Union Budget 2022 Highlights | Union Finance Minister Nirmala Sitharaman on February 1 presented her 4th Budget speech by expressing empathy for those who suffered during COVID-19 pandemic. The finance minister said that India's growth estimated to be at 9.2%, highest among all large economies. Meanwhile, PM Modi said that he will be talking about 'people friendly and progressive' Budget at a programme on February 2, at 11 am. Here are top announcements from her Budget proposals and announcements so far:
The Union Budget was preceded by a virtual meeting of the Rajya Sabha floor leaders, chaired by Chairman of the House and Vice President M Venkaiah Naidu on January 31. President Ram Nath Kovind also addressed the joint sitting of two Houses on January 31, kick-starting the Budget session of the Parliament. Besides this, the Economic Survey 2022 was presented in both houses of Parliament on January 31. Rajya Sabha is likely to function from 10 am till 3 pm on working days while the Lok Sabha will function from 4 pm to 9pm. The first part of the budget session will begin on January 31 and will continue till February 11. The second part of the budget session will be held from March 14 to April 8.
Notably, this Parliament session is being held amid electioneering for Assembly Elections to five states — Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh. With voting scheduled later in the month, it is to be seen whether the 2022-23 Budget will focus more on populist measures.
What's new with the Budget this year?
— Digital Budget: In 2021, for the first time, the Union Budget in India was read out from a tablet. In the customary photo before the presentation of the Budget in Parliament, Finance Minister Nirmala Sitharaman was seen carrying the device in a compact red case. This is expected to continue this year too.
In the preceding years, finance ministers had carried Budget documents in brown, red or tan briefcases, in keeping with British tradition. That changed in 2019, when Nirmala Sitharaman replaced them with a traditional Bahi Khata or cloth ledger. “I thought it is high time we move on from the British hangover, to do something on our own,” the finance minister had said. “And well, easier for me to carry too.”
— Budget on mobile app: The finance minister will present the Union Budget in "paperless form" this year, the government said on January 27. The entire budget document will be released on a mobile application named 'Union Budget Mobile App', for lawmakers and the general public after it is presented in the Parliament on February 1.
The app allows complete access to 14 Union Budget documents, including the Budget Speech, Annual Financial Statement (commonly known as Budget), Demand for Grants (DG), and Finance Bill etc., as prescribed by the Constitution, the ministry stated. The application is bilingual (English & Hindi) and is available on both Android and iOS platforms.
— No Halwa ceremony: This year, to mark the final stage of the Union Budget making process, sweets were provided to the core staff due to undergo “lock-in” at their workplaces, instead of a customary Halwa ceremony held every year in view of the prevailing pandemic situation and the need to observe health safety protocols, the ministry said.
"To maintain the secrecy of Budget, there is a “lock-in” of the officials involved in making the Budget. Budget Press, situated inside North Block, houses all officials in the period leading up to the presentation of the Union Budget. These officers and staff will come in contact with their near and dear ones only after the Budget is presented by the Union Finance Minister in the Parliament," it further noted.
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Finance Minister Nirmala Sitharaman on February 1 presented the Union Budget for 2022-23, which pegged the government’s fiscal deficit for the financial year at 6.4% of gross domestic product. Hereis a quick guide to the budget.
In theUnion Budgetspeech 2022-23, Finance MinisterNirmala Sitharamanannounced that the government will be issuing green bonds ‘for mobilising resources for green infrastructure’. This article looksat the idea behind green bonds and how the Indian government can designand issue these green bonds.
What is the need for green bonds?
Climate change has emerged as a major concernfor policymakers. The relation between climate change and financial markets runs in both directions asymmetrically. On the one hand, climate change impacts financial markets unfavourably as climate shocks could lead to losses on banks and financial institutions. On the other hand, financial markets can address climate change favourably by designing financial products to lower the risks. This article reviews the second relation and in particular the role and design of green bonds to lower climate-related risks.
From a much-awaited cut in long-term capital gains (LTCG) tax on unlisted shares to levying a tax on crypto gains, a sign of legitimising the asset class, there was a lot to unpack. Overall the budget was alittle disappointingas far as the taxpaying middle class was concerned with the government taking a cautious approach.A large number of commonly used items, including headphones, earphones, loudspeakers, smart meters, imitation jewellery, solar cells and solar modules will become more expensive due to a hike in customs duties on imported parts, as proposed by Finance MinisterNirmala Sitharamanin theUnion Budgetfor 2022-23.However, imported cut and polished diamonds, frozen mussels, frozen squids, asafoetida, cocoa beans, methyl alcohol and acetic acid will become cheaper as a result of rationalisation in customs duties.
The Budget day action rarely proves to be this good. The Nifty 50 index jumped 1.4 percent even after giving up all of its gains a little after Finance Minister Nirmala Sitharaman ended her shortest speech ever.
The gains were the third-best for a Budget day in the past 10 years as investors rejoiced in the fact that the government will take up the mantle of boosting capital formation in the economy for another year given that private sector CAPEX still remains comatose.
Outlay on capital expenditure jumped over 35 percent to Rs 7.5 lakh crore and compared to the revised estimate for the current financial year it rose by 24.5 percent. These are numbers that exceeded even the optimists on the Street given that consensus hoped for a 20 percent growth in public CAPEX.
TheUnion Budgetfor financial year 2022-23, presented by Finance MinisterNirmala Sitharamanon February 1, will lead to the doubling of farmers' income and benefit the medium, micro and small entreprises (MSMEs), Prime Minister Narendra Modi said.The fiscal road map unveiled by Sitharaman will benefit every sector of the economy, "with a special focus onagriculture", the prime minister claimed.
The announcement of "over Rs 2.25 lakh crore MSP (minimum support price)" is aimed at benefitting the farmers as the amount is "being directly transferred" to them, he said. This "budget will double farmers' income," news agency ANI further quoted him as saying."For MSMEs, credit guarantee and many new schemes have been announced," Modi noted.
Real estate developers on February 1 hailed the government's decision to allocate Rs 48,000 crore in Budget under the Pradhan Mantri Awas Yojana (PMAY) and faster approvals for affordable housing in urban areas but rued that no additional tax deduction was allowed on interest paid on home loans.
"Allocation of Rs 48,000 crores towards completion of 80 lakh homes under PMAY is a welcome step. FM also announced that approvals related to land and construction particularly for Affordable Housing in the urban areas will be given priority," CREDAI President Harshvardhan Patodia said. He also welcomed the government's focus on urban planning, especially in tier II and III cities.
Boman Irani – President, CREDAI-MCHI, said there has been an introduction of a revolutionary reform — one land and one registration system — which is beneficial for the real estate ecosystem. "…though the real estate industry analysts and developers community were hoping for some more rebates given its performance and contribution to the overall economy in the past few months. A simple point that could have added cheer to home buyers would be an increase in tax deduction for home loan interest," he added.
Challenges posed by the multiple waves of the pandemic have led to a situation where the private capital expenditure is yet to pick up in a big way, and the government has acknowledged this fact while proposing higher spending in the budget, bankers said on Tuesday.
The over 35 per cent jump in public capex for FY23 proposed in the budget with thrust on hard infrastructure will also lead to an increase in the sagging domestic demand, industry lobby Indian Banks' Association's chairman and state-owned lender UCO Bank's chief executive AK Goel said.
Listing out other welcome proposals in Finance Minister Nirmala Sitharaman's Budget, Goel said when the growth is broad-based, the banking sector will have more avenues to lend.
The government’s proposed expenditure on medical and public health in the coming fiscal is going to see a drastic drop of more than 45 percent fromthe revised Budget estimate for 2021-22, the fine print of the Budget document shows.The Centre proposes to spend Rs 41,011 crore towards medical and public health in 2022-23, while this expense was Rs 74,820 in the current financial year.The sharp reduction in the head is due to the lower requirement for COVID vaccination, the document explains.Union Finance MinisterNirmala Sitharamanhas also pledged Rs 5,000 crore as support to states for COVIDvaccination this year, which is Rs 33,000 crore lesser than the 2021-22 allocation. The government, as per the revised Budget estimate, had committed Rs 39,000 crore for COVID-19 vaccination this fiscal.
TheBudget 2022-23 tabled by Finance MinisterNirmala Sitharamanon February 1 did not have any special announcements or schemes for five states going to the assembly polls in less than two weeks.This was in contrast to last year’s budget in which the finance minister madesubstantial allocations for four states going to pollssoon after she tabled the budget in the Parliament.In her 90-minute speech, the finance minister on February 1 said the government was aware of the concerns of the youth, women, farmers, the scheduled castes and scheduled tribes but didn’t specifically allocate funds for any of the five poll-bound states of Uttar Pradesh, Uttarakhand, Manipur, Punjab and Goa.
On February 1, while announcing theBudget 2022, Finance MinisterNirmala Sithraman announcedsomething that was totally unexpected. Sithraman said income from 'virtual assets' will be taxed at 30% and one percentTDS (tax deducted at source) will be deducted on these investments.The government defines virtual assets asany instrument, generated through cryptographic means providing a digital representation. In simple words, it includes all private crypto currencies.
True, the 30% taxation is punitive tax, a harsh levy that could discourage many in dealing in such assets. But, for an industry which was fearing a countrywide ban at one point, permission to exist even with a punitive tax rate is a blessing. The bigger takeaway from Sitharaman’s Budget statement is not the rate of tax but the fact that crypto assets have finally got recognition in India. By recognising crypto as a taxable asset, the government has acknowledged its existence along with other virtual assets. The legality of the crypto assets can still be debated. But logically how can a government tax something that is illegal?Secondly, by doing so, the government has also ignored the repeated public warnings by the RBI on crypto assets. To understand this point, let’s first look at why the RBI was opposing crypto in the first place.
Finance Minister Nirmala Sitharaman on February 1 announced the setting up of an animation, visual effects, gaming and comic (AVGC) promotion task force while presenting the Union Budget for 2022-23.
"AVGC offers immense potential to employ youth. An AVGC promotion task force, with all stakeholders, will be set up to recommend ways to realise this and build domestic capacity for serving out markets and the global demand," she said.
Players in the gaming industry have expected the formation of a task force to help boost employment in the sector.
