India’s Union Budget 2022-23, which is growth-oriented and pro-development, aims to lay the economic foundation for the next 25 years. Despite multiple waves of COVID-19 infection, supply-chain disruptions, and inflation, the Indian economy is expected to grow at a rate of 9.27% this fiscal year, indicating that overall economic activity has recovered from pre-pandemic levels.
With elections looming in five states, the Union Budget for the financial year in India was expected to focus on addressing the unemployment crisis. One of the things Finance Minister Nirmala Sitharaman needed to do in this regard was to increase government spending, which she appears to have done, with a 35.4 percent increase in capital expenditures. In this blog, we look at the numbers in the Union Budget and try to figure out what they mean for the average person.
Overview Of The Union Budget For India
Nirmala Sitharaman, the finance minister, presented a budget worth Rs 39.45 lakh crore on Tuesday, with a big push on infrastructure spending. The government’s main objective is to increase job creation and boost economic activity by expanding national highways, providing affordable housing, and manufacturing 400 new Vande Bharat trains, among other things. The total expenditure of the government will see a boost by 4.6 percent over the current year, with states receiving an additional Rs 1 lakh crore in support.
The Union Budget 2022-23 is built around four key pillars with the goal of boosting domestic manufacturing and creating jobs after a two-year increase in unemployment.
- Inclusive Development
- Productivity Enhancement
- Financing Investments and
- PM GatiShakti.
Union Budget: What Is The Budget Of India?
The Union Budget is the Indian government’s annual budget. The Finance Minister of India presents it to Parliament. The Union Budget is a significant document that outlines the government’s financial plans for the coming financial year in India.
The Union Budget usually includes information on the government’s spending priorities, tax proposals, and economic projections. The Union Budget is a significant document because it reflects the government’s priorities and future plans. It also decides how much money will be spent on various aspects of society, such as education, health, infrastructure, and social welfare.
Union Budget India: Do Farmers Get What They Deserve?
The focus of the budget was to increase the introduction of technology in the agricultural sector, from Kisan drones to public-private partnerships to help deliver high-tech services to farmers. To provide such high-tech services to farmers, private agritech companies are likely to partner with the government under a public-private partnership (PPP) scheme.
Along with a focus on increasing farmers’ digital presence, the proposal also provides a much-needed boost to agritech start-ups, including a blended capital fundraised through the co-investment model, which will be facilitated by NABARD. In addition, chemical-free natural farming will be promoted across the country, with a focus on farmers’ lands along the Ganga’s 5km wide corridors.
Samyukta Kisan Morcha: The Budget May Be “Anti-farmer”
The Samyukta Kisan Morcha, which claims the Union Budget for 2022-23 demonstrates the government’s lack of concern for farmers’ welfare, called on farmers on Tuesday to prepare for another “massive struggle” over the minimum support price.
The umbrella body of farm unions, which spearheaded protests against the Centre’s now-repealed agri laws, claimed that the share of agriculture and related activities in the Budget had been reduced to 3.8 percent from 4.3 percent the previous time. It claimed that the government wanted to “punish” farmers for their successful year-long protests at Delhi’s borders, which were called off after the contentious farm laws were repealed in Parliament last year.
FMCG Manufacturers: Higher MSP Allocation
Leading FMCG firms said on Tuesday that the Union Budget is “futuristic” and “growth-oriented,” with higher minimum support prices for farmers helping to drive consumption of FMCG products in the hinterland and increased public expenditure having a multiplier effect on growth.
Union Budget India: National Tele-Mental Health Program
Clearly, the pandemic had a negative impact on education, particularly in government-run schools. The ‘one class, one TV channel’ program started by PM eVIDYA, will be expanded from 12 to 200 TV channels to enable states to provide supplementary education in regional languages for classes 1 to 12. This has come as a relief in the budget.
With the pandemic exacerbating mental health issues in people of all ages, India’s government has announced plans to establish a National Tele-Mental Health program. While this will help the mental health sector, it will not help other vital services in the healthcare sector.
Healthcare Experts: Their Take
Healthcare experts said on Tuesday that while the proposed National Telemental Health Program was a welcome step by the Centre, especially given the long COVID, the Union Budget did not devote enough attention to other critical issues such as health insurance incentives and skill development.
Union Budget India: Har Ghar, Nal Se Jal
Har Ghar, Nal SeJal: PM Awas Yojana said that 3.8 crore households are to be covered. All infrastructure and social development will be funded based on the felt needs of the North East.
Vibrant Villages Program: The Vibrant Villages Program aims to develop villages on the Northern Border that unfortunately missed out on any development.
PM Modi: New Opportunities
In a televised statement, Prime Minister Modi stated that the welfare of the poor was an important aspect of the Union Budget. “It aims to address current issues and provide new opportunities for the general public,” he said. “The budget aims to provide every poor household with a pucca house, toilet, running water, and a gas connection. At the same time, modern Internet connectivity is a priority,” the prime minister stated.
Vice-Chairman of the NITI Aayog: The Budget Is A Visionary
The Union Budget 2022-23 is described as “visionary” by the Vice-Chairman of the NITI Aayog. According to him, MGNREGA is currently performing well; however, as employment in the manufacturing and service sectors grows, the need for MGNREGA will diminish. Govt is improving the middle-class situation by improving the country’s economic speed
Union Budget India: Digitalization
Post Offices to Offer Digital Banking
All post offices will be connected to the core banking system. 75 digital banking units will be established in 75 districts by scheduled commercial banks. On the productivity and investment front, important steps such as IT bridges connecting central and state systems, an end-to-end online e-billing system, and the use of surety bonds in government procurement, support for 5G under the PLI scheme, and opening defense R&D to industry, start-ups, and academia were also announced. Simultaneously, measures such as the issuance of chip-enabled e-passports and the implementation of a battery swapping policy as an alternative to installing charging stations in urban areas will have a positive impact on people’s lifestyles.
The Reserve Bank of India’s proposed introduction of a digital rupee based on blockchain and other technologies could make currency management more efficient and less expensive.
On the fiscal front, there was chatter that the government would miss its fiscal deficit target by a large margin. However, the Finance Minister has announced only a minor reversal: the fiscal deficit is now expected to be 6.9% of GDP in 2021-22, compared to a target of 6.8%. The Finance Minister has set a goal of bringing the fiscal deficit down to 6.4 percent of GDP in 2022-23, in line with the consolidation path.
On the direct tax front, the basic income tax exemption limit, income slabs, and tax rates have remained unchanged. The rate of surcharge on all long-term capital assets has been set at 15%. The option of filing updated returns within two years of the end of the assessment year has been made available, subject to the payment of additional taxes and the fulfillment of conditions. People in the disability category will also benefit from the proposals.
The time for eligible start-ups to incorporate has been extended by one year. In order to qualify for the concessionary tax regime, newly incorporated manufacturing entities will be given an additional year to begin manufacturing. The income earned from the transfer of virtual assets will be taxed at a rate of 30%. Better litigation management is also emphasized in the budget to avoid repeat appeals. Foreign dividends will no longer be taxed at a concessionary rate of 15% in 2022, the financial year in India.
In the case of indirect tax, the time limit has been extended by two months (until November 30) for transactions from the previous fiscal year, such as credit requests and credit note issuance. SEZ reforms include the replacement of the SEZ Act, changes to SEZ customs administration, risk-based intervention, and the use of a common EDI platform (w.e.f. 30 September 2022).
Union Budget India: Tourism
In the Union Budget 2022, the Union Budget has allocated Rs 2,400 crore to the Ministry of Tourism, which is 18.42% more than what was allocated in last year’s budget, bringing some relief to a sector deeply affected by the Covid pandemic.
Union Budget India: Science, Technology, And Infrastructure
Ministry of Science and Technology
The Union Budget for 2022-23 allocates Rs 14,217 crore to the Ministry of Science and Technology, a decrease of 3.9 percent from the previous financial year in India. Department of Science and Technology (DST), Department of Biotechnology, and Department of Scientific and Industrial Research are the three departments that are the major pillars of the DSIR ministry. The Department of Science and Technology will receive Rs 6,000 crore, the Department of Biotechnology will receive Rs 2,581 crore, and the Department of Scientific and Industrial Research will receive Rs 5,636 crore.
The focus of Budget 2022 on technology and infrastructure, according to Odisha’s chief minister, will have a positive impact. Naveen Patnaik, the Chief Minister of Odisha and the leader of the BJD said that in order to alleviate supply-side constraints, production-linked initiative schemes in 14 sectors and the extension of the Emergency Credit Line Guarantee Scheme would be beneficial.
Assam’s chief minister claims that the FM has taken care of the state’s finances.
State borrowing increased by 0.5 percent and is linked to power sector reforms, which will immediately expand the state government’s fiscal space and aid in the recovery of the post-COVID economy. Assam Chief Minister and BJP leader Himanta Biswa Sarma confirm that the FM has taken care of the state’s finances in general.
Union Budget India: Equality and Evolution Of Women
According to Rajnath Singh, turning an experimental scheme of induction of female fighter pilots into a permanent scheme demonstrates the Prime Minister’s commitment to women’s empowerment.
The opposition parties were united in their criticism of the Union Budget 2022, praising it for its lack of initiatives to boost employment and lower inflation. They claimed that the budget was designed solely to benefit the wealthy. And they may be right. Only the future can tell.