2022 – Union Budget Highlights

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2022 – Union Budget Highlights

Economy

  • Capex target expanded by 35.4 per cent — from Rs 5.54 lakh crore to Rs 7.50 lakh crore. FY23 effective capex seen at Rs 10.7 lakh crore
  • India’s growth highest among all major economies; we are now in a strong position to withstand challenges
  • The goal is complementing macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action
  • ECLGS cover expanded by Rs 50,000 to Rs 5 lakh crore
  • Top focus of the budget this year are: PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of investments
  • Productivity-linked incentive schemes in 14 sectors have received excellent response; received investment intentions worth Rs 30 lakh crore
  • Economic recovery benefitting from public investment and capital spending. This Budget will provide impetus to growth
  • In 2022-23, states will be allowed fiscal deficit of up to 4 pc of GSDP

Expenditure and deficit & other key numbers

  • Proposed fiscal deficit of 4.5% of GDP by 2025/26
  • Projected fiscal deficit of 6.4% of GDP in 2022/23
  • Revised fiscal deficit for 2021/22 at 6.9% of GDP
  • 50 year interest free loans over and above normal borrowing allowed for states
  • Scheme for financial assistance to states for capital investment outlay to be Rs 1 lakh crore for 2022/23
  • Public issue of Life Insurance Corporation expected shortly
  • Initiatives from last year’s budget have been provided adequate allocations in this budget
  • Receipt from disinvestment proceeds in next financial year pegged at Rs 65,000 crore, lower than the current year’s mobilisation of Rs 78,000 crore.

Taxes

  • Govt vows a stable and predictable tax regime
  • Govt to provide one-time window to correct omissions in ITRs filed, updated returns to be filed within 2 years
  • Any cess or surcharge on income not allowed as business expenditure
  • 1 per cent TDS on transfer of virtual assets above a threshold, gifts to be taxed
  • Surcharge on long-term capital gains capped at 15 per cent
  • The government will tax income from digital asset transfers at 30%
  • No deduction allowed while computing income except cost of acquisition
  • Loss cannot be set off from any other income
  • Gift of cryptocurrencies to be taxed at receiver’s end
  • A new provision to allow taxpayers to file an updated return
  • Updated return can be filed within 2 years from the end of the relevant assessment year.
  • Alternate Minimum Tax for cooperative societies to be cut to 15%
  • Proposal will reduce surcharge on cooperative societies to 7%, for those whose income is between Rs 1 crore and Rs 10 crore
  • Tax deduction limit increased to 14% on employers contribution to NPS account of state govt employees

Duties on Industry

  • Import duty on certain chemicals being/to be cut
  • Customs duty exemption on steel scrap will be extended for another year for MSMEs
  • Will revoke customs duty on stainless steel, flat products, high steel bars
  • Beginning October 2022, unblended fuel to get additional duty of Rs 2/litre
  • Import duty on cut and polished diamonds and gemstones to be cut 5 per cent and on sawn diamond to nil
  • Customs duty concessions to be given to certain consumer electronic devices to promote manufacturing across wearables, hearables and specific mobile phone components

Jobs

  • ECLGS extended till March 2023, 60 lakh jobs eyed in next 5 years
  • Efforts of central, state governments leading to jobs, entrepreneurial opportunities
  • Digital ecosystem for skilling and livelihood to be launched.
  • This will aims to skill, reskill, upskill citizens through online training.
  • API based skill credentials, payment layers to find relevant jobs and opportunities

Infra & manufacturing

  • Desh stack e-portal to be launched to promote digital infra
  • Strategic transfer of ownership of Air India completed now
  • Four multi-modal national parks contracts will be awarded in FY23
  • PM Gatishakti masterplan for expressways will be formulated in next financial year
  • 100 PM Gati Shakti terminals to be set up in next three years
  • Focus on public investment to modernise infrastructure over the medium term, leveraging tech platform of Gati Shakti via a multi-modal approach
  • PM Gati Shakti will pull forward the economy and will lead to more jobs and opportunities for the youth
  • Concessional corporate tax rate of 15 pc would be available for 1 more year till March 2024 for newly incorporated manufacturing companies

Steps on digital currency

  • Launch of blockchain-bassed digital rupee starting 2022-23
  • To launch scheme for taxation of virtual digital assets
  • Losses from sale of virtual digital assets cannot be offset against other income
  • Income from virtual digital assets to be taxed at 30%

Housing & urban planning

  • Rs 48, 000 crore is allotted for PM Awas Yojana
  • In 2022-23, 80 lakh houses will be completed for identified beneficiaries of PM Awas Yojana; 60,000 houses will be identified as beneficiaries for PM Awas Yojana in rural & urban areas
  • 60,000 crore allocated for providing access to tap water to 3.8 crore households
  • In 2022-23, 80 lakh households will be identified for the affordable housing scheme
  • Rs 60,000 cr allocated to provide tap water connections to 3.8 crore households in 2022-23
  • A high-level committee for urban planners and economists to be formed for recommendations on urban capacity building, planning implementation, and governance
  • 5 existing academic institutions for urban planning to be designated as Centre for Excellence with endowment fund of Rs 250 cr
  • Modern building by-laws will be introduced
  • A high-level panel to be set up for urban planning
  • Govt to promote use of public transport in urban areas
  • Proposal to reduce Minimum Alternative Tax to 15 pc for co-op societies, at par with corporate

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