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02
Feb-2022
India's Union Budget 2022-2023: Key Highlights You Need to Know
Union Budget 2022-2023 Creates India's Roadmap For The Next 25 Years.
Finance Minister Nirmala Sitharaman said in the Lok Sabha on February 1st, 2022, that the Union Budget 2022-23 will establish the groundwork for India's economic growth and progress for the next 25 years. She further added that India's economic growth is predicted to be the greatest among all large economies, at 9.2 percent. In 14 industries, 60 lakh new jobs will be created under the productivity-linked incentive scheme. In addition, PLI Schemes can generate an additional Rs 30 lakh crore in revenue. The budget encourages growth and four goals as it enters Amrit Kaal, the 25-year countdown to India @100. Inclusive Development Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition, and Climate Action are topics covered by PM Gati Shakti.
Highlights on Different Sectors:
- Finance Minister announces Kisan drones and digitalization of land records to strengthen the farm sector. Kisan drones will be pushed for crop evaluation, land record digitization, and insecticide and nutrient spraying. This is likely to spark a technological revolution in the agricultural sector. States will also be encouraged to alter agricultural university curricula to fit the needs of natural, zero-budget, and organic farming, as well as modern-day agriculture.
- As part of the Production Linked Incentive Scheme, a scheme for design-led manufacturing will be established to create a robust ecosystem for 5G.
- Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its Ecosystem, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems will all receive government funding for R&D.
- A total of Rs. 19,500 crore has been allocated for the Production Linked Incentive to develop high-efficiency solar modules to achieve the target of 280 GW of installed solar power by 2030.
- Four pilot projects will be established for coal gasification and conversion into chemicals for the industry.
- Data centers and energy storage systems will be designated as infrastructure, and last year, Venture Capital and Private Equity invested over Rs. 5.5 lakh crore, enabling one of the most significant start-ups and growth ecosystems in the world. Measures to be made to make this investment scale up.
- The Reserve Bank of India will introduce the Digital Rupee in 2022-23.
- India has finally implemented a crypto tax system! The government took a conservative stance on taxation in Budget 2022-22, setting a fixed 30% tax rate on digital virtual assets or crypto revenue. Finance Minister Nirmala Sitharaman announced in her Budget Speech 2022 that income from the transfer of virtual digital assets would be subject to a 30% tax. She further stated that no set-off would be allowed in the event of losses. Furthermore, gifts of virtual digital assets would be taxed in the recipient's hands.
- Custom duty rates will be calibrated to support local manufacturing of wearable gadgets, hearable devices, and electronic smart meters to create a graded rate structure. In addition, duty exemptions for portions of transformers in mobile phone chargers, camera lenses in mobile camera modules, and a few other items encourage domestic production of high-growth electronic products.
- Duty on certain key chemicals, such as methanol, acetic acid, and heavy feedstocks for petroleum refining, is being decreased; duty on sodium cyanide, for which ample domestic capacity exists, is being raised - this will help boost domestic value addition.
- Last year's customs duty exemption for steel scrap was extended for another year to help MSME secondary steel makers. In addition, specific anti-dumping and countervailing duties on stainless steel and coated steel flat items, alloy steel bars, and high-speed steel are being canceled to address the current high metal prices in the public interest.
- Exemptions are offered on embellishment, trimming, fasteners, buttons, zipper, lining material, selected leather, furniture fittings, and packaging boxes to encourage exports.
- E-Passports with embedded chips and cutting-edge technologies will be issued.
- India has finally implemented a crypto tax system! The government took a conservative stance on taxation in Budget 2022-22, setting a fixed 30% tax rate on digital virtual assets or crypto revenue. Finance Minister Nirmala Sitharaman announced in her Budget Speech 2022 that income from the transfer of virtual digital assets would be subject to a 30% tax. She further stated that no set-off would be allowed in the event of losses. Furthermore, gifts of virtual digital assets would be taxed in the recipient's hands.
- On September 27, Prime Minister Narendra Modi launched the Ayushman Bharat Digital Mission, which the finance minister stated would be implemented this year. Moreover, FM added that the open platform for the national digital health ecosystem would be launched. It comprises digital registries of health facilities and providers, unique health identities, and universal access to health facilities.
- In her budget speech, Finance Minister Nirmala Sitharaman stated that the government would release a strategy on battery swapping this year to provide standardization and interoperability to electric vehicle uptake. The term 'interoperability' refers to the ability of a company's batteries to function with its vehicles and those of other EV manufacturers.
- In her Budget speech, Finance Minister Nirmala Sitharaman said that the SEZ Act will be replaced by the new law that will allow states to collaborate in the "creation of enterprise and service centers." This will apply to all significant current and new industrial enclaves to maximize available infrastructure and improve export competitiveness.
- By 2023, 80 lakh new dwellings are planned to be built. She went on to say that the Prime Minister's Housing Scheme had given Rs 48,000 crore to housing developments. The Centre is also looking ahead to developing rural places, with Sitharaman declaring that the Vibrant Settlements Programme will cover border villages with low populations and poor infrastructure. In addition, housing tourist centers, DTH (Direct To Home), and other amenities would be supplied under the project.
- Through scheduled commercial banks, the Centre proposes establishing 75 digital banking units (DBUs) in 75 districts across India. Digital banking, digital payments, and fintech have all risen significantly in India in recent years, according to Sitharaman. She stated that the government had encouraged them to guarantee that the advantages of digital banking reach every corner of the country in a consumer-friendly manner. The finance minister also stated that all 1.5 lakh post offices would be connected to the primary banking system by 2022-23, allowing for financial inclusion and account access via net banking, mobile banking, and ATMs. It would also enable online money transfers between the post office and bank accounts.
- Finance Minister Nirmala Sitharaman suggested Rs 19,500 crore for domestic solar equipment production under the PLI scheme.
WRITTEN BY: Market Data Forecast
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