India Budget 2022 Highlights

India's Finance Minister Ms. Nirmala Sitharaman presented the fourth Union Budget for FY23e of the Modi 2.0 government today.  Apparently one of the shortest speech of around 90 minutes in the recent past budgets. Budget is largely focused on inclusive growth towards the digital economy and infrastructure development. Middle class looks disappointed as this budget is silent on Income Tax much expected sops. However underlying idea of this budget sets the stage to drive towards 1) digital economy by introducing Digital Currency through Digital Rupee 2) Bringing Virtual digital currency under the net of taxation system 3) Rollout 5G 4) Promoting Electric Vehicle (EV) ecosystem 5) Infrastructure supported developments amongst others.

This year's Budget focuses primarily on PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action and Financing of investments.

India Budget 2022 - Key Highlights:

• Announced Digital Rupee using blockchain to be issued by RBI starting 2022-23 to boost digital economy
• 30% Tax on transfer of Virtual Digital Assets
• Strategic transfer of ownership of Air India has been completed while Public issue of much awaited LIC is expected shortly
• ePassports with embedded chip will be rolled out in 2022-23 for convenience in overseas travelers
• 5G Spectrum auction will be conducted in 2022 and rollout will be in 2022-23
• The river linking project has been given further impetus. After Ken-Betwa river project, DPR of five more river linking projects completed.
• Paid Rs2.37 Lakhs crores of MSP direct payments
• Manufacture and deploy 400 Vande Bharat Trains in the next three years
• Plans to develop 100 cargo terminals in the next three years
• PLI schemes in 14 sectors having potential to create 60 lakh jobs and new production of Rs 3 lakh crores
• Emergency Credit Line Guarantee Scheme (ECLGS) to be extended upto March 2023 which was initially announced on 13th May 2020. Guaranteed cover extended by another Rs 50,000 Crores to Rs 5 Lakh Crores
• Government's capital expenditure to be increased to 7.5 lakhs crores
• Increase capital allocation to PMAY Housing scheme to Rs 48,000 crore

Benefit on Taxation:

• Tax on Virtual Digital Transfer of Assets @ 30%; No deduction allowed while computing income except cost of acquisition and loss can't be set off from any other income. TDS of 1% on payment made for transfer, above a monetary threshold.
• Gift of cryptocurrencies to be taxed at receiver's end
• A new provision to allow taxpayers to file an updated return
• Updated return can be filed within 2 years from the end of the relevant assessment year.
• Alternate Minimum Tax for cooperative societies to be cut to 15% rom 18%; Proposal will reduce surcharge on cooperative societies to 7%, for those whose income is between Rs 1 crore and Rs 10 crore

Job Creation:

• 60 lakh jobs in the next 5 years through ECLGS
• Digital ecosystem for skilling and livelihood to be launched which will aims to skill, reskill, upskill citizens through online training.
• API based skill credentials, payment layers to find relevant jobs and opportunities

Infrastructure:

• Increase in allocation to NHAI to Rs1.99 lakh crores (v/s Rs1.31 lakh crores in 2021-22 RE)
• Expansion of 25,000 km National highway network during FY 22-23
• 100 PM Gati Shakti terminals to be set up in next three years
• 4 multi-modal national parks contracts will be awarded in FY23
• 400 New Vande Bharat Trains will be introduced in the next three years

Housing and Urban Planning:

• Allocation of Rs48,000 Crores in PMAY Housing Scheme
• Will complete 80 lakhs houses for identified beneficieries in 2022-23
• Rs 60,000 crore allocated for providing access to tap water to 3.8 crore households
• 5 existing academic institutions for urban planning to be designated as Centre for Excellence with endowment fund of Rs 250 cr
• Govt to promote use of public transport in urban areas

MSME and Startups:

• Emergency Credit Line Guarantee Scheme (ECLGS) to be extended upto March 2023 which was initially announced on 13th May 2020. Guaranteed cover extended by another Rs 50,000 Crores to Rs 5 Lakh Crores. This will benefit over 130 lakh MSME's
• Rs 6,000 crore programme to rate MSMEs to be rolled out over 5 years
• MSMEs such as Udyam, e-shram, NCS & Aseem portals will be inter-linked, their scope will be widened
• Startups will promoted for Drone Shakti
• PE/VC invested Rs 5.5 lakh crore in startup, expert committee will be set up to suggest measures to help attract investment
• Customs duty exemption given to steel scrap last year is being extended for another year to provide relief to MSME secondary steel producers.

Electric Vehicles:

• Battery swapping policy to allow EV charging stations for automobiles will be framed
• 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

Source: GoI, Budget, Media Articles etc