BUDGET 2022

BUDGET 2022 QUICK SUMMARY

DEFICIT/EXPENDITURE

1. Proposes fiscal deficit of 4.5% of GDP by 2025/26

2. Projects fiscal deficit of 6.4% of GDP in 2022/23

3. Revised fiscal deficit for 2021/22 at 6.9% of GDP

4. Total expenditure in 2022/23 seen at 39.45 trillion rupees

5. States will be allowed 4% fiscal deficit to GDP in FY23

6. 50 year interest free loans over and above normal borrowing allocated to states

7. Scheme for financial assistance to states for capital investment outlay to be 1 trillion rupees in 2022/23

TAXATION

1. Import duty on certain chemicals are being reduced

2. Customs duty exemption on steel scrap to be extended for another year for small- and medium-sized businesses

3. Customs duty on stainless steel, flat products, high steel bars to be revoked

4. Unblended fuel to get additional duty of 2 rupees per litre from October 2022

FINANCE

1. Emergency credit line guarantee scheme for small and medium sized businesses to be extended to March 2023

2. Energy transition and climate action will be a major government priority

3. Public issue of Life Insurance Corporation expected shortly

4. Initiatives from last year's budget have been provided adequate allocations in this budget

5. Special Economic Zones Act to be replaced with new legislation

6. To amend bankruptcy code to speed up resolution process

7. Aims to lower winding up of companies to 6 months from 2 years currently8. 

8. Long term capital gain surcharge to be capped at 15%

DIGITAL CURRENCY

1. To launch digital rupee using blockchain technology starting 2022/23

2. To launch scheme for taxation of virtual digital assets

3. Losses from sale of virtual digital assets cannot be offset against other income

4. Income from virtual digital assets to be taxed at 30%

DEFENCE

1. Govt committed to reducing defence imports

INFRASTRUCTURE

1. 5G spectrum auctions to be conducted in 2022

2. Scheme for design-led manufacturing for 5G will be part of production-linked scheme

3. To award contracts to lay optical fibre in rural areas, completion in 2025

4. 480 billion rupees set aside for affordable housing in 2022/23

5. To allocate additional 195 billion rupees for production-linked incentives towards solar equipment manufacturing

AGRICULTURE

1. Domestic scheme introduced to reduce dependence on oilseed imports

2. Fund with blended capital raised under co-investment model to finance agriculture startups

3. Railways to develop infrastructure for small farmers in 2022/23

TRANSPORT

1. 400 energy efficient trains to be manufactured over next three years

2. National highways network to be expanded by 25,000km in 2022/23

3. Highways expansion to cost 200 billion rupees in 2022/23

4. India to bring out battery swapping policy

Economic Survey released before Budget : Points

Indian economy is expected to witness real GDP expansion of 9.2% in 2021-22. Agriculture and allied sectors have been the least impacted by the pandemic and the sector is expected to grow by 3.9% GVA of Industry (including mining and construction) will rise by 11.8%.

Indian economy is in a good position to witness GDP growth of 8.0-8.5% in 2022-23. Foreign exchange reserves at US$ 634 bn on 31st Dec 2021. This is equivalent to 13.2 months of merchandise imports & is higher than the country’s external debt India’s CPI inflation at 5.6%

Economic output surpasses pre-covid levels. Agricultural sector was the least impacted by the pandemic-related disruptions. Revival in the Indian residential real market in 2021 in terms of growth in sales, prices and new launches.

Hotel occupancy rate has recovered substantially, reaching 56-58% in October 2021, from 30-32% in April 2021. Boom in software & IT-enabled services exports even as earnings from tourism have declined sharply. Government consumption is estimated to grow by a strong 7.6%.

Investment to GDP ratio to 29.6% in 2021-22, the highest in seven years. Private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment. Investor sentiment in manufacturing at all time high.

India’s total exports are expected to grow by 16.5% in 2021-22 surpassing pre-pandemic levels. Imports are expected to grow by 29.4%

Out of an ambitious export target of US$ 400 billion set for 2021-22, India has already attained more than 75 per cent of it by exporting goods worth US$ 301.4 billion. 40 per cent of India’s exports is still accounted to only seven countries.

The gross monthly GST collections have crossed ` 1 lakh crore consistently since July 2021. The fiscal deficit for April-November 2021 has been contained at 46.2% of Budget Estimates (BE) 89,066 crore was raised via 75 IPO issues in April- November 2021.

Indirect tax receipts have registered a YoY growth of 38.6% in the first eight months. Gross GST collections, Centre and States taken together, were `10.74 lakh crore during Apr to Dec 2021

Disinvestment target was 1.75 lac crs. Govt was able to mobilise only Rs 9330 crs so far. Total expenditure of the Government increased by 8.8% during April to Nov 2021 and stood at 59.6% of Budget Estimate. Expenditure on major subsidies stood at 2.31 lakh crore.

India’s ranking in Global Innovation Index has climbed 35 ranks, from 81st in 2015-16 to 46th in 2021. Gross enrolment ratio in higher education recorded at 27.1 percent in 2019-20, was slightly higher from 26.3 percent in 2018-19.

It is estimated that over the period of five years, the PLI Scheme for Textiles will lead to fresh investment of Rs.19,000 crs, cumulative turnover of over Rs.3 lakh crs, create additional employment opportunities of more than 7.5 lakh jobs in this sector.

Despite the push for renewables, as per the Draft National Energy Policy of Niti Aayog, the demand for coal is expected to remain in the range of 1.3-1.5 Billion Tonnes by 2030. 28 coal mines have been successfully auctioned. Auction process for 88 coal mines is underway.

One Nation One Ration Card progress - the facility of national/inter-State portability is enabled in 34 States covering nearly 75 cr beneficiaries (94.3 % of total target) The Government set 20% ethanol blending target for mixing ethanol with petrol to be achieved by 2025.

In December alone 4.6 billion transactions worth `8.26 lakh crore were carried out by UPI. Total assets of NBFCs increased from `36.37 lakh crore in September 2020 to `42.05 lakh crore in September 2021, resulting in YoY growth of 15.61%

Source : https;//twitter,com/lalitinvestor