Union Budget 2022-23: Capex push
Sandeep Dikshit
New Delhi, February 1
The Union Budget has proposed Rs 2 lakh crore increase in government capital expenditure and extended Rs 1 lakh crore interest-free loan to states in order to target growth of 8.2 per cent in 2022-23. With anticipated growth of 9.2 per cent in the current fiscal, the economy would have recovered 101.3 per cent of the pre-pandemic output of 2019-20 by March 31, 2022.
Seven focus areas
PM Gati Shakti I Inclusive Development I Productivity Enhancement I Sunrise Opportunities I Energy Transition I Climate Action I Financing of investments
Presenting the Rs 39.45 lakh crore Budget in the Lok Sabha, the Union Finance Minister left personal income tax rates untouched, increased tax deductions for investments in national pension schemes for government employees but imposed a 30 per cent tax on income from virtual digital assets. In an attempt to enthuse the real estate sector, long-term capital gains tax has been capped at 15 per cent instead of the earlier band of 15 to 35 per cent.
Editorial: Focus on spending: Budget banks on infra push to sustain economic recovery
There was little room for concession as the fiscal deficit for 2021-22 slipped by 0.1 per cent to 6.9 per cent and is projected at 6.4 per cent in 2022-23. Moreover, interest payment and servicing of debt rose by Rs 1.26 lakh crore to nearly Rs 9.5 lakh crore in 2022-23. While sops for the middle class were few, the big picture from the Budget was the increase in outlay for capital expenditure by 35.4 per cent to Rs 7.5 lakh crore in 2022-23 with Sitharaman claiming that the effective capital expenditure will be Rs 10.68 lakh crore, or 4.1 per cent of the GDP. As joblessness became a concern and privatisation its subtext, the target from disinvestment for 2022-23 is a scaled down Rs 65,000 crore and instead of the Rs 1.75 lakh crore budgeted for 2021-22 , the realisation was Rs 78,000 crore.
A hike of Rs 1 lakh crore is for extending National Highways by 25,000 km, an extra Rs 20,000 crore in capital expenditure for the Railways and Rs 1.5 lakh crore for the defence sector. And, a Gati Shakti masterplan will guide big private investment in seven sectors of the Rs 100 lakh crore National Infrastructure Pipeline. These are roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure.
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2nd session of gains in row
CLOSES AT 58,862.57
- NSE Nifty rallies 237 points to end higher at 17,576.85
- Tata Steel zoomed 7.57%, followed by Sun Pharma, IndusInd Bank, L&T, ITC, Titan
Hoping to evoke a matching response from the private sector to spur job creation, the government extended the production linked incentive scheme (PLI) to the manufacturing of solar modules. The Budget also extended for one year the concessional corporate tax of 15 per cent on newly incorporated manufacturing companies.
Looking into the difficulties faced by the industry, the Budget announced the scrapping of anti-dumping duty on certain steel products from China.
All talk of 100 smart cities in the earlier Budgets was replaced by the announcement of a high-level panel to be set up for urban planning, new and modern building bylaws and increased promotion of public transport in urban areas. Similarly, there was no mention of doubling farmers’ income. Instead, the Budget spoke of “a wave of technology in agri sector’’ such as kisan drones, natural farming along the Ganga river corridor and six projects on river interlinking, including the Rs 44,605 Ken-Betwa plan.
In the social sector, Rs 60,000 crore will be allocated for access to tap water to 3.8 crore households and 80 lakh houses will be completed in 2022-23 under PM Awas Yojana. The allotment for MGNREGA remained nearly equal to that of last year’s Rs 73,000 crore despite revised estimates for the current year coming at Rs 98,000.
- Capital expenditure up by 35.4%, from Rs5.54 L cr to Rs7.50 L cr
- No change in personal income tax
- RBI to introduce digital rupee
- 30% tax on digital virtual assets
- e-Passports to be rolled out
Proposals at a glance
39.45 lakh cr: Total expenditure outlay
Rs11.6 lakh cr: Govt to borrow from market
Infra & manufacturing
National highway network to be expanded by 25,000 km
100 PM Gati Shakti terminals to be set up in next three years
Housing & urban planning
Rs48,000 crore allotted for Prime Minister Awas Yojana
In 2022-23, 80 lakh houses will be completed under the Yojana
Taxation & NPS account
Updated Income Tax returns can be filed within two years
Surcharge on long-term capital gains capped at 15%
Tax deduction limit increased to 14% on employers’ contribution to NPS account of state government employees
Agriculture sector
2022-23 has been announced International Year of Millets
Telecommunication
Spectrum auction in 2022 for rollout of 5G network
Contract for optical fibre in villages under BharatNet, PPP mode
COSTLIER: Umbrellas I Imitation jewellery I X-ray machines I Parts of electronic toys I Headphones I Imported items I Solar cells
Cheaper: Apparel I PCs/laptops I Cut & polished diamonds I Methyl alcohol I Cocoa beans I Cellphone camera lens I Phone chargers
Ministry-wise allocations (Rs. crore)
- Defence: 5,25,166.15
- Education: 1,04,277.72
- Railways: 1,40,367.13
- Health: 82,600
- Road Transport and Highways: 1,99,107.71
- Agriculture and Farmers’ Welfare: 1,32,513.62
- Communications: 1,05,406.82
- Chemicals and Fertilisers: 1,07,715.38
- Rural Development: 1,38,203.63
- Home Affairs: 1,85,776.55
- Consumer Affairs: 2,17,684.46
(source Budget document)
Looking 25 years on
This Budget gives the blueprint to steer economy over Amrit Kaal: from India at 75 to India at 100. — Nirmala Sitharaman, Finance Minister