Dr Parveen Kumar
Going on with the tradition, the first day of the second month of this year witnessed the presentation of much awaited Union Budget. Amid threat of third wave of COVID-19 looming large over the country, Nirmala Sitharaman, Union Finance minister presented her fourth straight budget, wherein she came up with financial statements and tax proposals for fiscal year 2022-23 (April 2022 to March 2023). She read out the Budget 2022 in the Parliament through a tab, instead of the traditional ‘Bahi Khata’. No document was printed following COVID-19 protocol. Instead, the Budget copies are to be disseminated electronically with documents being uploaded on the Government website as well as being made available on a special app developed for the same. India’s growth is estimated to be at 9.2 per cent, highest among all large economies. Effective Capital Expenditure of the Central Government is estimated at Rs 10.68 lakh crore in 2022-23, about 4.1 per cent of GDP. Total expenditure is estimated at Rs 39.45 lakh crore. Receipts are estimated at Rs. 22.84 lakh cr. FY-23 fiscal deficit target at 6.4 per cent of GDP Vs 6.9 per cent. According to Finance Minister, Budget 2022 lays parallel track of futuristic and inclusive blueprint for Amrit Kaal, big public investment for modern infra readying for India at 100, will benefit youth, women, farmers, SC, ST and other excluded masses and shall be guided by PM Gati Shakti master plan. This will be achieved through a focus on Macroeconomic growth, a microeconomic welfare focus promoting digital economy, Technology enabled development, Energy Transition, Climate Action Virtual cycle starting with public investment, crowding in private investment. In backdrop of COVID-19 restrictions still prevalent, the Budget 2022-23 has come at a time when most of the sectors of the economy are hit particularly the health and education. India’s employment rate has plummeted. Historic unemployment and faltering growth not only exacerbated inequalities of income and wealth but also have led to an increase in the absolute number of poor people in India; an unprecedented and embarrassing reversal in poverty alleviation. The Economic Survey, tabled just a day before the Union Budget 2022-23, emphasized the need for the government to provide a buffer against stresses such as the uncertainty in the global environment, the cycle of liquidity withdrawal by major central banks, etc. The Survey had pegged that in the Government’s efforts to build a post-COVID economy, demand measures alone will not provide the solution. This is based mainly on the fact that a wide variety of factors such as consumer behaviour, technological developments, geo-politics, supply-chains, climate change could interact in unpredictable ways, and India will need to develop a supply-side strategy to deal with the long-term unpredictability of the post-COVID world. The major highlights of the Union Budget 2022-23 include:
PM Gati Shakti: To improve connectivity, 400 new generations ‘Vande Bharat’ trains with better efficiency are to be brought in during the next 3 years. Besides 100 PM Gati Shakti Cargo terminals will be developed during next 3 years and implementation of innovative ways for building metro systems. PM Gati Shakti Master Plan for Expressways is to be formulated in 2022-23, to facilitate faster movement of people and goods NH network to be expanded by 25,000 km in 2022-23. For this an amount of Rs 20,000 crore will be mobilized to complement public resources. PM Gati Shakti will be driven by 7 engines viz. roads, railways, airports, ports, mass transport, waterways and logistics infra. All the engines will pull forward the Economy in unison. A ‘Parvatmala’ project for conventional roads in hilly areas will be taken in PPP mode. Railways will develop efficient logistics for small farmers and enterprises with ‘One station, one product’ to help supply chain of local product.
Financial Inclusion and Ease of Doing Business 2.0: To ensure that none remains out of the formal framework of financial institutions, in the year 2022, 100 per cent of 1.5 lakh post offices will come on core banking system to facilitate financial inclusion. With the aim to take digital banking to every citizen, 75 digital banking units in 75 districts of the country will be launched. To further facilitate and promote the business and investment ecosystem in the country, the Government of India will launch ‘Ease of Doing Business 2.0’. This will be in accordance with the government’s commitment to follow the idea of trust based government.
Next-Gen Telecom services: To further speed up the communication service, India will also auction 5G airwaves this year to facilitate a roll out of the next-generation telecoms service in 2022-23. Issuance of e-passport will be rolled out in 2022-23 for the convenience of citizens in their overall travels.
Housing for Poor: The Budget has an outlay of Rs 48,000 crore allocated for completion of construction of 80 lakh houses under Pradhan Mantri Awas Yojana in rural and urban areas in the year 2022-23.
Agriculture: Regarding agriculture sector the finance minister told that procurement of wheat, paddy, Kharif and Rabi crops will benefiting over 1 crore farmers. NABARD will facilitate fund with blended capital to finance startups for agriculture and rural enterprise. An amount of Rs 2.37 lakh crore has been kept towards direct payments for minimum support price. The year 2022 to be Year of Millet, there will be a support for post-harvest value addition for millet products. Kisan drones will be used for crop assessment and spraying of pesticides. Ken-Betwa River linking project at a cost of Rs 44,000 crore will benefit 9.0 lakh hectare of farmer land. To ensure that the citizens of the country take a non toxic diet and to promote sustainability, Chemical-free natural farming will be promoted throughout the country with a focus on farmers’ land in 5 Km wide corridors along the river Ganga, in the first stage.
Education and Health: One class, one TV channel’ program of PM e- VIDYA will be expanded from 12 to 200 TV channels. This will enable all states to provide supplementary education in regional languages for classes 1 to 12. COVID-19 has necessitated online education. Finance Minister Nirmala Sitharaman has also proposed to set up a digital university to provide education that will be built on a hub and spoke model. The pandemic has accentuated mental health problems in people of all ages. To better the access to quality mental health counseling and care services, a National Tele Mental Health program will be launched.
Safe water: Safe water is an essential prerequisite for healthy life of the citizens. To ensure adequate and safe drinking water an amount of rupees 60,000 crore has been allocated for providing access to tap water to 3.8 crore households. To promote green energy in the country, the batteries and mobiles have been made cheaper. There will now more of electric vehicles.
Digital currency: In a major push for digital currency, Sitharaman stated that digital rupee will be issued using block chain technology by the RBI starting 2022-23.
This will give a big boost to the economy, the Finance Minister said. She added that income from the transfer of any virtual digital asset shall be taxed at the rate of 30 per cent.
Tax deduction limit increased: Both Centre and States government employees’ tax deduction limit has been increased from 10 per cent to 14 per cent to help the social security benefits of state government employees and bring them at par with the Central government employees.
Defence Atmanirbharta: To promote Defence ‘Atmanirbharta’ 68 per cent of the capital procurement budget for Defence has been earmarked for domestic industry to promote Atmanirbharta and reduce dependence on imports of defence equipment. This is up from the 58 per cent last fiscal. Private industry will be encouraged to produce defence equipments.
Kawach: A length of 2,000 km of rail network will be brought under the indigenous world-class technology KAWACH, for safety and capacity augmentation. Last year, the government had decided to set up an asset reconstruction company that will take over the bad loans of banks, giving them the flexibility to finance the economic recovery. The proposal to set up a ‘bad bank’ has also been cleared now. According to the State Bank of India, Chairman Dinesh Khara, the proposed ‘bad bank’ has ‘now received all necessary permissions including from the Reserve Bank of India. It is ready to commence operations with 15 cases worth Rs 50,335 crore to be transferred by March 31, he said. The government is also going ahead with the strategic transfers to implement new Public Sector Enterprise (PSE) Policy; the strategic transfer of Air India has been completed. Strategic Partner for Neelanchal Ispat Nigam has been selected; public issue of LIC is also expected shortly and others in process for 2022-23. Towards employment generation, initiatives like Production Linked Incentive (PLI) Scheme for achieving Atmanirbhar Bharat has received excellent response with a potential to create 60 lakh new jobs and additional production of 30 lakh crore during next 5 years.
According to the Finance Minister, the Budget 2022-23 also sets priorities aiming at inclusive development, productivity enhancement and investment, sunrise opportunities, energy transition, climate action and towards financing of investments. The silver lining for the country’s economy is the overall sharp rebound and recovery of the economy; as reflection of India’s strong resilience. With ‘Sabka Saath’, ‘Sabka Vikas’ and ‘Sabka Prayas’, the same momentum will go on.
(The author is a Scientist at SKUAST-K).