets classes, the elimination of securities etc., are all favourable to a salaried taxpayer.

-Crypto framework is set to benefit retail traders and investors. The government’s move to acknowledge and regulate cryptocurrency was alarming for us as well as a blessing in disguise. Gain on Virtual Digital Asset (VDA) taxed @ 30%, with no deduction allowed and no set-off allowed. Crypto tax set at 30% by Govt is targeted at regulating Cryptocurrencies from here now.
 

The bottom line is, with this Budget and the last few reforms, the Government is resolved at changing the whole economic architecture of the country