Union Budget 2022-23: Focus on economic growth

Eastern Mirror Desk
Dimapur, Feb. 1 (EMN): Finance Minister Nirmala Sitharaman tabled the Union Budget for 2022-2023 in the Parliament on Tuesday, with primary focus on economic growth, generating jobs, boosting infrastructure and supporting small enterprises, among others.

“India’s economic growth in the current year is estimated to be 9.2 per cent, highest among all large economies. The overall, sharp rebound and recovery of the economy from the adverse effects of the pandemic is reflective of our country’s strong resilience,” stated Sitharaman while presenting the Union Budget.

The Finance Minister announced an outlay for capital expenditure at INR 7.50 lakh crore for FY2022-23 against INR 5.54 lakh crore in the current year, which is a massive 35.4% rise. ‘Effective Capital Expenditure’ of Central government estimated at INR 10.68 lakh crore in 2022-23, which is about 4.1% of GDP, it was informed.

She said during the presentation of the Union Budget that 60 lakh new jobs would be created under the productivity linked incentive (PLI) scheme in 14 sectors and the schemes have the potential to create an additional production of INR 30 lakh crore.

The Centre government proposed to expand National Highways network by 25000 km in 2022-23 and INR 20000 crore would be mobilised for it.
In Railways, it proposed to bring 2000 km of railway network under Kavach, the indigenous world class technology and capacity augmentation in 2022-23; 400 new generation Vande Bharat Trains to be manufactured during the next three years; and 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.

For agriculture sector, INR 2.37 lakh crore has been allocated for direct payment to 1.63 crore farmers for procurement of wheat and paddy, chemical-free natural farming to be promoted throughout the county and drones to be introduced to for crop assessment, digitisation of land records, spraying of insecticides and nutrients.

Sitharaman also announced an outlay of INR 1400 crore for implementation of the Ken–Betwa link project (river interlinking project), which is projected to irrigation to 9.08 lakh hectares of farm lands.

To help Micro, Small and Medium Enterprises (MSMEs) cope with the losses due to the pandemic, the Centre announced the extension of Emergency Credit Linked Guarantee Scheme (ECLGS) up to March 2023 and its guarantee cover will be expanded by INR 50000 crore to total cover of INR 5 lakh crore.

It added that 130 lakh MSMEs were provided additional credit under the scheme; INR 2 lakh crore additional credit for micro and small enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises; and INR 6000 crore to be rolled out for Raising and Accelerating MSME performance (RAMP) programme.

The finance minister stated that in education sector, one class-one TV channel programme will be expanded to 200 TV channels; virtual labs and skilling e-labs to be set up to promote critical thinking skills and simulated learning environment; high-quality e-content to be developed for delivery through digital teachers; and Digital University to be established.

For the Health sector, the finance minister stated that an open platform for National Digital Health Ecosystem would be rolled out and ‘National Tele Mental Health Programme’ for quality mental health counselling and care services to be launched. A network of 23 tele-mental health centres of excellence will also be set up.

The budget allocated INR 60,000 crore under Har Ghar, Nal se Jal to cover 3.8 crore households in 2022-23 and INR 48,000 crore more allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana.

The Finance ministry announced that 100% of 1.5 lakh post offices will come on the core banking system and scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.

For defence sector, 68% of capital procurement budget has been earmarked for domestic industry in 2022-23, up from 58% in 2021-22. Defence R&D will also be opened up for industry, startups and academia with 25% of defence R&D budget earmarked.

For energy transition and climate action, an additional INR 19,500 crore has been allocated for production linked incentive for manufacture of high efficiency solar modules to meet the goal of 280 GW of installed solar power by 2030.

It was announced that the Reserve Bank of India would introduce during 2022-23.

Providing greater fiscal space to states

The Centre enhanced outlay for ‘Scheme for Financial Assistance to States for Capital Investment’from INR 10,000 crore in Budget Estimates to INR 15,000 crore in Revised Estimates for current year.

Allocation of  INR 1 lakh crore in 2022-23 to assist the states in catalysing overall investments in the economy: fifty-year interest free loans, over and above normal borrowings, the ministry said, adding that states will be allowed a fiscal deficit of 4% of GSDP in 2022-23, of which 0.5% will be tied to power sector reforms.

Income tax

The Union Budget has kept the income tax slabs unchanged; however, it has allowed tax payers to file their returns within two years from the end of the relevant assessment year.

To provide a level playing field between cooperative societies and companies, the finance minister proposed to reduce surcharge on cooperative societies from 12 per cent to 7 per cent for those having total income of more than INR 1 crore and up to INR 10 crore. Tax deduction limit has also been increased from 10 per cent to 14 per cent on employer’s contribution to the NPS account of state government employees.

Payment of annuity and lump sum amount from insurance scheme will be allowed to differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardian attaining the age of 60 years.

Allocation for MGNREGA

The Centre has allocated INR 73,000 crore for the rural jobs guarantee programme — Mahatma Gandhi National Rural Employment guarantee Act (MGNREGA) – in the Union Budget. However, it is lower than last year’s INR 98,000 crore, which was later revised from the initial allocation of INR 73,000 crore.