Union Budget 2022 highlights | No changes in Income Tax

On February 1, Union Finance Minister Nirmala Sitharaman announced the Union Budget 2022. India’s economic growth has been predicted to reach 9.2 percent, the highest among global economies. While 60 lakh new jobs would be generated in 14 industries as part of the productivity-linked incentive plan.

Finance Minister Nirmala Sitharaman, in the Union Budget 2022-23, has raised the bet on public capital expenditure to pump prime the investment cycle and India’s economic recovery from the pandemic through 2022-23.

This is a bit more than 27% more than the revised estimate of 8.4 lakh crore for the current fiscal year. And it is about 28% more than the 2020-21 estimates for similar capital investment.

Presentation of Budget 2022-23 in Parliament:

The multiplier effects of the substantial rise in public investment in last year’s Budget continue to boost India’s economic recovery. But the Capex holds the key to a quick and sustainable rebound and job creation.

Digital currency, e-passports, and a slew of infrastructure projects are among the significant announcements. While the edible oil, wearable electronics, imitation jewelry, and polished diamonds will be less expensive. The fiscal deficit amounts will be 6.9 percent of GDP. But, the personal income tax rates remain unchanged.

The highlights of Budget 2022 in a glance:

Infrastructure:

• PM Gati Shakti National Master Plan at a cost of ₹20,000 crore
• 60 km of ropeway projects under the Parvat Mala project
• Metro systems, multi-model connectivity
• 100 Gati Shakti cargo terminals in the next 3 years.

Agriculture:

• Procurement of wheat, paddy, Kharif, and rabi crops, benefiting over 1 crore farmers.
• NABARD to facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
• ₹2.37 lakh crore towards direct payments for a minimum support price.
• 2022 to be Year of Millet – support for post-harvest value addition for millet products
• Using Kisan drones for crop assessment and spraying of pesticides
• Ken-Betwa river linking project for Rs 44,000 crore, to benefit 9.0 lakh hectares of farmer land

Defense:

• 68% capital procurement budget earmarked for domestic procurement.
• Defense R&D to be opened up for start-ups, private industry, and academia. While 25% of the R&D budget to be set aside for this.

Tax, economy, and finance:

• Fiscal deficit is 6.9% of GDP.
• Taxpayers can file within 2 years an updated return if there is an anomaly in their filing.
• Cooperative societies pay 18.5% alternate minimum tax and companies pay 15%. But now on cooperative too will have to pay only 15%.
• Tax relief to persons with disabilities.
• The tax deduction limit for NPS accounts of state govt employees to 14%.
• Custom duty on cut and polished diamond reduced to 5%.
• Customs duty on imitation duty slashed.
• Duty on Sodium cyanide increased.
• Steel scrap duty extended for another year.
• Duty reduced on shrimp aquaculture.

Introducing the new technology in the Budget 2022-23 session:

The increase in capital investment would also increase demand for services and manufactured components from major enterprises. While the micro, small, and medium-sized companies (MSMEs) also assist farmers through improved infrastructure.

“The economy has demonstrated remarkable resilience in recovering from the pandemic’s consequences with significant growth.” “However, we must maintain that level to compensate for the 2020-21 setback,” she stated.

While the Economic Survey released on January 31 observed that fledgling private investment is beginning. But the Finance Minister stated that they still appear to require assistance to reach their full potential and meet the demands of the economy. “In 2022-23, the public investment must continue to take the lead and pump-prime private investment and demand,” she added.