Budget 2022 at a glance – your definitive, quick guide to one and a half hours of FM speech

Finance Minister Nirmala Sitharaman. The budget has identified four priorities to give impetus to growth.

The big numbers

-   Nominal GDP for 2022-23 estimated at Rs 258 lakh crore, assuming an 11.1 percent growth over Rs 232.15 lakh crore estimated for 2021-22.

-  Fiscal deficit for 2022-23 estimated at 6.4 percent of nominal GDP. For the current fiscal year, the fiscal deficit target has been revised to 6.9 percent from 6.8 percent in the budget estimates.

- Market borrowings (government securities and treasury bills) are estimated at Rs 11.59 lakh crore for the next year. Borrowings for the current fiscal year lowered to 8.76 lakh crore from 9.68 lakh crore estimated in the budget.

-   Gross tax revenues of the Union government are estimated to rise to Rs 27.58 lakh crore, up 9.6 percent from the revised estimates for 2021-22 and 24.4 percent more than the budget estimates.

-   About 51.5 percent of the gross tax revenues would come from corporate tax and personal income tax. This is marginally higher than the 50 percent estimated in the budget and the revised estimates for the current year.

- The Union government’s total expenditure estimated to rise to Rs 39.45 lakh crore, up 4.6 percent from the revised estimate and 13.2 percent from the budget estimates. Capital expenditure will be about 19 percent of the total expenditure at Rs 7.50 lakh crore.

- Disinvestment target for the year set at Rs 65,000 crore, lower than the revised estimate of Rs 78,000 crore for the current fiscal year.

- Collection from road and infrastructure cess on petrol and diesel, a form of excise duty, estimated at Rs 1.38 lakh crore, down 31.9 percent from the revised estimates for the current year. This is the impact of a cut in excise duty on motor fuels in November 2021.

Major policy announcements

The budget has identified four priorities to give impetus to growth – PM Gati Shakti; Inclusive development; Productivity enhancement and investment, sunrise opportunities, energy transition and climate action; and financing of investment.

- PM Gati Shakti National Master Plan envisages expansion of national highways network by 25,000 km, implementation of multimodal logistics parks at four locations, introduction of one station, one product concept to help local businesses and supply chains, 100 PM Gati Shakti Cargo terminals for multimodal logistics and a national ropeway development programme on PPP mode for hilly areas.

-  Inclusive development includes continued procurement of wheat and paddy, a rationalised and comprehensive scheme to increase domestic production of oilseed, extension of the Emergency Credit Line Guarantee Scheme to the hospitality sector with an outlay of Rs 50,000 crore, a revamp of the Credit Guarantee Trust for Micro and Small Enterprises, rolling out core banking solutions in all post offices and continuing support for Har Ghar, Nal se Jal scheme and PM Awas Yojna.

- Productivity enhancement and related policy initiatives will include issuance of e-passports, paradigm shift in urban planning with emphasis on development of tier 2 and 3 cities, battery swapping policy to encourage faster adoption of electric vehicles, amendments to insolvency and bankruptcy code and measures for easier and quicker voluntary winding up of companies and transformation of Special Economic Zone with a new legislation.

- Measures for Financing Investments include stepping up of capital expenditure, issuance of Green bonds for mobilising resources for green infrastructure projects in the public sector, creation of an international arbitration centre at the GIFT city and infrastructure status for data centres and energy storage systems.

- Other significant announcement include the introduction of Central Bank Digital Currency or digital rupee by the Reserve Bank of India in the course of the year.

Tax changes

No major changes were announced. However, some measures were announced to simplify the tax system. These included:

-  Introducing new updated return to allow assesses to file updated returns within two years of the filed IT Return.

- Alternate minimum tax for cooperatives reduced from 18.5 percent to 15 percent. Surcharge on cooperative societies reduced from 12 percent to 7 percent for those with income total income between Rs 1 crore and Rs 10 crore.

-  Tax incentives for start-ups and new manufacturing units extended by a year.

-   Income from transfer of any virtual digital asset to be taxed at 30 percent but no deduction to be allowed other than the cost of acquisition. Losses from transfer of virtual digital assets cannot be set off against any other income.