Budget 2022- 2023

 The Union Budget is the annual budget of the Indian Republic. It is presented every
year in the month of February generally by the Union Finance Minister. On this
page, you can read all about what a budget is, and what the Union Budget 2022-
23 talks about.

Union Budget - Introduction

The Union Budget is also known as the Annual Financial Statement. Article 112 of the
Constitution of India lays down that it is a statement of the estimated expenditure and
receipts of the Government for a particular year.

 The Budget keeps the account of the finances of the government for the fiscal year
(from 1st April to 31st March).
 The Budget is presented on 1st February (until 2016, it was presented on the last
working day of February) so that it can materialise before the commencement of
the new financial year which starts on 1st April.
 In 2017, a 92-year-old tradition was broken when the railway budget was merged
with the Union Budget and presented together.
 The Budget has to be passed by the Lok Sabha before it can come into effect.
 The Union Budget is divided into Revenue Budget and Capital Budget. For more on
these terms, check Union Budget - Important Economic Terms.
 In the Union Budget, the disbursements and receipts of the government comprise
the various types of government funds in India namely, the Consolidated Fund of
India, the Contingency Fund and the Public Account.
 The Economic Survey of India is released ahead of the presentation of the Budget.

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 Important Highlights of Budget 2022
The Union Budget 2022-23 seeks to complement macro-economic level growth with a
focus on micro-economic level all-inclusive welfare. The budget aims to lay a strong
foundation to steer the Indian economy towards Amrit Kaal for the next 25 years, from
India at 75 years to India at 100.

Union Budget 2022 focusses on 4 pillars:

1. PM GatiShakti
2. Inclusive Development
3. Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition, and
Climate Action
4. Financing of Investments

Union Budget 2022-23: Top Economic Indicators

Economic Analysis
Indicators

Growth • 9.2 percent expansion in GDP in FY22

estimates • 8−8.5 percent projected GDP growth for FY23

Deficit • The revised Fiscal Deficit in the current year is estimated at 6.9 percent of
GDP.
• The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP.

Capital • The outlay for capital expenditure has been stepped up sharply by 35.4
expenditure per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in
2022-23.

Repo rate • RBI kept the repo rate unchanged at 4 percent since May 2020;
continues with an accommodative monetary policy stance.

FDI • Net FDI inflows amounted to US$ 24.7 billion for April−November 2021,
29.5
percent lower than those for April−November 2020.

Inflation • CPI averaged at 5.2 percent in April−December 2021, driven primarily by

food inflation and high fuel prices.

Merchandise • Merchandise exports expanded by 49.7 percent to US$ 301.4 billion in

exports April−December 2021, exceeding the pre-pandemic levels.

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 Significant Announcements under Different Sectors
 Infrastructure Sector
 PM Gati Shakti National Master Plan at a cost of ₹20,000 crore
 5G spectrum auctions to be conducted in 2022
 Scheme for design-led manufacturing for 5G will be part of the production-
linked scheme
 To award contracts to lay optical fibre in rural areas, completion in 2025
 To allocate additional 195 billion rupees for production-linked incentives
towards solar equipment manufacturing

 Education Sector
 Digital University will be established based on a networked hub model.
 One Class, One TV channel will be expanded from 12 to 200 TV Channels to
provide supplementary education in all regional languages.

 Health Sector
 National Digital Health Ecosystem to be rolled out.
 National Tele Mental Health program to be set up to focus on mental health.
 23 tele mental health centres of excellence.
 Integrated benefits to women and children through Mission Shakti, Mission
Vatsalya, Saksham Anganwadi and Poshan 2.0.

 Agriculture Sector
 Domestic scheme introduced to reduce dependence on oilseed imports
 NABARD to facilitate funds with blended capital to finance start-ups for
agriculture & rural enterprise.
 Chemical-free, natural farming to be promoted across the country.
 2022 to be Year of Millet - support for post-harvest value addition for millet
products
 Using Kisan drones for crop assessment and spraying of pesticides

 Defence Sector
 Budget 2022-23 would give a push to self-reliance in defence production as
part of the Atma Nirbhar Bharat initiative.
 The 68 per cent capital procurement budget in the sector was earmarked for
domestic procurement.
 encourage private industry to take up the design and development of
military platforms and equipment.

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  Finance Sector
 Long term capital gain surcharge to be capped at 15%
 Emergency credit line guarantee scheme for small and medium-sized
businesses to be extended to March 2023
 Public issue of Life Insurance Corporation expected shortly
 To amend bankruptcy code to speed up the resolution process

 Railways Sector
 As part of the PM Gatishakti Masterplan, 2,000 kilometres of railway network
will be brought under Kavach.
 Also, 400 new-generation Vande Bharat Trains with better energy efficiency
and passenger riding experience will be developed and manufactured
during the next three years.

 MSMEs Sector
 Raising and Accelerating MSME Performance (RAMP) programme will be
rolled out with a Rs 6,000 crore outlay spread over 5 years for MSMEs.
 The Emergency Credit Line Guarantee Scheme (ECLGS) that provided much
needed additional credit to over 1.3 crore MSMEs will be extended till March
2023 with its guarantee cover expanded by Rs 50,000 crore to Rs 5 lakh crore.

Union Budget 2022-23: Top Policy Highlights

Policy Analysis
Multimodal • Enhance multimodal connectivity through the expansion of
Connectivity roadways by 25,000 km
• Inclusion of 2,000 km of rail network under indigenous
technology
• Develop eight ropeway projects and 100 cargo terminals

International • International Arbitration Centre to be set up; and foreign

Arbitration Centre universities permitted to operate in GIFT City.

Amendments to the • To enhance the resolution process, including for cross-border

Insolvency and insolvency.
Bankruptcy Code • To establish a centre to reduce the process of voluntary
winding up of companies to six months

Digital Rupee • Launch of digital rupee using blockchain and other

technologies in FY22-23

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 • Scheduled Commercial Banks to set up 75 digital banking
units
• Extend the core banking system to post offices

Tax on Virtual • All virtual digital assets will be taxed at 30 per cent rate, while
Digital digital gifting will also be charged per the same rates on the
Assets receiver’s end.

Committee to • A committee or task force to be set up for urban planning,

govern augmenting the Animation, Visual Effects, Gaming, and Comic
different processes sector, and reviewing the regulatory framework governing
venture capital and private equity investments

5G spectrum • 5G spectrum auction proposed in FY22 along with the launch

of a design-led manufacturing scheme (as part of the PLI
scheme);
• Contracts to be awarded for laying optical fibre in remote
areas through Public-Private Partnership

Data centres • Infrastructure status accorded to data centres and energy

storage systems to facilitate credit availability

Green Bonds • Issuance of sovereign green bonds which will help reduce
carbon intensity
• Set-up of government-backed funds for climate action, tech-
based and agricultural initiatives

Battery swapping • Battery swapping policy and interoperability standards to be

policy formulated
• Additional INR 195 billion to be allocated to PLI for
manufacturing Solar PV modules

Emergency Credit • The Emergency Credit Line Guarantee Scheme for MSMEs
Line Guarantee extended up to March 2023 with an additional guarantee cover
Scheme for MSMEs of INR 500 billion for hospitality and related enterprises

Special Economic • Special Economic Zone Act to be replaced with new

Zone Act legislation to enable the States’ partnership in the development
of enterprise and service hubs, optimally utilise the available
infrastructure, and enhance export competitiveness

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PLI scheme • Production Linked Incentive (PLI) Scheme of the Centre has
the potential to create 60 lakh new jobs during the next five
years.
• A scheme for design-led manufacturing will be launched to
build a strong ecosystem for 5G as part of the PLI scheme.
• For facilitating domestic manufacturing, an additional
allocation of Rs 19,500 crore for PLI scheme for manufacturing of
high efficiency (solar) modules.

Empowerment of • Schemes such as Mission Shakti, Mission Vatsalya, Saksham

women Anganwadi and Poshan 2.0.
• Allocation of Rs 60,000 crore will be made under ‘Har Ghar Nal
Se Jal’ scheme to cover 3.8 crore households in 2022-23.

PM GatiShakti • PM GatiShakti National Master Plan will encompass the seven

engines for economic transformation, seamless multimodal
connectivity and logistics efficiency.
 The seven engines include roads, railways, airports, ports,
mass transport, waterways, and logistics infrastructure.
• To facilitate better movement of people and goods, The
National Highways Network will be expanded by 25,000 km in
FY23

• 400 new gen Vande Bharat trains to be manufactured in the

next 3 years
• Railways will develop new products and logistic services for
small farmers and MSMEs
• ‘One Station- One Product’ concept will be promoted to help
local businesses and supply chains built on a hub and spoke
model
• 2,000 km of network to be brought under a new scheme,
Kavach – for safety and capacity augmentation

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 Union Budget 2022-23: Top Tax Highlights
Factor Analysis

Income tax • No change to corporate or personal income tax rates

Revised Income • Taxpayers now have a two-year window to correct errors and file
Tax a revised income tax return for the relevant assessment year.
return policy

Tax holiday • Tax holiday extended for start-ups incorporated up to 31 March

2023 and for new manufacturing companies commencing
operations by 31 March 2024

surcharge or • Retrospective amendment to deny the deduction of any

cess surcharge or cess paid on income and profits

Virtual digital • Gains taxed at 30 percent; deduction allowed only for the cost of
assets acquisition;
(VDA): • Benefit of set-off and carry forward of losses not available;
• Deemed gift tax provisions to apply; tax deduction at source
(TDS) at 1 percent introduced.

International • Income-tax exemption expanded to, inter alia, specified income

Financial of non-resident from lease of a ship to IFSC units;
Services Centre • Income of a non-resident from the transfer of specified derivative
(IFSC)
instruments

Concessional • Concessional tax regime on foreign-sourced dividends to be

tax regime withdrawn from FY22

Alternate • Cooperative societies pay 18.5% alternate minimum tax and

minimum tax companies pay 15%. From now on the cooperatives too will have
to pay only 15%

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 Some Questions
Q.1 What is the expenditure announced for the Union Budget 2022-23?
Ans. The total spending announced for Union Budget 2022-23 is Rs.39.45 lakh crore.
Q.2 What constitutes a Union Budget?
Ans. A union budget consists of Revenue budget and Capital Budget. The Revenue
budget accounts the government’s revenue receipts and expenditure while the Capital
budget accounts for the receipts and payments made by the government for the
mentioned fiscal year.
Q.3 Who presents the Union Budget?
Ans. The Union Budget is presented by the Union FInancial Minister. It is presented through
FInancial Bill and Appointment Bill only when it is passed in the Lok Sabha. For the financial
year 2022-23, the Indian Union Budget was presented by FInancial Minister Nirmala
Sitharaman.
Q.4 What is the need for the Union Budget?
Ans. The Union Budget ensures that the available resources are utilized efficiently for
public welfare. The allotment of financial resources in different areas like education,
defence, health, etc is accounted for in the Budget.
Q.5 What are the major areas covered in the Budget 2022-23?
Ans. The Finance Minister made important announcements like launch of Digital Rupee,
400 new generation Vande Bharat trains, Digital University, Mental Health Tele Programme
and more.

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