Highlights from Union Budget, 2022-23

Key Highlights from Union Budget 2022-23 :

  • ‘Scheme for Financial Assistance to States for Capital Investment’ is being enhanced from Rs. 10,000 crore in BE 2021-22 to Rs. 15,000 crore in RE 2021-22;
  • Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23;
  • “The Special Economic Zones Act will be replaced with a new legislation that will enable the states to become partners in Development of Enterprise and Service Hubs”
  • Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by me last year to reach a fiscal deficit level below 4.5 per cent by 2025-26.
  • Proposes to Form High Level Committee to refine Urban Development for a Paradigm Change;
  •  Trust Based Governance for Ease of Doing Business 2.0 with Advent of Amrit Kaal; Singe Window Portal Parivesh to be expanded to provide information to Applicants; New System Proposed to accelerate Corporate Voluntary Winding Up in less than 6 months;Design-LED Manufacturing to be launched to build a strong ecosystem for 5G through PLI Scheme;
  • New Scheme, Prime Minister’s Development Initiative for North East ‘PM-DevINE‘ announced; Rs. 1500 Cr. allocated.
  • Cooperatives to pay alternate minimum tax and surcharge at reduced rate of 15% and 7% respectively;
  •  Incorporation Date for Start-ups and new Manufacturing entities to be eligible for Tax incentives extended by an year;
  •  Businesses mandated to cut TDS on benefits they give to agents if Aggregate Value of such benefits exceed Rs. 20000 in a year; Surcharge on Long Term Capital Gain arising from all assets capped at 15%; Surcharge and cess on income and profits not allowed as Business Expenditure;
  •  Direct payment of Rs. 2.37 Lakh crore MSP value to 163 Lakh farmers for wheat and paddy procurement during 2021-22;
  • Scheme for Delivery of Digital and Hi-tech services to Farmers to be launched in PPP Mode;
  • Capital expenditure in the Union Budget is being stepped up sharply by 35.4% from Rs. 5.54 lakh crore in the current year to Rs. 7.50 lakh crore in 2022-23;
  • Rs. 15,000 crore outlay for the ‘Scheme for Financial Assistant to States for Capital Investment’ in Re 2021-22;
  • Allocate Rs. 1 lakh crore to assist the States in catalyzing overall investments in the economy for 2022-23;
  • No change in income tax rates and slabs for FY’23;
  • Customs Duty exemption to steel scrap extended by another year;
  • Certain anti-dumping duty and CVD on certain steel products being revoked due to high price;
  • Proposes to reduce custom duties on certain chemicals including methanol;
  • Customs duty on cut and polished diamond, gem stones reduced to 5%;
  • Concessional rate on capital good and project imports to be phased out;
  • Introduce IT driven reforms for SEZs;
  • 1 percent TDS on transfer of virtual assets above a threshold, gifts to be taxed;
  • Proposes tax deduction from 10% to 14% on contribution in NPS by State Govts to employees;
  • Extend period of incorporation by 1 year upto March 31, 2023 for startups to avail tax incentives;
  • Rs. 60000 crore allocated to provide tap water connections to 3.8 crore households in 2022-23;
  • International Arbitration Centre will be set up in Gujarat International Finance Tec city to provide faster dispute resolution;
  • Rs. 19,500 cr additional allocation for PLI for manufacturing high efficiency solar modules has been made;
  • 400 new generation Vande Bharat train to be manufactured in next 3 years;
  • 2000 km of rail network to be brought under indigenous technology KAWACH for safety and capacity augmentation;
  • 5 existing academic institutions for urban planning to be designated as Centre for Excellence with endowment fund of Rs. 250 cr;
  • E-passport with embedded chip will be rolled out;
  • All post offices to be linked with Core Banking Solution to push financial inclusion;
  • Projects in National Infrastructure Pipeline which pertain to 7 engines will be aligned with PM Gati Shakti Framework;
  • 75 Digital Banks in 75 districts will be set up by scheduled commercial banks to encourage digital payments;
  • 1-Class-1-TV Channel to be implemented to provide supplementary education to children to make up for loss of formal education due to COVID;
  • Rs . 6000 crore programme to rate MSMEs to be rolled out over 5 years;
  • Implementation of Ken-Betwa rivers linking with estimated cost of Rs. 44,605 cr to be taken up;
  • Desh stack e-portal to be launched to promote digital infra;
  • 100 PM Gati Shakti terminals to be set up in next three years;

 

Road Transport

  • National Highways Network to be expanded by 25000 Km in 2022-23.
  • Rs 20000 Crore to be mobilized for National Highways Network expansion.

Railways

  • One Station One Product concept to help local businesses & supply chains.
  • 2000 Km of railway network to be brought 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.
  • 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.

Agriculture

  • Rs. 2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat and paddy.
  • Chemical free Natural farming to be promoted throughout the county. Initial focus is on farmer’s lands in 5 Km wide corridors along river Ganga.
  • NABARD to facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
  • ‘Kisan Drones’ for crop assessment, digitization of land records, spraying of insecticides and nutrients.

 

Ken Betwa project

  • 1400 crore outlay for implementation of the Ken – Betwa link project.
  • 9.08 lakh hectares of farmers’ lands to receive irrigation benefits by Ken-Betwa link project.

 

MSME

  • Udyam, e-shram, NCS and ASEEM portals to be interlinked.
  • 130 lakh MSMEs provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS)
  • ECLGS to be extended up to March 2023.
  • Guarantee cover under ECLGS to be expanded by Rs 50000 Crore to total cover of Rs 5 Lakh Crore.
  • Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
  • Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs 6000 Crore to be rolled out.

 

Skill Development

  • Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to empower citizens to skill, reskill or upskill through on-line training.
  • Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).

 

Education

  • One class-One TV channel’ programme of PM eVIDYA to 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 will be developed for delivery through Digital Teachers.
  • Digital University for world-class quality universal education with personalised learning experience to be established.

 

Health

  • An open platform for National Digital Health Ecosystem to be rolled out.
  • 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 be set up, with NIMHANS being the nodal centre and International Institute of Information Technology-Bangalore (IIITB) providing technology support.

 

Saksham Anganwadi

  • Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
  • Two lakh anganwadis to be upgraded to Saksham Anganwadis.

 

Har Ghar, Nal Se Jal

  • Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar, Nal se Jal.

 

Housing for All

  • Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana.

 

Prime Minister’s Development Initiative for North-East Region (PM-DevINE)

  •  New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
  • An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth and women under the scheme.

 

Vibrant Villages Programme

  • Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.

 

Banking

  • 100 per cent of 1.5 lakh post offices to come on the core banking system.
  • Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.

 

Urban Planning

  • Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
  • Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.

 

Accelerated Corporate Exit

  • Centre for Processing Accelerated Corporate Exit (C-PACE) to be established for speedy winding-up of companies.

 

AVGC Promotion Task Force

  • An animation, visual effects, gaming, and comic (AVGC) promotion task force to be set-up to realize the potential of this sector.

 

Telecom Sector

  • Scheme for design-led manufacturing to be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.

 

Export Promotion

  • Special Economic Zones Act to be replaced with a new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.

 

AtmaNirbharta in Defence:

  • 68% of capital procurement budget earmarked for domestic industry in 2022-23, up from 58% in 2021-22.
  • Defence R&D to be opened up for industry, startups and academia with 25% of defence R&D budget earmarked.
  • Independent nodal umbrella body to be set up for meeting testing and certification requirements.

 

e-Passport

  • e-Passports with embedded chip and futuristic technology to be rolled out.

Energy Transition and Climate Action:

  • Additional allocation of Rs. 19,500 crore for Production Linked Incentive for manufacture of high efficiency solar modules to meet the goal of 280 GW of installed solar power by 2030.
  • Five to seven per cent biomass pellets to be co-fired in thermal power plants:
    1. CO2 savings of 38 MMT annually,
    2. Extra income to farmers and job opportunities to locals,
    3. Help avoid stubble burning in agriculture fields.
  • Four pilot projects to be set up for coal gasification and conversion of coal into chemicals for the industry
  • Financial support to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry.

 

Public Capital Investment:

  • Public investment to continue to pump-prime private investment and demand in 2022-23.Outlay for capital expenditure stepped up sharply by 35.4% to Rs. 7.50 lakh crore in 2022-23 from Rs. 5.54 lakh crore in the current year.
  • Outlay in 2022-23 to be 2.9% of GDP.
  • ‘Effective Capital Expenditure’ of Central Government estimated at Rs. 10.68 lakh crore in 2022-23, which is about 4.1% of GDP.

 

Fiscal Management

  • Budget Estimates 2021-22: Rs. 34.83 lakh crore
  • Revised Estimates 2021-22: Rs. 37.70 lakh crore
  • Total expenditure in 2022-23 estimated at Rs. 39.45 lakh crore
  • Total receipts other than borrowings in 2022-23 estimated at Rs. 22.84 lakh crore
  • Fiscal deficit in current year: 6.9% of GDP (against 6.8% in Budget Estimates)
  • Fiscal deficit in 2022-23 estimated at 6.4% of GDP.

 

DIRECT TAXES

Introducing new ‘Updated return’

  • Provision to file an Updated Return on payment of additional tax.
  • Will enable the assessee to declare income missed out earlier.
  • Can be filed within two years from the end of the relevant assessment year.

Cooperative societies

  • Alternate Minimum Tax paid by cooperatives brought down from 18.5 per cent to 15 per cent.
  • To provide a level playing field between cooperative societies and companies.
  • Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crores.

Litigation Management

  • In cases where question of law is identical to the one pending in High Court or Supreme Court with respect to tax litigation, the filing of appeal by the department shall be deferred till such question of law is decided by the court to help in reducing repeated litigation between taxpayers and the department.

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