Budget 2022 Key Announcements: FM Nirmala Sitharaman presented Union Budget 2022 in Parliament. While keeping the Income Tax Slabs unchanged, FM announced a major change in taxation as far as virtual digital assets are concerned. Union Finance Minister Nirmala Sitharaman proposed a 30 per cent tax on income from transactions in such assets. Furthermore, FM Also proposed Gati Shakti Programme which will boost infrastructure and create more jobs. On education sector, FM has announced launch of a new Digital University as well as expansion of PM eVIDYA with addition of new TV channels for supplementary education.

Here’s everything that you need to know about FM’s Budget Speech, especially for upcoming Government Job Exams and Current Affairs Perspective.

Budget of Amrit Kal

FM Nirmala Sitharaman in term Budget Speech, termed Union Budget 2022 as the foundation for Amirt Kal of Next 25 Years. She said “The Union Budget seeks to lay foundation and give blueprint of the economy over ‘Amrit Kal’ of next 25 years – from India@75 to India@100.”

Budget 2022 - 4 Priorities of Govt

At the onset of her Budget Presentation, FM outlined the 4 Key Priorities that the Government was trying to address through Budget 2022. These are:

• PM Gati Shakti
• Inclusive Development
• Optimize Productivity
• Financial Investment

Economy Related Announcements

On Economy front, FM Nirmala Sitharaman’s Budget speech covered some very important point. Building on her observations in the Economic Survey 2022 tabled yesterday, she reiterated that India’s growth is highest among all major economies that puts it in a strong position to withstand challenges. She said that Budget 2022 focuses on complimenting macro-economic growth along with micro-all-inclusive-welfare. She also said that digital economy and fintech, tech-enabled development, energy transition and climate action, will remain the key drivers in FY23.

• CAPEX Expansion: To help Indian Economy continue on its current growth path, FM expanded the CAPEX target by 35.4% i.e., from Rs 5.54 Lakh Crore to Rs 7.50 Lakh Crore. This takes the effective CAPEX for FY23 to Rs 10.7 Lakh Crore.
• ECLGS Extended, Coverage Expanded: Emergency Credit Line Guarantee Scheme (ECLGS) to be extended till March 2023 and guarantee cover will be raised by Rs 50,000 cr to Rs 5 lakh cr. This scheme provided collateral free loans to stressed MSMEs.
• PLI Schemes: She also mentioned that Productivity-linked incentive schemes in 14 sectors have received excellent response; received investment intentions worth Rs 30 lakh crore
• Public Investment and Capital Spending: One economic front she mentioned that post-pandemmic Economic recovery will be spearheaded through two-pronged approach i.e., public investment and capital spending. This Budget will provide impetus to growth through these two factors.

Also Read: Capex Budget 2022: Capital Expenditure Hike by 30%, Check Key Highlights Here

Taxation: Income Tax, Crypto Tax, Customs Duty

Towards the Business end of her Budget Speech, FM Nirmala Sitharaman touched upon some key aspects of Direct Taxation.

• No Change in IT Slabs: The Income Tax Slabs for FY23 remain unchanged and no announcement in this regards has been made by FM.
• Digital Assets Transfer: Digital Assets Sale to be taxed at 30% and 1% TDS is to be collected on transfer of these assets. Furthermore, no deduction will be allowed to set off loss while computing of income except cost of acquisition.
• Update IT Return: New provision has been introduced to allow citizens to file an updated return within 2 years from the end of the relevant assessment year
• Alternate Minimum Tax for cooperative societies to be cut to 15%
• Surcharge on Co-operative Societies reduced to 7% for income between Rs 1 Crore and 10 Crore.
• Tax deduction limit for Govt Employees increased to 14% on employers contribution to NPS account of state govt employees

Also Read: Income Tax Budget 2022: No change in Income Tax slabs, 30 percent tax on virtual asset transfer

Jobs and Employment

Addressing the Job Crisis that India faces, FM made some critical announcements in Job Creations space. She mentioned that the extension in ECLGS Scheme until March 2023 is expected to boost employment and job creation. Other key announcements include:

• Govt plans to create 60 Lakh New Jobs in next 5 Years
• Digital Ecosystem for Skilling of Employable Youth to be launched
• Online Training Platforms for Reskilling, Upskilling of Citizens to be launched
• Govt also to promote API based skill credentials, payment layers to find relevant jobs and opportunities

Infrastructure Boost: PM Gati Shakti

As identified at the start of her speech, FM announced several measures to boost infrastructure under PM Gati Shakti Programme. She added that PM Gati Shakti will pull forward the economy and will lead to more jobs and opportunities for the youth. The key highlights of the same are as follows:

• National highway network to be expanded by 25,000 kms during FY 22-23
• Desh stack e-portal to be launched to promote digital infra
• 2,000 kms of Roads to be brought under Kavach by FY 22-23
• Four multi-modal national parks contracts will be awarded in FY23
• One product one railway station will be popularised
• 400 new Vande Bharat trains to be introduced
• PM Gatishakti masterplan for expressways will be formulated in next financial year
• 100 PM Gati Shakti terminals to be set up in next three years

Housing and Urban Planning

FM’s Budget Speech also focused on issues of Housing and Urban Planning in the country. To this end, FM announced allocation of Rs 48,000 Crore towards PM Awas Yojna in FY23.

• 80 Lakh Houses under PM Awas: She mentioned that in 2022-23, over 80 Lakh new houses will be completed and issued to identified beneficiaries under the PM Awas Yojna. Of these, over 60,000 houses will be identified as beneficiaries for PM Awas Yojana in rural & urban areas.
• Har Ghar Jal: FM also allocated Rs 60,000 Crore for providing access to tap water to 3.8 crore households during this FY
• Urban Planning Taskforce: Govt plans to constitute a high-level committee which will include urban planners and economists to make recommendations on urban capacity building, planning implementation, and governance
• Urban Planning Institutes: 5 existing academic institutions for urban planning to be designated as Centre for Excellence with endowment fund of Rs 250 cr
• Other Announcements:
• Govt to introduce Modern building by-laws to better manage urban infrastructure
• Govt to promote use of public transport in urban areas through specialized schemes

Budget Announcement for MSMEs & startups

Union Budget 2022 also announced some key measures for MSMEs and StartUps. The key among the was introduction of a new programme with budget allocation of Rs 6000 Crore over next 5 years.

• Interlinking of MSME portals: FM in her budget speech also announced that MSME portals such as Udyam, e-shram, NCS & Aseem will be interlinked and their scope would be widened further. These portals would now function as live organic databases for providing different services around credit facilitation, enhancing entrepreneurial opportunities
• Rural Start-ups: Govt will launch a fund with blended capital raised under co-investment model facilitated through NABARD. This fund would be used to finance startups in agriculture & rural enterprises space.
• Drone Shakti Startups: FM also announced that Startups will promoted for Drone Shakti Programme

Also Read: Crypto Budget 2022 Highlights: Digital Rupee to be Issued; Check Tax on Crypto in India

Agriculture Budget 2022: Kisan Drones

The key announcements around Agriculture sector are as follows:

• Procurement under MSP: Govt has allocated Rs 2.37 Lakh Crore for procurement of wheat and paddy under MSP operations. FM also announced that 2022-23 year has been declared as the International Year of Millets and Govt policies will also revolve round this.
• Oil Production to be Ramped Up: FM announced that a rationalised scheme to increase domestic oilseed production will be brought in to cut down imports.
• Kisan Drones: Ushering in new wave of agricultural technology, FM announced that Kisan Drones will be used for crop assessment, land records, spraying of insecticides
• River Linking Project: FM in her budget speech also said that Draft DPRs for 5 river links have been finalised. Along with this, she also mentioned that Ken Betwa River linking project worth Rs 44,605 crore announced.
• Other Announcements:
• Finance startups to be incentives to aid rural enterprises
• Natural farming will be promoted along Ganga river corridor
• A completely paperless, e-bill system will be launched by ministries for procurement
• Financial support will be provided to farmers to take up agro-forestry

Battery swapping Policy: Boost for Electric Vehicles

In a major boost for Electrical Vehicles, Finance Minister announced that new Battery swapping policy will be notified by the Central Government to allow EV charging stations for automobiles reduce their turn-around time. On similar lines, Private sector will be encouraged to create sustainable and innovative business models for battery and energy as a service, improving the efficiency in the EV ecosystem.

Education Budget 2022

Education was also one of the major sectors in focus as far as Budget 2022 is concerned. Some of the key announcements about Education Budget 2022 are as follows:

• Agri Education: State Government will be encouraged by Central agencies to revise syllabi of agricultural universities to meet needs of natural, zero-budget & organic farming, modern-day agriculture
• PM eVIDYA Expansion: ‘One class, one TV channel’ launched to assist virtual learning and Supplementary Education will be expanded from current 12 channels to over 200 new TV Channels. These new channels would focus on providing education in regional languages to students of Class 1 to 12 Students.
• New Digital University: FM Nirmala Sitharaman also announced launch of a new Digital university which provide education and skill upgradation opportunities. It will be built on hub and spoke model

Finance Related Announcement

• Financial Assistance to States: Rs 1 lakh crore financial assistance to states to be provided in 2022-23 to catalyse investments
• Digital Rupee by RBI: FM also proposed to introduce Digital Rupee by RBI using blockchain technology, starting 2022-23 under RBI regulation.
  • Measures will be taken to step up private capital in infra sector
• Post Offices to join Core Banking: FM also announced that 100% of 1.5 lakh post offices will come on the core banking system, enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts. This move is expected to benefit farmers and senior citizens in rural areas.
• New Digital Banks: FM also announced launch of 75 new digital banks in 75 districts by scheduled commercial banks to encourage digital payments.
• GIFT City Related Announcements: International arbitration centre will be set up in GIFT city to provide faster dispute resolution. FM also made provision for launch of World-class university in GIFT City free from domestic regulation.

Health Sector

In healthcare sector, the two biggest announcements covered National Digital Health Ecosystem and National Tele Mental Health Programme.

• National Digital Health Ecosystem: The key announcement for Health Care sector in Union Budget 2022 covered launch of National Digital Health Ecosystem. This ecosystem will be organized as an open platform that will include digital registries of health providers and health facilities, unique health identity and universal access to health facilities.
• National Tele Mental Health Programme: Prioritizing mental health of citizens, the government plans to launch a national-level mental health counselling programme this year.  

Telecom Sector: 5G Spectrum Auction, BharatNet Project

For Telecom Sector, the biggest announcement in FM Nirmala Sitharaman’s speech was about roll-out of 5G Spectrum. She said that Spectrum Auction for 5G technology will be conducted by end of 2022. In addition to this, to boost 5G technology, she also added that new scheme will be launched for design-led manufacturing to aid 5G ecosystem.

• 5G Ecosystem Development: To enable affordable broadband and mobile communication in rural and remote areas, government will launch PLI scheme in FY23.
• USO Fund towards R&D: FM also mentioned that 5% licence fee paid by telecom operators towards USO Fund (Universal Service Obligation) will be provided for Research and Development as well as technology upgradation
• BharatNet Project: Govt also plans to award new contacts under BharatNet Project under PPP model to lay optical fibre in villages and rural areas in FY22-23.
• Infra Status to Data Centres: Establishment and Management of Data Centre and Energy Storage Systems will be given Infrastructure Status, which will help companies get easy financing options for the same.

Women Empowerment Schemes

FM Nirmala Sitharaman also announce 3 key schemes related to Women Empowerment. In her budget speech, she said these schemes were launched to provide integrated development for women and children.

• Mission Shakti
• Mission Vatsalya
• Poshan 2.0

In related news, over 2 lakh Anganwadis to be upgraded for improving child health during their formative years.

Ease of Doing Business

Finance Minister Nirmala Sitharman’s Budget Speech outlined the top 4 Govt Priorities in FY23 and Optimization of Productivity was one of the major ones among them. To this end, she made some key announcements about Ease of Doing Business in her budget presentation:

• Easing of Compliances and Laws: To streamline business operations, over 75,000 compliances have been eliminated and 1,486 union laws repealed
• Ease of Living: The next stage in Ease of Doing Business would also cover Ease of Living that will launched soon.
• Voluntary Exits: On similar lines, voluntary exit for corporates to be cut down to 6 months from 2 years.

Defence Budget 2022

Finance Minister also elaborated on Defence Budget allocation for FY23 in her speech. The central theme of Defence Budget was to promote self-reliance in Defence Sector and in line with this, of the total allocation 68% of Capital Procurement has been earmarked for domestic industry in 2022-23 (up from the 58% last fiscal)

• Defence R&D Opened: Another key announcement from FM was about opening of Deference R&D Sector for private industry, startups and academics. Of the total, 25% of Defence R&D Budget will be allocated towards these. FM in her speech mentioned that Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.

Railways and Transport in Union Budget 2022

Railways and Transport which use to be a major part of Govt’s overall Budget, took a relative back-seat with only few announcement in this sector from FM. The key among them covers:

• National Highway Network to be expanded by 25,000 KMs
• 400 New Generation Vande Bharat Trains would be introduced with better efficiency in the next 3 years.
• 100 PM Gati Shakti Cargo Terminals to be setup in next 3 years
• Innovative Metro Construction Projects to be Commissioned

Union Budget on Climate Change & Net Zero Commitment

In her Budget 2022 presentation today, Finance Minister acknowledged climate change to be one the biggest and strongest externalities for the world. To address concerns around climate change and net-zero commitment, FM has allocated funds that will be used to reduce carbon intensity of the economy.

• Green Bonds: She also introduced Green Bonds that will be part of the Central Govt’s borrowings programme for FY 2022-23. Proceeds collected via Green Bonds will be deployed towards Public Sector Projects.
• Coal Gasification: FM also announced launch of 4 Pilot Projects for Coal Gasification to further reduce Carbon Footprint of the Economy.
• Boost for Solar: FM has set aside Rs 19,500 cr additional allocation for PLI for manufacturing high efficiency solar modules has been made

Travel Related Announcements

FM in her speech said that Government will introduce ePassports in 2022-23 for convenience in overseas travel. These passports will be equipped with advanced technology and will come embedded with chip that will ease the travel procedures.

Also Read: Budget 2022: Important Points For UPSC (IAS) Exam 2022 - Check Major Takeaways!