Detailed Union Budget for Financial Year 2022-2023

The Union Budget, also referred to as the annual financial statement or annual budget, is a document presented by the Finance Minister of India that details the government’s plans for revenue and spending for the upcoming fiscal year. The budget is presented to the Indian Parliament typically at the end of February and it covers the government’s plans for taxation, expenditure and economic policies. Additionally, it also presents predictions for key economic indicators such as growth and inflation.

Also Read: Highlights of the Union Budget 2022-2023

The Union Budget 2022-23 is Divided into Two Parts:

The Capital budget is divided into two main categories: Capital receipts and Capital expenditures. Capital receipts refer to the money received from sources such as loans from the Reserve Bank of India, foreign governments, or individual citizens. Capital expenditures, on the other hand, refer to the costs associated with maintaining and developing health facilities, buildings, machinery, and other similar items.

Here is a Look at the Union Budget for 2022-2023

The objectives for the fiscal year 2022-23 budget are intended to advance India’s ambitions in the realm of Amrit Kaal as the country approaches its 100th year of independence.

Making sure that the economy grows and everyone benefits
Using technology to improve development, switching to clean energy, and taking action on climate change
Encouraging private companies to invest, which will then attract more public investment.

Features of the Union Budget for 2022-2023

Key features of the budget often include allocation of funds for various sectors such as education, healthcare, infrastructure, and more. Following are the features of the Union Budget for 2022-2023:

1. Expanding State Fiscal Capacity

The government has decided to give more money to states for capital investments, increasing the amount from 10,000 crore to 15,000 crore rupees for the current year.
In the next financial year (2022-23), states will be given 1 lakh crore rupees to help them make more economic investments. This money will be given as 50-year loans without interest.
In 2022-23, states will be allowed to have a higher budget deficit of 4% of their GDP, with an additional 0.5% specifically for power sector reforms.

Promotion of chemical-free natural farming across the country, with an initial focus on farmer’s lands within 5 km corridors along the Ganges River
Direct payment of Rs.2.37 lakh crore to 1.63 crore farmers for procuring wheat and paddy
Use of “Kisan Drones” for crop assessment, digitization of land records, and spraying of insecticides and nutrients.
NABARD to provide funding with blended capital to finance startups in agriculture and rural enterprise

3. Education

The government will create high-quality digital educational materials for teachers to use.
The “One class-One TV channel” program, which provides educational content on television, will be expanded to include 200 channels.
A new digital university will be established to provide universal education with personalized learning experiences.
Virtual labs and skilling e-labs will be created to promote critical thinking skills and simulated learning environments for students.

4. MSMEs & Industry

The government will link different portals (Udyam, e-shram, NCS, and ASEEM) to make it easier for small businesses to access services and information.
Small businesses (MSMEs) will be able to borrow more money through a program called Emergency Credit Linked Guarantee Scheme (ECLGS).
The ECLGS program will be available until March 2023 to give small businesses more time to take advantage of it.
The government will increase the amount of money that is guaranteed through ECLGS by Rs. 50,000 crore, bringing the total amount guaranteed to Rs. 5 lakh crore.
The Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) will make an additional Rs. 2 lakh crore in credit available to small businesses.
The government will launch a program called Raising and Accelerating MSME Performance (RAMP) with a budget of Rs. 6,000 crore to help small businesses improve and grow.

5. Saksham Anganwadi

Programs such as Mission Shakti, Mission Vatsalya, and Poshan 2.0 are being implemented to provide various benefits to women and children.
2 lakh childcare centers (anganwadis) will be improved and upgraded to Saksham Anganwadis.

6. Public Capital Investment

To increase private investment and consumer demand, the government is planning to invest more money in the 2022-23 fiscal year.
In the 2022-23 fiscal year, the budget for infrastructure and equipment expenses has been raised significantly by 35.4%, reaching Rs.7.50 lakh crore, compared to Rs.5.54 lakh crore in the current year.
The total investment in 2022-23 is projected to be around 2.9% of the country’s GDP.
To make meaningful investments in areas such as infrastructure, the Central Government is expected to invest Rs.10.68 lakh crore in 2022-23, which is around 4.1% of GDP.

7. Health

An open platform for National Digital Health Ecosystem will be rolled out to provide easy access to digital health information
A National Tele Mental Health Programme will be launched to offer quality mental health counseling and care services over the phone
A network of 23 tele-mental health centers of excellence will be established, with NIMHANS as the nodal center and IIITB providing technology support.

8. Sunrise Opportunities

The government plans to provide funding for research and development on innovative projects such as creating smarter artificial intelligence, developing technology to understand the earth, researching the field of semiconductors, exploring space-based commercial opportunities, studying genetics and pharmaceuticals, creating sustainable energy sources and developing clean transportation systems.

9. Energy Transition & Climate Action

Financial support will be provided to farmers from Scheduled Castes and Scheduled Tribes who want to engage in agro-forestry.
Four pilot projects will be established to study the use of coal gasification and the conversion of coal into chemicals for industrial use.
Using biomass pellets will help to reduce the practice of stubble burning in agricultural fields.
Using biomass pellets will help to reduce the practice of stubble burning in agricultural fields.
Power plants will use a mixture of 5-7% biomass pellets and coal to reduce CO2 emissions by 38 MMT annually.
The government will provide 19,500 crore INR in incentives to increase the production of high-efficiency solar modules, with the goal of reaching 280 GW of installed solar power by 2030.

10. Banking

All 1.5 lakh post offices in India will be connected to a central banking system.
75 Digital Banking Units (DBUs) will be established in 75 districts by Scheduled Commercial Banks.

11. Railways

Upgrading 2000 km of railway network with Kavach, a premier indigenous technology, in 2022-23.
Developing 100 PM GatiShakti cargo terminals for optimized logistics in the next three years.
Implementing “One Station One Product” to aid local businesses and supply chains.
Producing 400 advanced Vande Bharat Trains over the next three years.

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

Introduction of PM-DevINE to finance infrastructure and social initiatives in North-East India.
Providing a starting budget of Rs. 1,500 crore to support livelihood opportunities for young people and women through PM-DevINE.

13. AtmaNirbharta in Defence

The government plans to raise the domestic industry’s share of the capital procurement budget from 58% to 68% in the 2022-23 fiscal year.
The defence R&D budget will allocate 25% to industry players, start-ups, and academic institutions to drive innovation.
A central body will be established to handle testing and certification requirements in an efficient manner.

14. Energy Transition and Climate Action

Rs. 19,500 crore allocated for Production Linked Incentive for high-efficiency solar module production to reach 280 GW by 2030.
Co-firing of 5-7% biomass pellets in thermal power plants:
- 38 MMT CO2 savings annually
- Extra income for farmers and local job creation
- Prevention of stubble burning in agriculture.
Four pilot projects for coal gasification and coal-to-chemical conversion for industry.
Financial aid for SC/ST farmers who wish to pursue agro-forestry.

15. GIFT-IFSC

Foreign universities and institutions can establish in GIFT City.
International Arbitration Centre to be established for prompt dispute resolution under international law.

16. Digital Rupee

The Reserve Bank of India intends to launch a digital representation of the Rupee in the next financial year. This move will modernize the traditional currency and provide an easier and faster means of financial transactions for citizens and companies alike.

17. Tax Relief to Disables

Dependent disabled individuals to receive annuity and lump sum from insurance scheme during lifetime of parents/guardians (at age 60).

18. Incentives for Start-ups

Incorporation period extended for eligible start-ups to avail tax benefit, now ending 31.03.2023
Previous end date for incorporation was 31.03.2022

19. Scheme for Taxation of Virtual Digital Assets

Receiving a gift of a virtual digital asset is also taxed
No deductions are permitted except for the cost of acquisition when determining income
A new tax system has been established for virtual digital assets
TDS at a rate of 1% on the consideration above a specified amount is required to capture transaction details
Income from transferring virtual digital assets is taxed at a rate of 30%
Losses from virtual digital asset transfers cannot be used to offset other income

20. Jewellery & Gems

Nil customs duty on simply sawn diamonds.
Boost for Gems and Jewellery sector.
Imitation jewellery import subject to minimum customs duty of Rs 400/kg to disincentivize undervalued imports.
Customs duty on cut/polished diamonds/gemstones reduced to 5%.
Simplified regulatory framework to be in place by June 2023 for e-commerce jewellery export.