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    Budget 2022: From digital rupee to focus on growth, here are highlights from FM's speech

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    Budget 2022: From digital rupee to focus on growth, here are highlights from FM's speech


    The finance minister began her speech by expressing empathy for those who bore the health and economic brunt of the pandemic. She then said, "We are in the midst of the Omicron wave, the speed of our vaccination campaign has helped greatly. I am confident that with ‘Sabka Prayaas’, we'll continue with strong growth." 

    Union Finance Minister Nirmala Sitharaman, during her Budget 2022-23 speech on Tuesday stressed on laying the foundation for economic growth of the country for the next 25 years--from India at 75 to India at 100.
    The finance minister began her speech by expressing empathy for those who bore the health and economic brunt of the pandemic. She then said, "We are in the midst of the Omicron wave, the speed of our vaccination campaign has helped greatly. I am confident that with ‘Sabka Prayaas’, we'll continue with strong growth."
    Adding that India’s economic growth is estimated at 9.2 percent, highest amongst all large economies, the finance minister said complementing the macro economic growth will be the government's focus.
    Here are some highlights from the FM's budget speech:
    Expenditure and fiscal deficit
    For Financial Year 2021-22, the expenditure has been revised to Rs 37.7 lakh crore. The FY22 fiscal deficit has been pegged at 6.9 percent of the gross domestic product (GDP), and FY23's fiscal deficit has been pegged at 6.4 percent of the GDP. For FY23, capital expenditure target has been set at Rs 7.50 lakh crore, while the effective capital expenditure is being at Rs 10.7 lakh crore.
    The National Asset Restructuring Company(NACRL), or the Bad Bank, has commenced operations. Life Insurance Corporation's initial public offering (IPO) is expected shortly. The Insurance Regulatory and Development Authority of India (IRDAI) has been given the framework for issuance of surety bonds.
    Defence R&D will be opened up for industry, startups and academia with 25 percent of defence R&D budget earmarked. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organisations through SPV model. An independent nodal umbrella body will be set up for meeting wide ranging testing and certification requirements.
    Sunrise opportunities
    Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country. They provide employment opportunities for youth, and make Indian industry more efficient and competitive. For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry and public institutions, government contribution will be provided.
    Social Spending
    The FM has allocated Rs 48,000 crore under the Pradhan Mantri Was Yojana. Around 80 lakh homes will be built for identified eligible beneficiaries and a further 60,000 beneficiaries will be identified. TheFM announced the the National Mental Health Programme aimed at better mental health, a development scheme for the Northeast, as well as sparsely populated border villages. 
    Electric vehicles/green energy
    Sitharaman announced setting electric vehicle (EV) charging stations and said the private sector would be encouraged to develop sustainable business models for the battery as a service and battery swapping policy. An additional allocation of Rs 19,500 crore was made for  PLI In Solar PV module manufacturing. Sitharaman also announced Rs 1,400 Cr for 123 MW hydro and 27 MW solar projects in FY23.
    Tax Returns
    The FM has proposed to launch new updated tax returns, in which updated tax returns can be filed within two years of assessment years. The tax deduction limit for state government employees to National Pension Scheme has been raised to 14 percent from 10 percent. The Budget 2022 has reduced the minimum alternate tax (MAT) paid by co-operative societies to 15 percent from 18 percent earlier.Finance minister Nirmala Sitharaman said that the MAT paid by corporates was 15 percent, and the move would now ensure parity in MAT. Also, the surcharge on the tax rate on co-operative societies has been slashed 7 percent from 12 percent,  for income between Rs 1 crore to Rs 10 crore.
    Sitharaman on Tuesday proposed to set up a digital university to provide education that will be built on a hub and spoke model. She also said that the 'One Class- One TV Channel' scheme will be implemented to provide supplementary education to children to make up for the loss of formal education due to the COVID pandemic. While presenting the Union Budget 2022-23, Sitharaman said,"High quality e-content in all spoken languages will be developed for radio, TV and digital platforms."
    Individual taxpayers 
    Even as the salaried middle class was looking forward to some populist measures, there was no change in income tax slabs for 2022-23. The income tax rates for 2022-23 were also not revised. Income tax relief, possible standard deduction revision to account for more work for home expenses, higher limits for investments under Chapter VI-A (Section 80C, Section 80D) were being watched closely.
    The dates For claiming tax incentives for startups has been extended to March 2023. The finance minister said the government will promote startups For drone manufacturing. "Startups have emerged as drivers of growth for our economy. Over the past few years, the country has seen a manifold increase in successful start-ups. Eligible start-ups established before March 31 2022, had been provided a tax incentive for three consecutive years out of 10 years from incorporation. In view of the COVID pandemic, I propose to extend the period of incorporation of the eligible start-up by one more year," she said.
    Digital currency/assets
    The RBI will Issue Digital Rupee In FY22-23 Using blockchain technology. The transfer of any virtual digital asset will be taxed at 30%, while tax deducted at source (TDS) for transfer of virtual digital assets has been set at 1 percent. The finance minister said promoting digital economy and fintech are among the focus areas of the government.
    Capital gains
    The government proposes to cap the surcharge on the transfer of any long-term capital gains has been fixed at 15 percent.
    The finance minister announced that the gross Goods and Services Tax (GST) collection for the month of January stood at Rs 1.41 lakh crore.
    Customs and excise duties
    The government has decided to levy 7.5 percent customs Duty on select capital goods and proposes to give duty concessions for manufacturing of electronics, especially mobile phones. The duty on unpolished diamonds will be reduced to 5 percent, and concessional customs duty on steel scrap has been extended by a year. The customs duty on umbrellas has been increased to 20%, while unblended fuel to attract an additional excise duty of Rs 2 per litre.
    The finance minister said the country is in a strong position to withstand challenges due to higher vaccinations. She noted that we are in the midst of an Omicron wave with a high number of cases but milder symptoms.
    Sitharaman said the Centre is committed to strengthening the ability of the poor to tap all opportunities. She said the 'Make In India' initiative can create 60 lakh new jobs. Skilling programmes and partnership with the industry will be reoriented to promote continuous skilling avenues, sustainability, and employability. The National Skill Qualification Framework (NSQF) will be aligned with dynamic industry needs.
    The Emergency Credit Line Guarantee Scheme (ECLGS), which has provided additional credit to more than 130 lakh MSMEs, will be extended up to March 2023, and its guarantee cover will be expanded by Rs 50,000 crore to a total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.
    An open platform, for the National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.'
    Anytime, Anywhere' post office savings
    In 2022, 100 percent 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 will be helpful, especially for farmers and senior citizens in rural areas, enabling inter- operability and financial inclusion.
    Ease of doing business
    In recent years, over 25,000 compliances were reduced and 1,486 Union laws were repealed. "This is the result of our government’s strong commitment for ‘minimum government and maximum governance’, our trust in the public, and ease of doing business (EODB)," Sitharaman said. For the Amrit Kaal, the next phase of Ease of Doing Business, EODB 2.0, and Ease of Living, will be launched. "In our endeavour to improve productive efficiency of capital and human resources, we will follow the idea of ‘trust-based governance’," she said.
    The issuance of e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23 to enhance convenience for the citizens in their overseas travel.
    Urban development
    "On the one hand we need to nurture the megacities and their hinterlands to become current centres of economic growth. On the other hand, we need to facilitate tier 2 and 3 cities to take on the mantle in the future. This would require us to reimagine our cities into centres of sustainable living with opportunities for all, including women and youth. For this to happen, urban planning cannot continue with a business-as-usual approach. We plan to steer a paradigm change," Sitharaman said.
    Government procurement
    Government rules were recently  modernised. The new rules have benefitted from the inputs from various stakeholders. The modernised rules allow use of transparent quality criteria besides cost in evaluation of complex tenders. Provisions have been made for payment of 75 per cent of running bills, mandatorily within 10 days and for encouraging settlement of disputes through conciliation. As a further step to enhance transparency and to reduce delays in payments, a completely paperless, end-to-end online e-Bill System will be launched for use by all central ministries for their procurements. The system will enable the suppliers and contractors to submit online their digitally signed bills and claims and track their status from anywhere.
    Finance Minister Nirmala Sitharaman on Tuesday allocated the first-ever outlay of Rs 20,000 crore toward Gati Shakti in the Union Budget for the financial year 2022-23 for integrated planning and coordinated implementation of infrastructure connectivity projects. "PM Gati Shakti masterplan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency," she said. "PM Gati Shakti is a transformative approach, driven by roads, railways, ports, airports, mass transport, waterways and logistics infrastructure. All seven engines will pull the economy forward in unison," Sitharaman added. The project will expand the national highway network by "25,000 km in 2022-23", the finance minister further noted. She said 400 new-generation Vande Bharat trains with better efficiency will be brought in during the next three years and 100 PM Gati Shakti Cargo terminals will be developed during next three years and implementation of innovative ways for building metro systems.
    Capital expenditure
    Sitharaman announced that the outlay for capital expenditure has been stepped up sharply by 35.4 percent to Rs 7.50 lakh crore for the financial year 2023 from Rs 5.54 lakh crore in FY22. Sitharaman has allocated Rs 1 lakh crore capital expenditure assistance to states in FY23 to catalyse overall investment in the economy. This is a big jump from Rs 15,000 crore capex assistance in the previous financial year.
    5G and internet connectivity
    Contracts for laying optical fibre will be awarded under the Bharat Net project through PPP in 2022 and 2023, Sitharaman said. "Completion is expected in 2025. Measures will be taken to enable better and more efficient use of the optical fibre," she added. To enable affordable broadband and mobile service proliferation in rural and remote areas, the finance minister said that 5% of annual collections under the universal service obligation fund will be allocated.
    The finance minister said chemical-free natural farming will be promoted throughout the country and that the Centre will implement a scheme to to lower dependence on oilseed imports. She said the government will encourage domestic production of oilseeds. States will be encouraged to revive agricultural universities. The farm procurement value could be around Rs 2.37 lakh crore. Use of ‘Kisan Drones’ will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients.
    Special Economic Zones
    The FM said the government will also undertake reforms in Customs Administration of SEZs and it shall henceforth be fully IT driven and function on the Customs National Portal with a focus on higher facilitation and with only risk-based checks. This will ease doing business by SEZ units considerably. This reform shall be implemented by September 30, 2022.
    The government has allocated Rs 10,667 crore for the civil aviation ministry. While the ministry was allocated Rs 3,224 crore for 2021-22, the government incurred high expenses during the divestment of Air India and as a result, the revised expense for the civil aviation ministry during 2021-22 stood at Rs 72,652 crore. The Union Budget 2022-23 has also allocated Rs 600.7 crore for regional connectivity scheme UDAN,
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