Union finance minister Nirmala Sitharaman on Tuesday unveiled a Rs 39.45 lakh crore Budget, with larger spending on highways to reasonably priced housing with a view to fireside up the important thing engines of the financial system to maintain a world-beating restoration from the Covid pandemic.
After making data of the longest Budget speech, Sitharaman on Tuesday introduced her shortest one to this point, at about 90 minutes.
While she primed up spending on infrastructure to create jobs and enhance financial exercise, Sitharaman didn’t tinker with revenue tax slabs or tax charges.
Her Budget for the fiscal yr starting April 2022, which got here simply forward of elections in 5 key states, proposed a large 35 per cent bounce in capital expenditure to Rs 7.5 lakh crore, coupled with rationalisation of customs responsibility, an extension of time for organising new manufacturing firms and plans for beginning a digital foreign money and taxing crypto property.
At a post-Budget press convention, she parried questions on the center class not being given reduction within the type of tax cuts or elevating of exemption, saying the Budget has not raised taxes final yr or this yr.
“We did not try to raise money through higher taxes as we did not want to burden people with taxes during a pandemic,” she mentioned.
The Budget, like final yr, gave an enormous enhance for infrastructure spending — from 5G spectrum public sale, increasing nationwide highways by 25,000 kms, inter-linking of rivers and manufacturing of 400 new technology Vande Bharat trains.
“The overall sharp rebound and recovery of the economy is reflective of our country’s strong resilience,” she mentioned in her Budget speech within the Lok Sabha, vowing to put the muse for quicker progress.
The Budget raised duties on imported headphones, loudspeakers, good meters utilized by energy distribution firms and photo voltaic panels to bolster native manufacturing and create jobs. It additionally proposed to withdraw the anti-dumping tax on some metal merchandise and lengthen an import responsibility exemption on scrap for one other yr as native shoppers grapple with excessive costs for the alloy.
Sitharaman additionally introduced a brand new battery swapping coverage for electrical autos, allotted Rs 60,000 crore for piped water to three.8 crore houses, supplied Rs 19,500 crore value of further production-linked incentives for photo voltaic modules to spice up native manufacturing and categorized knowledge storage as an infrastructure sector for offering cheaper and simpler financing.
To enhance infrastructure, she mentioned contracts to put optical fibre in rural areas can be awarded, Rs 48,000 crore has been put aside for reasonably priced housing, nationwide highways community can be expanded by 25,000 km, 4 multi-modal logistics parks can be arrange, a string of ropeway initiatives are deliberate in hilly areas, a battery swapping coverage can be introduced, excessive precedence has been accorded for Ken-Betwa river hyperlink mission and defence R&D opened to non-public gamers.
Also, a plan to make use of biomass pellets in thermal energy vegetation in bid to rely much less on coal was introduced.
An public sale of 5G telecom spectrum is deliberate in 2022, digital monetary providers are deliberate to be expanded and 1.5 lakhs submit workplaces are to be linked to the core banking platform for monetary inclusion and banking entry to the non-banked inhabitants.
On the opposite hand, meals, fertiliser and different subsidy outgo has been minimize by 39 per cent.
Total authorities spending can be 4.6 per cent greater than the present yr and further help of Rs 1 lakh crore to states has been introduced.
The authorities continues on its path of supply-side economics and plans to spice up investments, thereby growing jobs and consumption as a substitute of straight asserting any financial reduction to the decrease finish of the inhabitants.
The spending is being financed by a file borrowing which would come with inexperienced bonds.
The fiscal deficit, which unexpectedly rose to six.9 per cent of the GDP for the present fiscal yr ending March 31, 2022, is projected to come back down to six.4 per cent subsequent yr and 4.5 per cent by 2025-26.
India’s financial system is projected to develop by 9.2 per cent within the present fiscal, earlier than slowing to 8-8.5 per cent in 2022-23 (April 2022 to March 2023). It had contracted by 6.6 per cent within the fiscal yr ended March 31, 2021.
The Budget’s “approach is driven by seven engines,” Sitharaman mentioned, itemizing roads, railways, airports, ports, mass transport, waterways and logistics infrastructure as the important thing areas.
“All seven engines will pull forward the economy in unison”, complemented by vitality transmission, IT communication, water and sewerage sector and social infrastructure, she mentioned.
On the direct tax entrance, to additional ease compliances for taxpayers, a brand new IT return system can be launched and litigation can be decreased by proscribing attraction rights of income authorities for consecutive years.
It marginally elevated the time restrict to begin manufacturing by March 31, 2024 for items opting for the useful company tax price of 15 per cent.
Here’s a more in-depth take a look at a few of the focus areas of the Budget.
Agriculture
In a bid to faucet the allied farm and meals processing sectors to spice up farmers’ revenue, the federal government on Tuesday proposed larger funds allocation for these two sectors for the following fiscal, in addition to asserting finance help for startups, promotion of Kisan drones and PPP mode for supply of excessive tech agri-services to farmers.
Sitharaman mentioned inclusive growth is among the 4 priorities of the federal government shifting ahead.
The Budget allocation for the Ministry of Agriculture and Farmers’ Welfare has been raised marginally by 4.5 per cent to Rs 1,32,513 crore for 2022-23 fiscal.
However, the Budget allocation for the Ministry of Fisheries, Animal Husbandry and Dairying has been elevated by 44 per cent to Rs 6,407.31 crore and for Food Processing Industries by 2.25 occasions to Rs 2,941.99 crore for the following fiscal.
The finance minister mentioned as a part of the inclusive growth, the federal government will implement a “rationalised and comprehensive scheme” to extend home oilseed manufacturing, thereby decreasing the nation’s dependence on the import of edible oils.
The authorities may also usher in legislative and coverage modifications to advertise agro-forestry and implement a complete package deal, with states to undertake appropriate kinds of fruits and greens that may be processed.
Further, the federal government will promote the usage of ‘Kisan Drones’ for crop evaluation, digitisation of land data and spraying of pesticides, she added.
To finance startups and rural enterprises working in agri-space, the minister mentioned the federal government will facilitate a fund with blended capital raised underneath the co-investment mannequin by Nabard.
“This is to finance startups for agriculture and rural enterprise relevant for farm produce value chain,” she famous.
The actions of those startups will embrace inter-area help for farmer-producer organisations (FPOs), equipment for farmers on a rental foundation on the farm degree and expertise, together with invitee base, she added.
The finance minister additional mentioned the federal government will promote chemical-free pure farming all through the nation with a concentrate on farmers’ lands in five-kilometre extensive corridors alongside the river Ganga within the first stage.
For the supply of digital and high-tech providers to farmers, she mentioned the federal government will launch a scheme of public-private partnership (PPP) mannequin with the involvement of public sector analysis and extension establishments together with personal agri-tech gamers and stakeholders of agri worth chains.
States can be inspired to revise syllabi of agricultural universities to fulfill the wants of pure zero funds and natural farming, modern-day agriculture, worth addition and administration, she added.
On the procurement of agri-crops, the minister mentioned the federal government’s procurement of wheat and paddy on the minimal help worth (MSP) throughout 2021-22 will cowl 1,208 lakh tonnes from 163 lakh farmers.
For the following fiscal, the federal government has allotted an estimated funds of Rs 6,75,000 crore for PM-KISAN, Rs 15,500 crore for the crop insurance coverage scheme, Rs 7,183 crore for the Krishonnati Yojana, Rs 10,433 crore for the Rashtriya Krishi Vikas Yojana (RKVY) and about Rs 1,500 crore for Market Intervention Scheme-Price Support Scheme.
Education
A digital college to be constructed on the ‘hub-and-spoke’ mannequin and growth of ‘one class-one TV channel’ programme by 200 channels for offering supplementary schooling in regional languages in faculties are among the many main initiatives within the schooling sector proposed by the Finance Minister.
The total monetary allocation for the schooling sector for 2022-23 has elevated to Rs 1.04 lakh crore from Rs 93,224 crore (Budget estimate) in 2021-22 because the minister laid emphasis on digital modes of schooling to reverse studying losses attributable to the coronavirus pandemic. The revised estimate for 2021-22 is Rs 88,001 crore.
The minister mentioned that 5 establishments can be recognised as Centres of Excellence on city planning and the AICTE will take the lead on creating curriculum for them, whereas world-class overseas universities can be allowed in Gujarat International Finance Tec (GIFT), City to supply programmes in monetary administration, science, tech, and so on free from home laws.
Presenting the funds for 2022-23, the finance minister mentioned that as a result of pandemic-induced closure of faculties, youngsters, significantly within the rural areas and these from Scheduled Castes, Scheduled Tribe, and different weaker sections, have misplaced virtually two years of formal schooling.
“Mostly, these are children in government schools. We recognise the need to impart supplementary teaching and to build a resilient mechanism for education delivery.
“For this purpose, ‘one class-one TV channel’ programme 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 1-12,” she mentioned.
The digital college can be established to supply entry to college students throughout the nation for world-class high quality common schooling with personalised studying expertise at their doorsteps. This can be made accessible in several Indian languages and ICT codecs, she mentioned.
“The university will be built on a networked hub-spoke model, with the hub building cutting-edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hub-spokes,” added Sitharaman.
The finance minister proposed that in vocational programs, to advertise essential crucial pondering abilities and give area for creativity, 750 digital labs in science and arithmetic, and 75 skilling e-labs for a simulated studying atmosphere, can be arrange in 2022-23.
“High-quality e-content in all spoken languages will be developed for delivery via internet, mobile phones, TV and radio through Digital Teachers. A competitive mechanism for the development of quality e-content by the teachers will be set up to empower and equip them with digital tools of teaching and facilitate better learning outcomes,” she mentioned.
Sitharaman introduced that for creating India-specific data in city planning and design, and to ship licensed coaching in these areas, as much as 5 present educational establishments in several areas can be designated as centres of excellence.
“These centres will be provided endowment funds of Rs 250 crore each. In addition, AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions.
“World-class foreign universities and institutions will be allowed in the Gujarat International Finance Tec (GIFT), City to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics free from domestic regulations, except those by IFSCA to facilitate the availability of high-end human resources for financial services and technology,” she mentioned.
School schooling outlay for 2022-23 is at Rs 63,449.37 crore, practically Rs 9,000 crore greater than 2021-22.
The nation’s greatest college schooling scheme, the Samagra Shiksha Abhiyan, has been allotted Rs 37,383.36, a rise of greater than Rs 6,000 crores from Budget 2021.
Funds for the Kendriya Vidyalayas and Jawahar Navodaya Vidyalayas have elevated to Rs 7,650 crore and 4,115 crore respectively.
The Centre has allotted Rs 40,828 crore to the Education Ministry’s Higher Education Department for the following monetary yr, which is a rise of 6.6 p.c over the present monetary yr.
In 2021-22, the funds for the Higher schooling division was Rs 38,350.65 crore and it additional dropped to Rs 36,031.57 within the revised estimates.
Health
The well being sector has been allotted Rs 86200.65 crore within the Union Budget, a hike of 16 per cent over Rs 73,931 crore in 2021-22, with the federal government additionally asserting a National Tele Mental Health Programme and roll out of an open platform for the National Digital Health Ecosystem.
Out of Rs 86200.65 crore, Rs 83,000 crore have been allotted to the Department of Health and Family Welfare whereas Rs 3200 crore have been allotted to the Department of Health Research. In her Budget speech for the fiscal yr starting April 2022, Finance Minister Nirmala Sitharaman mentioned on Tuesday {that a} National Tele Mental Health Programme can be launched to enhance entry to high quality psychological well being counselling and care providers.
She mentioned the programme will embrace a community of 23 tele-mental well being centres of excellence, with NIMHANS being the nodal centre and the International Institute of Information Technology-Bangalore (IIITB) offering expertise help.
She additionally mentioned that an open platform for National Digital Health Ecosystem can be rolled out.
“It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities,” she mentioned.
The funds allocation for central sector schemes and initiatives has been elevated from Rs 10,566 crore to Rs 15,163 crore.
Among these central sector schemes, the funds allocation for the Pardhan Mantri Swasthya Suraksha Yojana has been elevated from Rs 70,000 crore to Rs 10,000 crore. The allocation for National Digital Health Mission – NHM has been elevated from Rs 30 crore to Rs 200 crore.
For the National Health Mission, the funds allocation elevated from Rs 36576 crore in 2021-22 to Rs 37,000 crore in 2022-23.
Women and baby growth
The funds allotted to the Women and Child Development Ministry stood at Rs 25,172.28 crore in 2022-23, a slight improve of three per cent from Rs 24,435 crore that was given in 2021-22.
Presenting the Budget for 2022-23, Finance Minister Nirmala Sitharaman mentioned recognising the significance of ‘Nari Shakti’ because the harbinger of India’s vibrant future and for women-led growth in the course of the ‘Amrit Kaal’, the federal government has comprehensively revamped the schemes of the Ministry of Women & Child Development.
Accordingly, Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 have been launched not too long ago to supply built-in advantages to ladies and youngsters.
The funds allotted for Saksham Anganwadi and POSHAN 2.0 (Umbrella ICDS – Anganwadi Services, Poshan Abhiyan, Scheme for Adolescent Girls) was Rs 20,263 crore, a small improve from Rs 20,105 crore in 2021-22.
The funds allotted for Mission Shakti (Mission for Protection and Empowerment for Women) was Rs 3,184 crore in 2022-23, elevated from Rs 3,109 crore in 2021-22.
For Mission VATSALYA (Child Protection Services and Child Welfare Services), the funds allotted was Rs 1,472 crore, a rise from Rs 900 crore in 2021-22.
The funds allocation for autonomous our bodies dropped from Rs 188 crore in 2021-22 to Rs 152 crore in 2022-23. These autonomous our bodies embrace – Central Adoption Resource Agency (CARA), National Commission for Protection of Child Rights (NCPCR) and National Commission for Women.
The Finance Minister, in her funds speech, additionally introduced that two lakh anganwadis can be upgraded underneath the Saksham Anganwadis scheme.
Defence
The defence funds was on Tuesday elevated to Rs 5.25 lakh crore for 2022-23 from final yr’s allocation of Rs 4.78 lakh crore with a serious push on guaranteeing self-reliance in manufacturing of navy platforms.
In the Union Budget introduced in Parliament by Finance Minister Nirmala Sitharaman, a complete of Rs 1,52,369 crore has been put aside for capital expenditure that features buying new weapons, plane, warships and different navy {hardware}.
For 2021-22, the budgetary allocation for capital outlay was Rs 1,35,060 crore however the revised estimate confirmed the expenditure at Rs 1,38,850 crore.
According to the funds paperwork, an allocation of Rs 2,33,000 crore has been made for income expenditure that features bills on cost of salaries and upkeep of institutions.
Separately, an quantity of Rs 1,19,696 crore has been allotted for defence pensions whereas Rs 20,100 crore has been put aside for the Ministry of Defence (Civil).
Defence Minister Rajnath Singh described as an “excellent move” the proposal in the Union Budget to set aside 25 per cent of the defence R&D budget for start-ups and private entities in the financial year 2022-23.
Singh also welcomed Sitharaman’s announcement that 68 per cent of the defence capital procurement budget would be allocated towards procurement from domestic industry.
Income tax
Sitharaman did not tinker with the personal income tax rates in the Budget for 2022-23. The minister also did not raise the standard deduction, which was widely anticipated in view of elevated inflation levels and impact of the pandemic on the middle class. The standard deduction currently stands at Rs 50,000.
There was no change in income tax slabs in the personal income tax category in the Budget unveiled on Tuesday, February 1. The corporate tax rate too was kept at the same level. However, the concessional rate of 15% has been extended by one year for newly incorporated manufacturing units.
In Union Budget 2021-22, too, the Union government did not make any changes to the income tax system in place. In Union Budget 2020, the Union government had introduced reduced tax slabs with a clause that those opting for this will not be able to claim deductions. As per the tax regime, those earning upto Rs 5 lakh did not have to pay any income tax. Those earning between Rs 5 lakh and Rs 7.5 lakh were taxed at 10%, between Rs 7.5 lakh and Rs 10 lakh per year at 15%, between Rs 10 lakh and Rs 12.5 lakh at 20%, between Rs 12.5 lakh and Rs 15 lakh at 25%, and above that at 30%.
However, if individuals wanted to claim deductions, they could continue to do so under the old regime. The old regime dictated that there would be no tax upto Rs 2.5 lakh, 5% between Rs 2.5 lakh and Rs 5 lakh, 20% between Rs 5 lakh and Rs 10 lakh, and 30% for those earning above Rs 10 lakh. Under the proposal, which system would be beneficial to people, was determined on their earnings and the investments they made.
Direct tax collections
After a gap of three years, direct tax collections — which include corporate tax and personal income tax — have exceeded the Budget estimates for FY’22, indicating economic recovery.
As per the Budget document, the government has revised upwards the direct tax collection estimates for 2021-22 fiscal from Rs 11.08 lakh crore in Budget estimates (BE), to Rs 12.50 lakh crore in revised estimates (RE).
As per the RE, the government expects to collect Rs 6.35 lakh crore from corporate taxes and Rs 6.15 lakh crore from personal income taxes (PIT).
This compares with BE figure of Rs 5.47 lakh crore and Rs 5.61 lakh crore in corporate taxes and PIT, respectively.
The last time the government witnessed an increase in direct tax collection over Budget estimates was in 2017-18.
In 2017-18, the collection was revised upwards to Rs 10.05 lakh crore, from Rs 9.8 lakh crore in BE. The actual collection, however, worked out to be Rs 10.02 lakh crore.
In 2020-21, the direct tax collection in budget estimates was at Rs 13.19 lakh crore. The Covid-19 pandemic hit the country within a month of setting of this target, forcing the government to significantly revise downwards its collection target to Rs 9.05 lakh crore in RE. The actuals, however, worked out to be Rs 9.44 lakh crore.
Finance Minister Nirmala Sitharaman on Tuesday pegged the direct tax collection at Rs 14.20 lakh crore for FY2022-23. This includes Rs 7.20 lakh crore from corporate taxes and Rs 7 lakh crore from PIT.
Minority affairs
The Minority Affairs Ministry was allocated Rs 5020.50 crore in the 2022-23 Union Budget on Tuesday which is Rs 674.05 crore more than the revised figures of the previous fiscal.
In the budget presented for 2022-23 by Finance Minister Nirmala Sitharaman, it is proposed to give Rs 5020.50 crore to the Ministry of Minority Affairs.
The budget estimate for the Ministry of Minority Affairs in the financial year 2021-22 was Rs 4810.77 crore and later the revised allocation was Rs 4346.45 crore.
Of the proposed allocation to the ministry, Rs 1425 crore is for the pre-matric scholarship scheme and Rs 515 crore is for the post-matric scholarship.
Over 491 crore has been allocated for skill development and livelihood initiatives.
Minority Affairs Minister Mukhtar Abbas Naqvi hailed the 2022-23 Budget and said it advances the opportunity for self-reliant India amid the Covid pandemic.
Naqvi said amidst the global economic crisis, the Budget binds together trust and development with the thread of “self-reliant India”.
This Budget assures and advances the opportunity for self-reliant India amid the pandemic period, he said.
Railways
The Railway Ministry has been allocated Rs 140367.13 crore in the Union Budget on Tuesday, Rs 20,311 crore more than the revised figures of the previous fiscal.
Finance Minister Nirmala Sitharaman in her Budget speech for 2022-23 said that India will manufacture 400 new, energy-efficient Vande Bharat trains in the next three years. The rail sector will also develop “One Station One Product”, which will leverage local produce carried on the railways.
Railway Minister Ashwini Vaishnaw welcomed the announcement and said that the integration of posts and railways will bring better logistics solutions for people living in remote areas.
He also said that the Railways will introduce new products and services for small farmers and enterprises.
The Budget has also earmarked Rs 38686.59 crore for investment in PSUs, joint ventures and special purpose vehicles.
The allocation for the development of rolling stock, which will be instrumental in bringing in new modern coaches and technology to the national transporter, has been kept at Rs 7977 crore.
The Finance Minister has also allocated Rs 15710.44 crore to the Dedicated Freight Corridor (DFC), whose assets will be monetised by the Railways for operations and maintenance.
It has also allocated Rs 13335.47 crore for track renewal, Rs 2850 crore for gauge conversion and Rs 12108 crore for doubling. A sum of Rs 25243 crore has been allocated for new lines as well.
Rural roads
Allocation to the rural roads construction scheme PMGSY raised by 36 per cent to Rs 19,000 crore for the fiscal year 2022-23 from revenue estimate last year, whereas the total allocation to all centrally sponsored schemes under the rural development ministry dipped around 11 per cent in the budget presented on Tuesday.
The total allocation to centrally sponsored schemes under the Rural Development Ministry including MGNREGA, declined to Rs 1,35,944.29 crore for the year 2022-23 from Rs 1,53,558.07 crore, the revised estimate of the financial year 2021-22.
The allocation to Pradhan Mantri Gram Sadak Yojana (PMGSY), the rural roads construction scheme, in the budget for the year 2022-23 was raised by a whopping 36 per cent to Rs 19,000 crore, from Rs 14,000 crore, the revised estimate, which is actually an expected expenditure to be incurred, for the year 2021-22.
Special focus in the PMGSY has been given to construction of roads in left-wing extremism affected areas and north-eastern states, as the allocation to both these components of the rural roads construction schemes was substantially raised.
The allocation to another flagship scheme, Pradhan Mantri Awas Yojana (PMAY) was also slightly raised by 2.5 per cent to Rs 20,000 crore in the budget as compared to Rs 19,500 crore in 2021-22.
Allocations to various other schemes under the centrally sponsored schemes such as Indira Gandhi National Old Age Pension Scheme and Annapurna Scheme were also raised in the budget.
Metro projects
The Centre has allocated Rs 19,130 crore in the Union Budget 2022-23 for various metro projects in the country.
In November last year, Union minister Hardeep Singh Puri had said that 723 km of metro network was operational in 18 cities, and an additional over 1,000 km of network under construction in various cities.
Separately, six new proposals were also being evaluated, he had said.
Meanwhile, Delhi Metro officials said in recent years, the Union Ministry of Finance is providing Budget for all metro projects in India, instead of DMRC alone. Accordingly, in Budget 2022-23, the allocation made for all metro projects in India is Rs 19,130 cr.
The budgetary allocation in the last fiscal for metro projects was Rs 18,978 cr.
The DMRC network’s current span is nearly 392 km with 286 stations (including the Noida–Greater Noida Metro Corridor and Rapid Metro, Gurgaon).
Besides, metro services are operational in many other cities, including Lucknow, Mumbai, Banglore, Kochi, Hyderabad and recently operationalised in Kanpur.
An outlay of Rs 4,710 cr has been made in the Union Budget for projects of the National Capital Region Transport Corporation (NCRTC).
“In a major boost to regional connectivity in NCR, Government of India has allocated Rs 4,710 cr to country’s first Regional Rapid Transit System (RRTS) project in the Union Budget presented today in Parliament,” NCRTC said in a statement.
Construction work on the entire 82 km-long Delhi-Ghaziabad Meerut RRTS corridor is in full swing. The corridor will have 25 stations, including two depots and one stabling yard, officials said.
So far, 16 km viaduct of priority section, 1200 piers, and 9,900 piles have been concreted. Foundation work has been completed for 56 km of the corridor, the statement said.
The 17 km priority section between Sahibabad to Duhai is scheduled to be operational by March 2023 and trial runs are expected to begin this year. The complete corridor will be opened to the public by 2025, officials said.
“RRTS is a strategic investment of the governments to transform the mobility in NCR in line with the GatiShakti masterplan. The continued allocation to RRTS reinforces government’s focus on infrastructure expenditure to catalyse the economic revival after the impact of pandemic,” Vinay Kumar Singh, MD, NCRTC, was quoted as saying in the statement.
Solar
The Finance Minister proposed enhancing the funding underneath the Performance Linked Incentive (PLI) scheme for home photo voltaic cells and module manufacturing to Rs 24,000 crore from the prevailing Rs 4,500 crore to make India an exporting nation. “For facilitating domestic manufacturing for the ambitious goal of 280 GW (GigaWatt) of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for PLI scheme for manufacturing of high efficiency (solar) modules with priority of fully integrate manufacturing units for polysilicon to solar PV modules will be made,” she said in her Budget speech in the Lok Sabha.
Sitharaman said that the risks of climate change are the strongest negative externalities that affect India and other countries. She repeated the Prime Minister’s quote during the COP26 summit in Glasgow last November, where he had said, “What is needed today is mindful and deliberated utilisation instead of mindless destructive consumption.”
“The low carbon development strategy as enunciated in the ‘panchamrit’ that he (PM) announced is an important reflection of our government’s strong commitment towards sustainable development,” Nirmala Sitharaman said on Tuesday.
This strategy opens up huge employment opportunities and will take the country on a sustainable development path. This budget proposes several near term and long term actions accordingly, she added.
She also said that the data centre and energy storage system will be given infrastructure status to provide easy financing to the sector. Sitharaman informed that the private equity and venture capital investors invested Rs 5.5 lakh crore in startups. She further said an expert committee will be set up to suggest measures to help attract more investments. Measures will also be taken to step up private capital in the infrastructure sector, she said.
River-linking
The implementation of Ken-Betwa river linking at an estimated cost of Rs 44,605 crore will be taken up, Finance Minister Nirmala Sitharaman said on Tuesday.
She said the draft DPRs of five river links, namely Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar, and Pennar-Cauvery have been finalized.
The Ken-Betwa Link Project is aimed at providing irrigation benefits to 9.08 lakh hectare of farmers’ lands, drinking water supply for 62 lakh people, 103 MW of Hydro, and 27 MW of solar power, Sitharaman said while presenting the Budget for 2022-23.
“Allocations of Rs 4,300 crore in RE 2021-22 and Rs 1,400 crore in 2022-23 have been made for this project,” she said.
“Once a consensus is reached among the beneficiary states, the Centre will provide support for implementation,” she said.
Cryptocurrency
Giving clarity on taxation of cryptocurrencies and other virtual assets, Finance Minister Nirmala Sitharaman on Tuesday proposed a 30 per cent tax on income from transactions in such assets. Also, to bring such assets under the tax net, she proposed a 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold. Gifts in crypto and digital assets will also be taxed, she said.
The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament. Meeting demands from large sections of industry, she said the RBI will launch a ‘Digital Rupee’ based on blockchain technology in 2022-23. Experts said the 30 per cent tax levied on income arising from the sale of cryptocurrency is similar to the tax rate on winnings from lottery, game shows, puzzles etc.
Digital currency and assets like NFTs (non-fungible tokens) have gained traction globally over the last couple of years. Trading in these assets has increased manifold with cryptocurrency exchanges being launched. However, India did not have a clear policy on either regulating or taxing such asset classes. NFTs are unique digital assets with verified ownership rights and the details are stored on a blockchain.
E-passports
Sitharaman said that e-passports will be rolled out from next year onwards for the convenience of the citizens. She added that these passports will have embedded electronic chips and futuristic technology.
At present, passports are issued to the public in printed booklets. The chips in the e-passports will contain security-related data encoded on them.
Reports suggest that the e-passports will use radio-frequency identification and biometrics. They will also be in line with the international travel rules.
The personal particulars of the individual applying for an e-passport would be digitally signed and stored in the electronic chip embedded in it. The e-passport is also expected to help smooth passage through immigration posts globally.
Paperless budget
The Finance Minister on Tuesday again took a digital tablet wrapped in a traditional bahi-khata style pouch as she headed for Parliament to present the Union Budget 2022-23 in a paperless format just like the last year.
She posed for the traditional ‘briefcase’ picture outside her office along with her team of officials before heading to meet the President. She, however, was holding a tablet instead of a briefcase to present the Budget in a digital format.
“#AatmanirbharBharatKaBudget | From ‘Bahi Khata’ to Made in India’ Tablet Finance Minister @nsitharaman carrying the Budget in the #paperless format in a tablet kept inside a red cover with National Emblem embossed on it instead of the briefcase or ‘Bahi Khata’,” Digital India tweeted.
With a tablet carefully kept inside a red coloured cover with a golden coloured national emblem embossed on it instead of the briefcase, she went straight to Parliament after meeting the President at Rashtrapati Bhawan.
Sitharaman, India’s first full-time woman Finance Minister, had in July 2019 ditched the colonial legacy of a Budget Briefcase for the traditional Bahi-Khata to carry Union Budget Papers. She used the same in the following year, and in a pandemic-hit 2021, she swapped traditional papers with a digital tablet for carrying her speech as well as other Budget documents.
Her Budget for the fiscal year beginning April 2022 (FY2022-23) is the Modi government’s 10th straight Budget since 2014 (including one interim Budget presented ahead of general elections in 2019).
The “budget case” tradition started in the 18th century when the Chancellor of the Exchequer or Britain’s budget chief was asked to ‘open the budget’ while presenting his annual statement.
In 1860, the then British budget chief William E Gladstone carried his papers in a red suitcase with the Queen’s monogram in gold. Budget briefcase came into being because Gladstone’s speeches were extraordinarily long, and he needed a briefcase to carry his speech papers.
However, in India, different finance ministers carried different briefcases with colours of red, black, tan or brown.
Markets
The Sensex soared 848 points while the Nifty reclaimed the 17,500-mark on Tuesday after Finance Minister Nirmala Sitharaman unveiled a bigger Rs 39.45 lakh crore Budget, with higher spending on infrastructure to spur economic recovery and create jobs.
Metal, realty and cement stocks saw robust buying, while selling in auto and telecom counters capped the gains.
After a strong start, the BSE Sensex succumbed to a sudden bout of selling following the Budget presentation, but staged an immediate rebound to end 848.40 points or 1.46 per cent higher at 58,862.57, marking its second straight session of gains.
On similar lines, the broader NSE Nifty surged 237 points or 1.37 per cent to end at 17,576.85.
Tata Steel hogged the limelight in the Sensex pack, zooming 7.57 per cent, followed by Sun Pharma, IndusInd Bank, L&T, UltraCement, ITC, Titan and HCL Tech.
In contrast, M&M, PowerGrid, SBI, Bharti Airtel, NTPC, Maruti and Reliance closed in the red, shedding up to 1.67 per cent.
“Supportive measures were needed for rural, agriculture, low taxpayers and for sectors impacted by the pandemic. High capex, fiscal deficit and borrowing plans in the background of a high inflation, commodity and oil prices and rising interest rates will be challenges in the short to medium-term,” mentioned Vinod Nair, Head of Research at Geojit Financial Services.
Ashishkumar Chauhan, MD and CEO, BSE, mentioned the Budget was very balanced and continued the incremental growth-oriented strategy of the final funds.
“In this budget, the finance minister provided a springboard for an investment cycle with the highest ever share of capex, focus on the development of national manufacturing capabilities and clean energy, tax rationalisation with no new taxes while maintaining its continuous growth focus on Aatmanirbhar Bharat,” he added.
(With PTI inputs)
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