FM Announced Brave & Progressive Union Budget 2022: Gaurav Bora

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Gaurav Bora, Market Expert

FM Nirmala Sitharaman announced Brave & Progressive Union Budget 2022.  This Budget seems to be good as there are no negatives in the Budget. The State elections will be mid-term assessment of PM Modi’s popularity ahead of national election in 2024. It clearly shows rather than focusing more on upcoming state elections FM focused on Growth of Economy that made it more courageous. FM Nirmala Sitharaman presented a budget that calls for a bigger spend to fire up growth in Indian economy, as it stages a world beating recovery from pandemic.

Highlights of Budget 2022

• GDP growth for FY 22 expected to be 9.2%, the highest for any large economy.
•  PLI (Production Linked Incentive scheme) in 14 sectors for Aatmanirbhar Bharat to create 6 million jobs, additional allocation of Rs 19,500 crore for PLI in solar PV module manufacturing.
• Promoting Fintech and digital economy a focus area for this Budget.
•  75 digital banking systems in 75 districts by scheduled commercial banks.
•  IBC to be amended to improve efficiency of resolution process including cross border.
•  Core Banking Services to start in all Post offices.
•  PM Gati-shakti masterplan has scope to enhance Multimodal communication through 7 engines, 2000 km of rail network to be brought under KAVACH & Highway network to grow by 25,000 km in FY23.
• To make new 400 Vande Bharat trains in 3 years. 
• Contracts for implementation of multimodal logistics parks at 4 locations to be awarded in 2022-23, in PPP Mode.
•  ECLGS (Emergency Credit Line Guarantee Scheme) to be extended up to March 2023, guaranteed cover extended by another Rs 50,000 crore.
•  8 million new dwelling in rural, urban areas to be completed under PM Awas yojana.
• Rs 2.37 trillion worth of MSP direct payments to wheat and paddy farmers.
•  Rs 2 trillion outlay for MSMEs, Additional loans for 13 Mn MSMEs.
•  Rs 48,000 crore allocated to housing projects under PM Housing Scheme for FY23, Rs 1,500 crore allocated for development of the Northeast in FY23 & Desh stack e-portal to be launched to promote Digital infra.
•  New provision to file updated return within 2 years of relevant assessment year.
•  Alternate minimum tax for cooperative societies down from 18.5% to 15%.
•  Tax deduction limit for state govt employees to NPS raised from 10% to 14%.
•  Surcharge on Corporate tax pruned from 12% to 7%. Surcharge on transfer of long-term capital gains tax capped at 15%.
•  Tax exemption to start-ups extended to March 2023.
•  Gross GST collection for January 2022 at a record Rs 1.41 trillion.
•  No change in income tax slab.
•  Electric Vehicles battery-swapping policy to be brought out with interoperability standards.
• Concessional duty on import of capital goods to be phased out.
•  Duty on unpolished diamonds to be reduced to 5%
• Customs duty on steel scrap extended by a year.
• RBI led digital rupee using blockchain to be launched in FY23, 1% TDS on transfer of virtual digital assets & crypto income to be taxed at 30%.
•  68% of capital outlay for Domestic defence industry.
• Revised Fiscal Deficit 6.9% of GDP in FY22 as against 6.8% in Budget estimates, Fiscal deficit at 6.4% in FY23.
•  Total expenditure in FY23 estimated at Rs 39.45 trillion; total resources mobilisation to be Rs 22.84 trillion other than borrowing.