Budget-22 For A Multi-Modal Connectivity Infrastructure
Although Corona has shaken the whole world for two consecutive years, yet an attempt has been made to give a new direction to India's economic progress through Budget 2022. In the budget, emphasis has been laid on 'multi-modal connectivity infrastructure' from basic infrastructure. The budget balances both short term and long-term needs of the country. The focus will be on fund raising, financial inclusion, modernization of education infrastructure and curriculum, special incentives for startups and entrepreneurship are the major highlights of this budget.
The government has presented the budget as a roadmap for the next 25 years of the Indian economy. The government has reduced the disinvestment target for FY22 from Rs 1.75 lakh crore to Rs 78,000 crore. Cryptocurrencies will now be taxed. At present, there are no clear provisions relating to taxation of cryptocurrencies under the Income Tax Act, 1961, bringing digital assets into the tax regime is a welcome move by the government. The inclusion of a 30% tax on cryptocurrency would help regulate the cryptocurrency sector in India, although it would result in retail. Investor interest may decline.
Reserve Bank of India will introduce a Central Bank Digital Currency (CBDC) from this year. The central bank digital currency will give a major boost to the digital economy. A central bank digital currency would be a legal tender issued by the RBI in digital form. It can be exchanged face to face with the notes issued by the government. The emphasis on digital economy and introduction of fintech innovation will give impetus to the fintech sector. To promote digital banking, 75 digital banking units will be set up by scheduled commercial banks in 75 districts of the country on completion of 75 years of independence. Includes spectrum auction which will be conducted in 2022 by private firms to launch 5G mobile services within 2022-23.
The focus has been on expansion of optical-fibre network under "BharatNet" project to provide better communication to rural areas. The project aims to bring rural areas at par with urban areas with e-services, communication facilities and digital resources.
Now, state government employees can claim tax exemption on their contribution to the National Pension System (NPS) up to 14 per cent of their employer's basic pay and dearness allowance. Till now, it was limited to 10 per cent for state government and private sector employees. Finance Minister Nirmala Sitharaman increased this limit of tax exemption under section 80CCD (2).
400 new generation Vande Bharat trains will be manufactured during the next 3 years. Along with this, 100 PM Gati Shakti Cargo Terminals will be developed during the next 3 years. The National Highway network in the country will be expanded to 25,000 kms in 2022-2023 and the PM Gati Shakti program envisaging coordinated planning across central government ministries and states will be at the heart of infrastructure development in the country. For areas like Himachal, Uttarakhand, Jammu and Kashmir, North East, Parvatmala scheme is being started. This plan will create a modern system of transport over the mountains. It will facilitate modern system of transport and connectivity in the hills. This will strengthen the border villages and help in the security of the country.
In order to reduce dependence on imports in the Defence sector, the government will allocate 68% of the capital procurement budget, which is over 58%. Defence Research and Development (R&D) will be opened to industry, startups and academia, for which 25% of the Defence R&D budget will be earmarked. The private sector will be encouraged to design and develop military platforms and equipment in collaboration with DRDO and other organizations through public-private partnerships.
The focus has been on ensuring assured income to the farmers with the announcement of Rs 2.37 lakh crore for direct payment of Minimum Support Price (MSP) to the farmers. The government will promote chemical free natural farming across the country to promote sustainable agricultural productivity and income of the farmers.
The Union Budget has announced several measures for the Micro, Small and Medium Enterprises (MSME) sector including the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023. To help the MSME sector become more resilient, competitive and efficient, the Center will launch a program to enhance and accelerate MSME performance (RAMP) with an outlay of Rs 6,000 crore over five years. The budget has also opened doors for entrepreneurship and skills, as per budget Make in India can bring about 60 lakh new jobs.
The outlay for PM Research Fellowship has been increased from Rs 150 crore to Rs 200 crore in the Union Budget 2022. Finance Minister Nirmala Sitharaman has announced the setting up of a digital university along with other initiatives to improve digital education in the country. High quality e-content will be offered in all spoken languages in the country. In the Union Budget 2022, Rs 63,449.37 crore has been allocated to school education, which is about Rs 9,000 crore more than the current fiscal year. The country's largest school education scheme, the Samagra Shiksha Abhiyan, has been allocated Rs 37,383.36 crore. The higher education budget increased by Rs 2,477.7 crore, an increase of 6.46% over the previous year. Rs 10,233.75 crore has been allocated to the PM Poshan Yojana, which will replace the mid-day meal scheme. PM e-Vidya's 'One Class, One TV Channel' program will be expanded from 12 to 200 TV channels. This will enable all the states to provide supplementary education in regional languages from class 1 to 12.
However, in direct tax measures, the finance minister has again disappointed the middle class. Expectations of tax breaks for the salaried class and middle class have been dashed as India's salaried class and middle class were hoping for relief in times of pandemic and all-out pay cuts and back-breaking inflation. The lack of direct job assistance to the youth is also visible in this budget, but overall, this budget is going to emphasize self-reliance.
