Union Budget 2022: Big announcements made by finance minister Nirmala Sitharaman
Union Budget 2022: The focus of finance minister Nirmala Sitharaman's speech was laying the foundation for the next 25 years. She also announced a slew of measures for various sectors in India's economy.
Finance minister Nirmala Sitharaman, who presented Union Budget 2022 in Parliament on Tuesday, said that it will lay the foundation for economic growth through public investment as Asia's third-largest economy emerges from a pandemic-induced slump.
The government has projected growth at 8% to 8.5% compared with an estimated 9.2% for the current fiscal year and a 6.6% contraction the previous year.
Taking an all-inclusive approach, Sitharaman gave details of the spending the central government plans to undertake to give a fillip to India’s economy.
Here are the big announcements made by the finance minister in her Budget speech:
Deficit/Expenditure: The Budget projected a fiscal deficit of 6.4 per cent of Gross Domestic Product (GDP) in 2022/23 and 4.5 per cent by 2025/26. It also revised the fiscal deficit for 2021/22 at 6.9 per cent of the GDP. The states will be allowed 4% fiscal deficit to GDP in FY'23, announced Sitharaman.
Taxation: Sitharaman said that import duty on certain chemicals is being reduced. She also said that Customs duty exemption on steel scrap will be extended for another year for small- and medium-sized businesses, adding that Customs duty on stainless steel, flat products, high steel bars will be revoked. Unblended fuel to get additional duty of 2 rupees per litre from October 2022, added the finance minister.
Finance: The emergency credit line guarantee scheme for small and medium sized businesses has been extended to March 2023. She also said that energy transition and climate action will be a major government priority. Sitharaman further said that public issue (IPO) of Life Insurance Corporation is expected shortly. Among other initiatives, the finance minister said that Special Economic Zones Act (SEZA) will be replaced with new legislation, bankruptcy code to be amended to speed up the resolution process, long term capital gain surcharge to be capped at 15% and the process to wind up companies to be cut short to 6 months from 2 years currently.
Digital currency: The government will launch digital rupee using blockchain technology in 2022/23, said Sitharaman. She also announced a scheme for taxation of virtual digital assets. The income from virtual digital assets to be taxed at 30 per cent. The finance minister further said that losses from sale of virtual digital assets cannot be offset against other income.
Defence: The finance minister announced an Aatmanirbhar push for the defence sector, saying tha the central government is committed to reducing defence imports. The capital procurement budget for defence has been increased by 10% - from 58% to 68%. This will reduce the country's dependence on imports of defence equipment, said Sitharaman.
Infrastructure: The government will conduct 5G auctions in 2022 and the scheme for design-led manufacturing for 5G will be part of production-linked scheme. The government also kept aside 480 billion rupees for affordable housing in 2022/23.
Transport: The announcement in this sector are: 400 energy efficient trains to be manufactured over next three years, national highways network to be expanded by 25,000km in 2022/23 and a battery swapping policy.