Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman announced the official budget for 2022 on 1st February. The finance minister stated that this budget seeks to lay the foundation and steer the economy in the next 25 years. India’s growth is estimated to be at 9.27 per cent.
Some major decisions have been made for healthcare, infrastructure development, tech-enabled development, productivity enhancements, sunrise opportunities, and several decisions under the PM Gati Shakti scheme. Announcements have also been made regarding the digital economy, bitcoin, and climate actions.
Highlights of Annual Budget 2022
The major focus areas of Budget 2022:
- PM Gati Shakti
- Inclusive Development
- Productivity Enhancement
- Sunrise Opportunities
- Energy Transition
- Climate Action
- Financing of investments
PM Gati Shakti
PM Gati Shakti has stated multiple changes, growth opportunities, and decisions. As per the PM Gati Shakti plan, the National Highway network will be expanded by 25,000 km in 2022-23, the master plan for expressways will be formulated in the next financial year, 4 multi-modal national parks contracts will be awarded in FY23. This will lead to more jobs and opportunities for the youth and encourage in pulling the economy forward.
To boost Indian Railways, 400 new-generation Vande Bharat Trains proposed to be developed and manufactured in the next 3 years. Also, India plans to build 100 new cargo terminals in the coming 3 years.
PM Gan Shakti will majorly focus on 7 engines: Roads, Railways, Airports, Ports, Mass transport, Waterways, Logistics infrastructure.
Measures for Indian farmers
- Measures will be taken to promote natural and chemical farming in India
- For a good crop assessment, digitization of land records, spraying of insect pesticides, use of Kisan Drones will be promoted
- MSP direct payments worth Rs. 2.37 lakhs to be provided for wheat and paddy farmers
Measures for Small and Medium Businesses
- A fund with blended capital raised under the co-investment model which is facilitated through NABARD to finance startups in agriculture and rural enterprises for farm produce value chain.
- MSMEs like Udyam, e-shram, NCS and Aseem portals will be interlinked in order to widen their scope.
Amendments made for the Bankruptcy Code
- IBC amendments to enhance the efficiency of the resolution process for companies
- Measures will be taken to facilitate cross-border insolvency resolution
- Measures will be taken to speed up the voluntary winding up of companies
Cryptocurrency and Digital Economy
Indian digital rupee will be introduced using blockchain and other technologies. It will be issued by RBI starting 2022-23 to give a big boost to the economy as stated by the FM.
Another important announcement states that, ‘Income from Transfer of Virtual Digital Assets to be taxed at 30%. No deduction in respect of any expenditure or allowance will be allowed while computing such income, except the cost of acquisition’.
The interpretation of the same can be 30% flat tax on cryptocurrency/digital assets.
Filing Taxes
- To offer some relief to taxpayers, the government has given an opportunity to correct errors made (if any) while filing taxes within 2 years from the relevant assessment year.
- No change in the personal income tax slabs
Education
- One class, one TV channel program: This program of PM eVIDYA will be expanded from 12 to 200 TV Channels. This will encourage and enable states to provide supplementary education in regional languages for children of Classes 1 to 12.
Electrical Vehicles
- In order to offer a push for electric vehicles, a battery-swapping policy will be brought out with interoperability standards to boost the e-vehicle ecosystem.
LIVE Budget 2022 Update by Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman:
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Budget 2022 Expectations
There are some other areas where big changes are foreseen in the budget 2022 announcements. Let’s look at the budget 2022 expectations:
Health Care and Health Infrastructure
Citing the present pandemic situation, the government may announce an increase in the health care expenditure fund by 10-12 %. There are also speculations about tax exemptions or deductions for essential and critical medicines and medical equipment. Also, the fund made for vaccination has a high probability to continue in this budget as well.
Education
In the budget, changes and additions can be announced regarding education and further strengthening of the country’s educational infrastructure. There is a possibility of some major announcements for kids having to take online classes and about improving their learning experience. There is an expectation of adding some significant percentage of funds to education and children welfare.
Housing Loan
The stakeholders in the real estate industry and property want the standard Rs 2 lakh tax deduction on interest paid on home loans to be increased to Rs 5 lakhs. This change will help and encourage more and more salaried employees to buy their first home. This will also help property developers recover from the losses and increase their profit margins.
Cryptocurrency Framework
In the upcoming budget, the finance ministry is expected to state a regulatory and tax framework for cryptocurrencies. Despite not being legal or under any regulation, cryptocurrency investments have grown from approximately US$ 923 million in April 2020 to a whopping US$ 6.6 billion in May 2021. Thus, there is an expectation that the government may introduce a special regulatory and taxation regime for cryptocurrencies and central bank digital currencies.
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