The Union Budget seeks to complement macro-economic level growth with a focus on micro-economic level all inclusive welfare. The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament today.
The key highlights of the budget are as follows:
India’s economic growth estimated at 9.2% to be the highest among all large economies.
60 lakh new jobs to be created under the productivity linked incentive scheme in 14 sectors.
PLI Schemes have the potential to create an additional production of Rs 30 lakh crore.
Entering Amrit Kaal, the 25 year long lead up to India @100, the budget provides impetus for growth along four priorities:
Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action.
Financing of investments
The seven engines that drive PM GatiShakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure.
PM GatiShkati National Master Plan
The scope of PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency.
The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with PM GatiShakti framework.
Multimodal Logistics Parks
One Station One Product concept to help local businesses & supply chains.
2000 Km of railway network to be brought under Kavach, the indigenous world class technology and capacity augmentation in 2022-23.
400 new generation Vande Bharat Trains to be manufactured during the next three years.
100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.
National Ropeways Development Program, Parvatmala to be taken up on PPP mode.
Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 Km length.
Rs. 2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat and paddy.
Chemical free Natural farming to be promoted throughout the county. Initial focus is on farmer’s lands in 5 Km wide corridors along river Ganga.
NABARD to facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
‘Kisan Drones’ for crop assessment, digitization of land records, spraying of insecticides and nutrients.
Ken Betwa project
Udyam, e-shram, NCS and ASEEM portals to be interlinked.
130 lakh MSMEs provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS)
ECLGS to be extended up to March 2023.
Guarantee cover under ECLGS to be expanded by Rs 50000 Crore to total cover of Rs 5 Lakh Crore.
Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs 6000 Crore to be rolled out.
· Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).
‘One class-One TV channel’ programme of PM eVIDYA to be expanded to 200 TV channels.
· Virtual labs and skilling e-labs to be set up to promote critical thinking skills and simulated learning environment.
· High-quality e-content will be developed for delivery through Digital Teachers.
· Digital University for world-class quality universal education with personalised learning experience to be established.
· ‘National Tele Mental Health Programme’ for quality mental health counselling and care services to be launched.
Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
Two lakh anganwadis to be upgraded to Saksham Anganwadis.
Har Ghar, Nal Se Jal
Housing for All
Prime Minister’s Development Initiative for North-East Region (PM-DevINE)
New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth and women under the scheme.
Vibrant Villages Programme
Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.
Land Records Management
Accelerated Corporate Exit
AVGC Promotion Task Force
An animation, visual effects, gaming, and comic (AVGC) promotion task force to be set-up to realize the potential of this sector.
AtmaNirbharta in Defence:
· Defence R&D to be opened up for industry, startups and academia with 25% of defence R&D budget earmarked.
· Independent nodal umbrella body to be set up for meeting testing and certification requirements.
Government contribution to be provided for R&D in Sunrise Opportunities like Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems.
Energy Transition and Climate Action:
· Five to seven per cent biomass pellets to be co-fired in thermal power plants:
CO2 savings of 38 MMT annually,
Extra income to farmers and job opportunities to locals,
Help avoid stubble burning in agriculture fields.
· Four pilot projects to be set up for coal gasification and conversion of coal into chemicals for the industry
· Financial support to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry.
Public Capital Investment:
· Outlay for capital expenditure stepped up sharply by 35.4% to Rs. 7.50 lakh crore in 2022-23 from Rs. 5.54 lakh crore in the current year.
· Outlay in 2022-23 to be 2.9% of GDP.
· Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystem. Measures to be taken to help scale up this investment.
· Blended funds to be promoted for sunrise sectors.
· Sovereign Green Bonds to be issued for mobilizing resources for green infrastructure.
Providing Greater Fiscal Space to States
· Allocation of Rs. 1 lakh crore in 2022-23 to assist the states in catalysing overall investments in the economy: fifty-year interest free loans, over and above normal borrowings
· Revised Estimates 2021-22: Rs. 37.70 lakh crore
· Total expenditure in 2022-23 estimated at Rs. 39.45 lakh crore
· Total receipts other than borrowings in 2022-23 estimated at Rs. 22.84 lakh crore
· Fiscal deficit in current year: 6.9% of GDP (against 6.8% in Budget Estimates)
To take forward the policy of stable and predictable tax regime:
Introducing new ‘Updated return’
Provision to file an Updated Return on payment of additional tax.
Will enable the assessee to declare income missed out earlier.
Can be filed within two years from the end of the relevant assessment year.
To provide a level playing field between cooperative societies and companies.
Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crores.
Tax relief to persons with disability
Payment of annuity and lump sum amount from insurance scheme to be allowed to differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardian attaining the age of 60 years.
Parity in National Pension Scheme Contribution
Tax deduction limit increased from 10 per cent to 14 per cent on employer’s contribution to the NPS account of State Government employees.
Brings them at par with central government employees.
Would help in enhancing social security benefits.
Incentives for Start-ups
Period of incorporation extended by one year, up to 31.03.2023 for eligible start-ups to avail tax benefit.
Previously the period of incorporation valid up to 31.03.2022.
Incentives under concessional tax regime
Scheme for taxation of virtual digital assets
Specific tax regime for virtual digital assets introduced.
Any income from transfer of any virtual digital asset to be taxed at the rate of 30 per cent.
No deduction in respect of any expenditure or allowance to be allowed while computing such income except cost of acquisition.
Loss from transfer of virtual digital asset cannot be set off against any other income.
To capture the transaction details, TDS to be provided on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold.
Gift of virtual digital asset also to be taxed in the hands of the recipient.
In cases where question of law is identical to the one pending in High Court or Supreme Court, the filing of appeal by the department shall be deferred till such question of law is decided by the court.
To greatly help in reducing repeated litigation between taxpayers and the department.
Tax incentives to IFSC
Rationalization of Surcharge
Surcharge on AOPs (consortium formed to execute a contract) capped at 15 per cent.
Done to reduce the disparity in surcharge between individual companies and AOPs.
Surcharge on long term capital gains arising on transfer of any type of assets capped at 15 per cent.
To give a boost to the start up community.
Health and Education Cess
Deterrence against tax-evasion
Rationalizing TDS Provisions
Benefits passed on to agents as business promotion strategy taxable in hands of agents.
Tax deduction provided to person giving benefits, if the aggregate value of such benefits exceeds Rs 20,000 during the financial year.
Remarkable progress in GST
Special Economic Zones
Customs Reforms and duty rate changes
Project imports and capital goods
Gradually phasing out of the concessional rates in capital goods and project imports; and applying a moderate tariff of 7.5 percent – conducive to the growth of domestic sector and ‘Make in India’.
Certain exemptions for advanced machineries that are not manufactured within the country shall continue.
A few exemptions introduced on inputs, like specialised castings, ball screw and linear motion guide – to encourage domestic manufacturing of capital goods.
Review of customs exemptions and tariff simplification
More than 350 exemption entries proposed to be gradually phased out, like exemption on certain agricultural produce, chemicals, fabrics, medical devices, & drugs and medicines for which sufficient domestic capacity exists.
Simplifying the Customs rate and tariff structure particularly for sectors like chemicals, textiles and metals and minimise disputes; Removal of exemption on items which are or can be manufactured in India and providing concessional duties on raw material that go into manufacturing of intermediate products – in line with the objective of ‘Make in India’ and ‘Atmanirbhar Bharat’.
Sector specific proposals
Customs duty rates to be calibrated to provide a graded rate structure – to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters.
Duty concessions to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items – To enable domestic manufacturing of high growth electronic items.
Gems and Jewellery
Customs duty on umbrellas being raised to 20 per cent. Exemption to parts of umbrellas being withdrawn.
Exemption being rationalised on implements and tools for agri-sector which are manufactured in India. Customs duty exemption given to steel scrap last year extended for another year to provide relief to MSME secondary steel producers.Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked – to tackle prevailing high prices of metal in larger public interest.
To incentivise exports, exemptions being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes.Duty being reduced on certain inputs required for shrimp aquaculture – to promote its exports.
Tariff measure to encourage blending of fuel