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:
- For farmers to adopt to natural farming, comprehensive package for participation of State governments & MSMEs to be introduced.
- Hospitality services by the small & medium sector are yet to bounce back, therefore, the government has decided to extend the ECGL service for this sector by March 2023 with an increased cover of Rs 50,000
- Skilling programs will be reoriented. For skilling, upskilling & reskilling of our youth, Digital DESH e-portal will be launched.
- 'One Class One TV Channel' will be increased from 12 to 200 TV Channels to provide supplementary education in regional languages for class 1-12.
- A digital university will be developed to provide access to students for world-class quality education with ISTE Standards.
- For mental health counselling, a National Tele Mental Health Program will be launched
- Our government is committed towards Atma Nirbhar Bharat in armed forces. 68% of capital procurement budget will be earmarked for domestic industry for 2022-23 up from 58% in 2021-22, the FM said
- Rs 19,500 crore marked for PLI for manufacturing of high efficiency module for polysilicon.
- Financial support will be provided to farmers wanting to take up Agro-Forestry.
- 5-7% biomass pellets will be co-fired in thermal power plants resulting in carbon dioxide savings of 38 mmt annually.
- Outlay for capital expenditure increased by 35.4% from previous year to 7.50 lakh crore in 2022-23.
- Sovereign Green Bonds to be issued in public sector projects to reduce carbon footprint initiatives in the economy.
- To further electronics manufacturing, duty concessions given for high growth of electronics items.
- Customs duty on cut & polished diamonds, gems to be reduced to 5%.
- Duty concessions on parts of mobile phones.
- To levy 7.5% customs duty on select capital goods
- Gradually to have customs duty of 7.5% on projects imports
The Union Budget is the annual report of India as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March 31. The Union Budget is the most extensive account of the government's finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It comprises the revenue budget and the capital budget. It also contains estimates for the next fiscal year. Keeping with recent tradition, Union Finance Minister Nirmala Sitharaman will announce Union Budget 2022 today, on February 1. This year will be her fourth Budget after 2019, 2020 and 2021. She had read out the Budget from a tablet last year in Parliament; and from a Bahi Kata in the preceding years.
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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Budget 2022 Live Updates | Budget 2022 at a glance – your definitive, quick guide to one and a half hours of FM speech
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.
Budget 2022 Live Updates | What exactly are green bonds that FM announced in the budget and how are they issued?
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.
Budget 2022 Live Updates | What has become cheaper and what’s more expensive; check full list here
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.
Budget 2022: Equities have their day in the sun as dark clouds circle
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.
Budget 2022 Live Updates | Budget 2022 will double farmers' income, benefit MSMEs, says PM Modi
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.
Budget 2022: Builders welcome Rs 48,000 crore outlay for PMAY; upset over no tax sops for homebuyers, industry
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.
Budget 2022: Lack of private capex led to spending push in budget, will help lenders: Bankers
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.
Budget 2022 Live Updates | Health sector sees 45% drop in proposed expenses, allocation up 0.2%
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.
Budget 2022 Live Updates | Finance Minister steers clear of announcements for five poll-bound states
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.
Budget 2022 Live Updates | Crypto gets a backdoor entry in India
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.
Budget 2022: AVGC taskforce to boost employment, give regularity clarity, say gaming industry experts
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.
Budget 2022: Here’s what Finance Minister Nirmala Sitharaman said about taxing cryptocurrencies
Finance Minister Nirmala Sitharaman, while presenting the 2022-23 Union Budget on February 1, announced a 30 percent tax on income generated from the transfer of any digital asset.
However, she was quick to clarify that the Government of India is yet to recognise cryptocurrency. “We are only taxing the profit made on these assets since a large number of crypto assets are being bought and sold; we are now taxing cryptos so we know who is buying them and keep a tab on the money trail,” the Finance Minister explained.
Nirmala Sitharaman further said: “Will come out with crypto regulations and laws only after the consultation process is completed; cannot give any timeline for the completion of the consultation on cryptos.”
Budget 2022: Civil aviation gets Rs 10,667 crore but sees no relief from cost headwinds
The Union Budget has allocated Rs 10,667 crore for the civil aviation ministry for 2022-23, according to the document presented by Finance Minister Nirmala Sitharaman on Tuesday.
Out of the total allocation, Rs 600.7 crore has been earmarked for the regional connectivity scheme UDAN (Ude Desh ka Aam Naagrik), while Rs 9,259 crore goes to AI Asset Holdings Limited for servicing the loans transferred to the special purpose vehicle (SPV) for the financial restructuring of Air India.
An amount of Rs 165 crore has also been set aside for the medical benefits of retired Air India employees, the Budget document said.
In 2021-22, the civil aviation ministry was allocated Rs 3,224 crore, however, the government incurred high expenses during the divestment of Air India and, as a result, the revised expense for the civil aviation ministry during 2021-22 stood at Rs 72,652 crore.
Budget 2022 Live Updates | What the finance minister is doing ‘indirectly’ for consumption
TheBudget 2022is expected to revive consumption with its focus on infrastructure among others even though it lacks direct measures such as income tax rebates.“The budget will boost consumption indirectly, rather than directly. The announcements made under PM Awas Yojana and the ones to boost agriculture and rural economy will help in bringing back consumption, which has been declining in the last two years,” said Abheek Singhi, managing director and senior partner, BCG.According to Economic Survey 2022, released on January 31, private consumption declined to 57.5 percent of GDP in FY22, down from 58.6 percent in FY21. Consumer goods companies, industry experts and economists, hence, were expecting measures to revive consumption.
Budget 2022: After FM's remark on LIC IPO, secretary of DIPAM says 'DRHP likely in two weeks'
Shortly after Finance Minister Nirmala Sitharaman referred to the upcoming LIC IPO in her Budget 2022 speech, DIPAM secretary Tuhin Kanta Pandey on February 1 said the DRHP could be filed within the next two weeks.
"Draft red herring prospectus (DRHP) of Life Insurance Corporation IPO is expected within two weeks," Pandey, the secretary of the Department of Investment and Public Asset Management, said in the post-budget press briefing.
The much-awaited IPO of the life insurance behemoth is expected to be one of the biggest in the country, with the government aiming to raise close to $12 billion by selling a minority stake to the public.
Budget 2022: MC Interview | No mention of any tax reforms for bonds can be seen as unfavourable for market, says Navin Agarwal of Motilal Oswal AMC
Navin Agarwal, who is MD & CEO at Motilal Oswal Asset Management Company, says given the increased focus on capex and the realisation that the government will have to do the heavy lifting, the budget seems to be totally growth-oriented.
This budget was an extension of last year's with a significant focus on capex.
There were no specific negative announcements but "no mention of any tax reforms for bonds can be construed as unfavourable as the market was expecting them," says Agarwal in an interview with Moneycontrol.
Budget 2022 Live Updates | From digital currency to e-passports, Budget 2022 opens up more opportunities for Indian IT sector
If there is one key focus from the 2022 budget, it is that technology has become a key enabler across sectors from agriculture to health. With technology becoming a critical part, this would also provide huge opportunities for growth for the Indian IT sector, according to experts.In her budget speech on February 1, Finance MinisterNirmala Sitharaman, announced a range of initiatives including digital currency, e-passport, and 5G, where IT services firms can play a role.
Budget 2022: India may become $5 trillion economy by 2025-26: CEA Nageswaran
Chief Economic Advisor V Anantha Nageswaran believes that India can become a $5 trillion economy by the FY 2025-26 or 2026-27.
Addressing the press conference that was held after Finance Minister Nirmala Sitharaman tabled the Union Budget 2022-2023, the CEA said that if the GDP continues to grow at around 8 percent, a $5 trillion economy fo India is possible.
He said, "If we continue to retain the path of 8 per cent of real GDP growth, it will translate into even 8 per cent dollar GDP growth. If we extrapolate it, we should be a $5 trillion economy in terms of nominal GDP in the Financial Year 2025-26 or the Financial Year 2026-27".
Budget 2022: Capital expenditure sees 35.4 percent rise to Rs 7.50 lakh crore for FY'23
The central government has set aside Rs 7.50 lakh crore as capital expenditure in the Union Budget for FY 2022-23, a 35.4 percent jump when compared to FY 2021-22, Finance minister Nirmala Sitharaman said today in her Budget speech.
Sitharaman added that the effective capital expenditure of the central government is estimated at Rs 10.68 lakh crore in 2022-23, which is about 4.1 percent of GDP.
The Rs 10.68 lakh crore allocated for 2022-23 is 27 percent higher than the revised estimate of Rs 8.4 lakh crore spent in 2021-22.
Budget 2022 Live Updates | A mixed bag for startups
Themes around technology, digital and startups found prominent mention in Finance MinisterNirmala Sitharaman'sBudget speech on February 1, in what was also the shortest budget speech in her tenure so far. From agriculture to financial inclusion to space and defence - the government wants to create multiple ecosystems powered by technology and innovation.While the Budget underlined the government's commitment to the digital economy and infrastructure, peoplein the startupecosystem felt it was a mixed bag as it fell short of deliveringon crucial reforms around foreign direct listing, taxation, and ESOPs (employee stock options).
Budget 2022: 6 hidden money changes that finance minister did not spell out
The 91-minute short speech of Finance Minister Nirmala Sitharaman this morning had many provisions spelt out explicitly, but many were hidden in the detailed Finance Bill. Moneycontrol decodes some of those Budget proposals for you.
Donation deduction disallowed
Many of us donate money to charitable institutions and educational institutes. Now, if you look to claim benefits under your income tax return through Section 80G, then there are chances that you could be denied the deduction due to reasons beyond your control.
New registrations have been proposed for charitable trusts and organisations. Once that is past us, there are other documents they need to upload such as statement of donations. As per the Budget 2022 provisions, the deduction claimed by the donor will be disallowed in case the donee (research association, university, college or other institutions) fails to furnish the statement of donations. This will retrospectively come into effect from April 1.
Budget 2022: A look at some major tech boost for digital India
Finance Minister presented Budget 2022 in the Parliament on February 1. FM read her speech from a ‘Made in India’ tablet for the second consecutive year. The Union budget 2022-23 focused on the growth of ‘Digital India’. Take a look at the government’s initiatives to promote digital economy and giving a push to technology-enabled development in Budget 2022.
Budget 2022 Live Updates | Employment generation a recurring theme; capex push may create jobs but few misses too
Job creation seems to be therecurring theme of theUnion Budgetfor 2022-23 as Finance MinisterNirmala Sitharamanenhanced capex allocation to Rs 7.5 trillion and gave a thrust to infrastructure projects, PM housing scheme, and production-linked incentive (PLI) schemes."Capital investment holds the key to speedy and sustained economic revival and consolidation through its multiplier effect. Capital investment also helps in creating employment opportunities, inducing enhanced demand for manufactured inputs from large industries and MSMEs, services from professionals, and help farmers through better agri-infrastructure,"Sitharaman said in her Budget speech.She said the Productivity Linked Incentive (PLI) scheme in 14 sectors has "received excellent response, with a potential to create 60 lakh jobs".
Budget 2022: Nilesh Shah on Budget 2022: Shortest speech with the longest roadmap for the economy
In one of the shortest budget speeches in the recent past, the finance minister has laid out one the longest roadmaps for growth. This budget is a partnership budget encouraging public private partnership across sectors such as infrastructure, manufacturing, defence etc. The government will invest in building blocks for the centenary. The intention is visible from the sharp 35 percent increase in capital expenditure for FY-22. Government has also taken some liberty on the fiscal side so that spending can be increased to support growth by revising fiscal deficit to 6.9 percent. The budget covers almost all sectors starting from Agriculture to technology. There has been a lot of emphasis & encouragement in the budget on new-age themes such as digital technology & climate change. There have been no major surprises or shocks in the budget. Government has chosen to go the path of giving the tools for increasing investment, jobs and income in the medium to long term. In other words, the government’s focus has been to teach fishing rather than giving the fish to people.
Budget 2022: Focus on drones to help create $5 billion market, operators say
Finance Minister Nirmala Sitharaman’s mention of Drone Shakti, a mission similar to those aimed at conserving water and building infrastructure, is another step by the government to make India a drone hub by 2030. Experts said the initiative will help make India’s drone sector a $5 billion market.
A new integrated office is to be opened in the ministry of civil aviation to facilitate faster growth, coordination and approvals for drones, officials said, asking not to be identified.
“Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-as-a-Service (DrAAS),” Sitharaman said in her speech. The courses required for drone skills will be started in select Industrial Training Institutes in various states, she said.
Budget 2022 Live Updates | No respite for restaurants, left to fend for themselves, says NRAI
The restaurant industry, which was looking at restoration of input tax credit on the goods and services tax besides some liquidity support, remained disappointed with theUnion Budget 2022at a time when the businesses are reeling under the COVID-induced restrictions.
"It was very disappointing to see that no specific announcements were made for the restaurant industry and we are yet again left to fend for ourselves," Kabir Suri, Presidentof the National Restaurant Association of India (NRAI) and co-founder of Azure Hospitality, said in a statement.Multiple state governments have restricted timings for eateries to curb the spread of COVID-19. This has dealt a massive blow to the business and these outlets are trying to claw back to the pre-pandemic levels.
Budget 2022 Live Updates | Petrol may cost more as additional duty of Rs 2/litre to be imposed on unblended fuel from Oct 1
Unblended petrol and diesel could become more expensive as the government plans to impose an additional differential excise duty of Rs 2 a litre on it.TheUnion Budgetleft the excise duty on fuel unchanged and introduced an additional differential excise duty of Rs 2 a litre on the unblended variant from October 1.“Blending of fuel is a priority of this government. To encourage the efforts for blending of fuel, unblended fuel shall attract an additional differential excise duty of Rs 2 a litre from the 1st day of October 2022,” Finance MinisterNirmala Sitharamansaid Tuesday.
Budget 2022 Live Updates | A breakdown of the key numbers for FY23
Hopes were pinned onBudget 2022to turn the wobbly Indian economy battered by the pandemic back on the growth track. While it is important to understand the government's intent behindpolicy measures, the best indicators of the economic issues are the underlying numbers.The Centre's ability to spend in FY23 is determined by the extent of fiscal consolidation it looks to achieve. A fiscal deficit target of 6.4 percent of the Gross Domestic Product (GDP), or Rs 16.61 lakh crore, seems to provide plenty of room to keep the spending pedal pressed.
Budget 2022: NFT players weigh in impact of 30% tax on virtual digital assets
Finance Minister Nirmala Sitharaman while presenting Budget 2022 announced that virtual digital assets will be taxed and any income from transfer of such asset shall be taxed at 30 percent.
Priyanka Khimani, global IP Legal and Business expert said that this is intended to bring digital assets such as cryptocurrency and NFTs (non-fungible tokens) into the fold.
The NFT space in India started gaining steam since last year when Bollywood celebrities like Amitabh Bachchan and sports stars like Yuvraj Singh launched their digital collectibles. "One of the demands of IndiaTech.org was to come out with the term for the virtual digital asset class and that there should be clarity on taxability. Non-fungible tokens (NFTs) have been also defined in the Budget," said Rameesh Kailasam, CEO, IndiaTech.org.
While some in the NFT industry are welcoming clarity on taxability, others raised concerns on the hefty tax rate.
"Capital gains would expectedly attract tax, however twice the regular rate is a curious outcome. It's certainly a dissuasive decision since a few traders/investors do make outsized gains but it does still allow for the sector to function," said Dhruv Saxena The Chief Strategy Officer of Vistas Media Capital.
Budget 2022 | Here is how the crypto tax will impact investors
Finance Minister Nirmala Sitharaman’s Budget announcement on taxing virtual assets created a buzz, as it is the first clear sign of how the government plans to go ahead with this popular asset class. But certain aspects still remain unclear.
Moneycontrol spoke to experts to find out what the taxing of “virtual assets” means for the larger industry.
Budget 2022 | Real estate sector welcomes Rs 48,000 crore allocation for affordable housing; homebuyers disappointed
The real estate sector welcomed 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 homebuyers expressed unhappiness over the absence of any additional tax deduction on interest paid on home loans or relief for buyers stuck with incomplete projects.
Budget 2022 has allocated an outlay of Rs 48,000 crore under the Pradhan Mantri Awas Yojana, and the construction of 80 lakh homes will facilitate affordable housing. However, there were no incentives for homebuyers in the lower and middle-income groups.
Budget 2022 | No word on electricity to be brought under GST disappoints sector players
Power producing companies were left wanting as the Union Budget did not acknowledge their wish for including electricity under the purview of the goods and services tax (GST).
The industry had been demanding the inclusion of electricity in GST as it could bring down the cost of electricity and subsequently benefit consumers. Bringing electricity under GST would have meant reduction of tax revenue of both the central and state governments.
The final decision on GST is taken by the Council, which is a joint forum of the Centre and the states. But power sector players had hoped for a recommendation in the Budget from Finance Minister Nirmala Sitharaman, who heads the council.
“The one thing that the power and renewable industry had specifically requested for was GST and that doesn’t find place in the Budget; that obviously is disappointing. But one has to be realistic, every industry has needs and the government has to strike a balance,” said Rajiv Ranjan Mishra, Managing Director, Apraava Energy Private Ltd (formerly, CLP India). He is also Co-Chairman, Confederation of Indian Industry (CII) National Committee on Power.
Budget 2022 Live Updates | FM pegs fiscal deficit at 6.4% of GDP for FY23
Finance ministerNirmala Sitharamanon February 1 pegged the government’s fiscal deficit for the financial year 2022-23 at 6.4% of gross domestic product (GDP) as thebudgetrecognised the need to boost growth.The Union government’s fiscal deficit was down 35.3 percent year-on-year at Rs 6.96 lakh crore in April-November 2021 period, accounting for 46.2 percent of the Budget estimate for the current financial year, as tax collections remained robust and spending muted.The Budget for 2021-22 pegged the fiscal deficit for the full year at Rs 15.07 lakh crore, or 6.8 percent of GDP, which has been revised to 6.9 percent.The budget has proposeda fiscal deficit of 4.5% of GDP by 2025-26. A fiscal deficit of 4% of GSDP will be allowed for states in 2022-23.Revenue deficit is seen at 3.8% of GDP in 2022-23.
Here's budget analysis for all readers by Ernst & Young Global Limited:
Budget 2022 Live Updates | 1486 union laws repealed to make it easier for businesses
Finance MinisterNirmala Sitharamanannounced the repeal of 1,486 union laws during theUnion Budgetfor 2022-23. Sitharaman said that the government had repealed over 25,000 compliances in recent years.The repeal of the around 1,500 union laws is aimed at improving India’s ranking in the Ease of Doing Business index.Sitharamannotes that this is a result of the government’s strong commitment to “minimum government and maximum governance.”Sitharaman said, “Our trust in the public and ease of doing business is what is highlighted here.” Further adding, “the next phase of ease of doing business (Ease of doing business 2.0) and ease of living will be launched. In our endeavor to improve productive efficiency of capital and human resources, we will follow the idea of trust-based governance.”
Budget 2022 Live Updates | Shanti Ekambaram, Group President – Consumer Banking, Kotak Mahindra Bank Limited:
"Union Budget 2022-23 focusses on key growth engines of the economy - infrastructure, education, healthcare, housing and rural development. Finance Minister Nirmala Sitharaman has focused on allocation to build the foundation for economic growth over many years.
The government has set a capital expenditure target of Rs. 7.5 lakh crore for FY 23 from Rs 5.54 lakh earlier. The budget has allocated Rs 1 lakh crore to states for the PM Gati Shakti-related projects and for other productive investments. Extension of the Emergency Credit Line Guarantee Scheme until March 2023 is a welcome move to infuse further liquidity in the MSME sector. A sum of Rs 48,000 crore is allotted for the PM Awas Yojana that will benefit 60,000 houses in rural and urban segments. Introduction of a Digital Rupee by RBI and setting up of 75 digital banking units in 75 districts by commercial banks is a big boost to the digital ecosystem. The government has given ample allocation to provide a framework for businesses to invest and grow.
In the second consecutive year of the COVID-19 pandemic, the budget has focused on the right areas to put the economy on fast-track."
Budget 2022 Live Updates | FM Sitharaman announces Digital Rupee. Here's how it will work
Union Finance MinisterNirmala Sitharamanon February 1 said the Reserve Bank of India (RBI) will launch a central bank digital currency (CBDC) in 2022-23, marking the first official statement from the Union government on the launch of much-awaited digital currency.The FM said introduction of CBDC will give boost to digital economy. The RBI had earlier indicated that CBDC is on the cards while the central bank is against the idea of permitting private virtual currencies.The FM announced that the RBIwill launch Digital Rupeeand said introduction of CBDC will further enhance India's status as a digital economy given its world-class digital payments system.
Budget 2022 Live Updates | All 1.5 lakh post offices in India to be connected to core banking system: Nirmala Sitharaman
All 1.5 lakh post offices in India will be connected to the core banking system that will enable people to access their account online and also transfer money within post office accounts and to other banks, Finance MinisterNirmala Sitharamanannounced on Tuesday."In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through net banking, mobile banking ATMs and also provide online transfer of funds between post office accounts and bank accounts," Sitharaman said.He added that this will be helpful especially for farmers and senior citizens in the rural areas enabling interoperability and financial inclusion.
Budget 2022 Live Updates | Ravi Subramanian, MD & CEO, Shriram Housing Finance:
“Budget 2022 is focused on growth. It aims to pull the Indian economy out of the COVID-led challenges. The government acknowledged the need of the hour and has walked the talk with its infrastructure-spending plan. The 35% increase in capital expenditure will boost systemic credit and ease funding access across sectors.
The government has continued its thrust on the housing sector with an allocation of Rs 48,000 crore under the PMAY scheme to expand access to affordable home funding. Measures such as fast-tracking land and construction-related approvals and processes, and digitisation of land records will also greatly benefit the housing and real estate ecosystem.The Finance Minister today announced setting up a committee for urban sector policy and capacity building, with a focus on mass transit systems and public transport in urban areas. The critical focus on urban development and planning, and facilitating development of tier-2 and tier-3 cities is a timely move in the right direction to deal with the expected challenges of increased urbanization and urban housing."
Budget 2022 Live Updates | Anil G Verma, Executive Director and President, Godrej & Boyce:
“The Budget for FY 2023 holds a lot of promise for the economy. It has a thrust for the social sector with investments in primary and vocational education, provision for drinking water to reach more households and the extension of the PM Awas Yojana to provide housing. In addition, its outlay for procurement of agricultural produce will reward the farmers for their effort and put money in their hands which will help to propel consumption demand.
The focus on the logistics sector through the PM Gati Shakti plan will give a fillip to the economy. Logistics costs in India count among the highest in the world. Creation of infrastructure is the best way to reduce the costs and introduce competitiveness in the economy to serve both the domestic market and exports. The initiative of spurring investments from the private sector by taking the lead through government investments of Rs. 7.5 lakh Cr. is laudable. The PLI scheme outlay for solar modules will support the solar power generation projects which are currently facing steep cost increases and supply constraints. Support for domestic manufacture of capital equipment by doing away with duty exemptions is also a welcome step.
Reforms in customs administration will no doubt support both the SEZs as well as other manufacturers in the domestic tariff area. Our SEZs are vulnerable to both disruptions in the global supply chain and also the emphasis on domestic sourcing that we increasingly see overseas. Permission to sell part of the capacity in DTA while maintaining a level playing field with domestic manufacturers will enhance scale and competitiveness whilst reducing reduce vulnerability.
Budget 2022 Live Updates | Shyam Srinivasan, MD and CEO, Federal Bank:
"The budget stands out as one that is incredibly multi-faceted and will have a real impact. FM has aimed at policy deliberation but while eschewing grandiose solutions or extensive claims, this indicates the outright truism of the government - ‘Karmanye Vadhikaraste Ma Phaleshu Kadachana’.
35% increase in capex for infra development, 65% defense capex for local cos, tax incentives for startups, new cargo terminals – all indicate the refreshingly clear and well-structured aspiration of Atmanirbhar Bharat. Digital economy getting an enhanced call-out for formalization is a welcome move. The demanding need of green infra in the country has also been promisingly addressed in the form of the maiden Sovereign Green Bond. Overall, the optimism is retained, and all of this would give the perfect nudge to our MSMEs. The banking sector would certainly benefit from this, key of course would be improved participation and not a veneering attempt."
Budget 2022 Live Updates | Prof T. K. Srikanth, Head of E-Health Research Center, IIIT Bangalore:
“The E-Health Research Center at IIITB has been working with NIMHANS, National Health Mission, Govt of Karnataka, on e-Manas, a first of its kind, software platform for mental health management. This has been deployed by the Govt of Karnataka and is being extended to the monitoring of the DMHPprogram as well as psychiatric rehabilitative services. As part of the tele mental health network that NIMHANS will now help setup, IIITB will help integrate eManas with tele-health services, thus providing a comprehensive platform for mental health care that can scale up nationally.”
Budget 2022 Live Updates: Budget 2022 visionary, says NITI Aayog Vice-Chairman Dr Rajiv Kumar
Commenting on Budget 2022,NITI Aayog Vice-Chairman Dr Rajiv Kumar said, "I believeBudget 2022is visionary. MGNREGA is doing well currently; with increase in employment in manufacturing &service sectors,need for MGNREGA will reduce...Govt is improving middle-class situation by improving country's economic speed"
Budget 2022 Live Updates | Nikhil Sahni, Country Corporate Officer, India & Division President, South Asia, Mastercard:
"Mastercard welcomes the continued focus on digital and financial inclusion in the Finance Minister’s Budget 2022 speech. Setting up Digital Banking Units (DBUs) and bringing post offices into the core banking system, will help expand the reach of financial services to the last mile. The extension of Emergency Credit Line Guarantee Scheme (ECLGS) will boost MSME recovery and growth by providing them with liquidity and helping them meet working capital requirements. Start-ups will benefit from tax benefits that will spur further innovation and boost employment in the country."
Budget 2022 Live Updates | Puneet Pal, Head Fixed Income PGIM India Mutual Fund:
The Budget continues to focus on Growth and does so in a credible fashion. The government continues to improve the mix of overall expenditure by increasing the allocation to capital spending by 35%, reducing subsidies and laying the path for an Investment led recovery.
The Revenue projection seem reasonable, rather conservative, with Tax revenues budgeted to grow at 9.60% , The disinvestment target of INR650bn for FY23 also looks quite reasonable. So revenue projections are quite credible. The revenue deficit is budgeted to come down to 3.8% from 4.70%.
The government also announced that they will issue sovereign green bonds to fund the green infrastructure in the country and the Finance minister said in the post budget press conference that these bonds will form part of the gross borrowing but the details regarding the nature of the instrument and the quantum were not given.
The government announced a wider than expected fiscal deficit for FY22 and FY23. A fiscal deficit of 6.9% of GDP for FY22, versus the budgeted target of 6.8% of GDP ( Market expectation was 6.5% - 6.6% of GDP).
A fiscal deficit of 6.4% of GDP for FY23 ( market was expecting 6.00% - 6.2% of GDP). The fiscal deficit number is pegged at INR16.61 trn.
Budget 2022 Live Updates: Focus on inclusive development, climate action as India enters "Amrit Kaal", Nirmala Sitharaman
TheUnion Budget 2022, which is currently being presented by finance ministerNirmala Sitharamanin the parliament, seeks to lay the foundation of the Indian economy, just as the country progresses in its "Amrit Kaal" of 25 years.Notably, inthe run-up to celebrating 100 years of Indian independence, the government aims to focus on the following major pillars, which include inclusive development, energy transition, climate action, productivity enhancement, and financing of investments, with special emphasis on PM Gati Shakti.
Budget 2022 Live Updates: FM Nirmala Sitharaman proposes to set up 75 digital banking units; link 100% of post offices to Core Banking
Finance MinisterNirmala Sitharamanin theUnion Budget 2022, proposed to set up 75 digital banking units in 75 districts across India by scheduled commercial banks. The FM announced the initiative to celebrate India’s 75 years of independence and to push the benefits of digital banking in every nook and corner of the country.In herBudget 2022speech,Sitharamanalso said that financial support for the digital payment ecosystem announced in the previous budget will continue in 2022-2023 as well, encouraging further adoption of digital payments.
Budget 2022 Live Updates: What are e-passports and how will they work?
While presenting herBudget speechon February 1, Finance MinisterNirmala Sitharamansaid the government will roll out e-passports in FY22-23."The issuance of e-passports will be rolled out in 2022-23 to enhance convenience for citizens," Sitharaman said as part of her Budget speech today.Sanjay Bhattacharyya, Secretary to theMinistry of External Affairs, hadrecently saidthat India could soon start issuing e-passports that will use radio-frequency identification (RFID) and biometrics.
