Key Highlights Of The Union Budget 2022-23

• Context:
  • The Union Budget seeks to complement macro-economic level growth with a focus on micro-economic level all-inclusive welfare. The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament today.
• For a basic and static portion of the Annual Financial Statement (AFS)/budget, please visit for more information:GOVERNMENT BUDGETING.

Key Highlights

• India’s economic growth is estimated at 9.2% to be the highest among all large economies.
• 60 lakh new jobs to be created under the productivity linked incentive scheme in 14 sectors.
• PLI Schemes have the potential to create an additional production of Rs 30 lakh crore.
• Entering Amrit Kaal, the 25 year-long lead up to India @100, the budget provides the impetus for growth along with four priorities:
• PM GatiShakti
• Inclusive Development
• Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action.
• Financing of investments.

• PM GatiShakti is a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure. All seven engines will pull forward the economy in unison. These engines are supported by the complementary roles of Energy Transmission, IT communication, Bulk Water & Sewerage, and Social Infrastructure.

• The scope of PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency. It will also include the infrastructure developed by the state governments as per the GatiShakti Master Plan. The focus will be on planning, financing including through innovative ways, use of technology, and speedier implementation.
• The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with PM GatiShakti framework.

• PM GatiShakti Master Plan for Expressways will be formulated in 2022-23 to facilitate faster movement of people and goods. The National Highways network will be expanded by 25,000 km in 2022-23. Rs. 20,000 crore will be mobilized through innovative ways of financing to complement the public resources.

• The data exchange among all mode operators will be brought on Unified Logistics Interface Platform (ULIP), designed for Application Programming Interface (API). This will provide for efficient movement of goods through different modes, reducing logistics cost and time, assisting just-in-time inventory management, and eliminating tedious documentation. Most importantly, this will provide real-time information to all stakeholders, and improve international competitiveness. An open-source mobility stack, for organizing seamless travel of passengers will also be facilitated.

• Contracts for implementation of Multimodal Logistics Parks at four locations through PPP mode will be awarded in 2022-23.

• 'One Station-One Product’ concept will be popularized to help local businesses & supply chains.
• As a part of Atmanirbhar Bharat, 2,000 km of the network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23. Four hundred new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.
• One hundred PM GatiShakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.

• Innovative ways of financing and faster implementation will be encouraged for building metro systems of appropriate type at scale. Multimodal connectivity between mass urban transport and railway stations will be facilitated on priority. The design of metro systems, including civil structures, will be re-oriented and standardized for Indian conditions and needs.

• As a preferred ecologically sustainable alternative to conventional roads in difficult hilly areas, National Ropeways Development Programme will be taken up on PPP mode. The aim is to improve connectivity and convenience for commuters, besides promoting tourism.
• Contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23.

• With technical support from the Capacity Building Commission, central ministries, state governments, and their infra-agencies will have their skills upgraded. This will ramp up capacity in planning, design, financing (including innovative ways), and implementation management of the PM GatiShakti infrastructure projects.

• The procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will cover 1208 lakh metric tonnes of wheat and paddy from 163 lakh farmers, and ` 2.37 lakh crore direct payment of MSP value to their accounts.
• Chemical-free Natural Farming will be promoted throughout the country, with a focus on farmers’ lands in 5-km wide corridors along river Ganga, at the first stage.
• 2023 has been announced as the International Year of Millets. Support will be provided for post-harvest value addition, enhancing domestic consumption, and branding millet products nationally and internationally.
• To reduce our dependence on the import of oilseeds, a rationalised and comprehensive scheme to increase domestic production of oilseeds will be implemented.
• For the delivery of digital and hi-tech services to farmers with the involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of the agri-value chain, a scheme in PPP mode will be launched.
• Use of ‘Kisan Drones’ will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients.
• States will be encouraged to revise syllabi of agricultural universities to meet the needs of natural, zero-budget and organic farming, modern-day agriculture, value addition and management.
• A fund with blended capital, raised under the co-investment model, will be facilitated through NABARD. This is to finance startups for agriculture & rural enterprise, relevant for farm produce value chain. The activities for these startups will include, inter alia, support for FPOs, machinery for farmers on a rental basis at farm level, and technology including IT-based support.

• Implementation of the Ken-Betwa Link Project, at an estimated cost of  44,605 crores will be taken up. This is aimed at providing irrigation benefits to 9.08 lakh hectares of farmers’ lands, drinking water supply for 62 lakh people, 103 MW of Hydro, and 27 MW of solar power. Allocations of Rs. 4,300 crore in RE 2021-22 and Rs. 1,400 crore in 2022-23 has been made for this project.
• Draft DPRs of five river links, namely Damanganga-Pinjal, Par-Tapi Narmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been finalized. 

• For farmers to adopt suitable varieties of fruits and vegetables, and to use appropriate production and harvesting techniques, the government will provide a comprehensive package with the participation of state governments.

• Udyam, e-Shram, NCS and ASEEM portals will be interlinked. Their scope will be widened. They will now perform as portals with live, organic databases, providing G2C, B2C and B2B services.
• the Emergency Credit Line Guarantee Scheme (ECLGS) will be extended up to March 2023 and its guarantee cover will be expanded by Rs. 50,000 crores to the total cover of Rs. 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.
• Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with a required infusion of funds. This will facilitate additional credit of Rs. 2 lakh crore for Micro and Small Enterprises and expand employment opportunities.
• Raising and Accelerating MSME performance (RAMP) programme with an outlay of Rs 6000 Crore to be rolled out.

• The National Skill Qualification Framework (NSQF) will be aligned with dynamic industry needs.
• Digital Ecosystem for Skilling and Livelihood – the DESH-Stack e-portal – will be launched. This aims to empower citizens to skill, reskill or upskill through online training. It will also provide API-based trusted skill credentials, payment and discovery layers to find relevant jobs and entrepreneurial opportunities.
• Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS). In select ITIs, in all states, the required courses for skilling will be started.

• ‘One class-one TV channel’ programme of PM eVIDYA will be expanded from 12 to 200 TV channels. This will enable all states to provide supplementary education in regional languages for classes 1-12.
• For vocational courses, 750 virtual labs in science and mathematics, and 75 skilling e-labs for simulated learning environments, will be set up in 2022-23.
• A competitive mechanism for the development of quality e-content by the teachers will be set up to empower and equip them with digital tools of teaching and facilitate better learning outcomes.

• A Digital University will be established to provide access to students across the country for world-class quality universal education with a personalised learning experience at their doorsteps. This will be made available in different Indian languages and ICT formats. The University will be built on a networked hub-spoke model, with the hub building cutting edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hub-spokes.

• An open platform, for the National Digital Health Ecosystem, will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.

• A ‘National Tele Mental Health Programme’ will be launched. This will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre and the International Institute of Information Technology-Bangalore (IIITB) providing technical support.

• Recognizing the importance of Nari Shakti as the harbinger of our bright future and for women-led development during the Amrit Kaal, our government has comprehensively revamped the schemes of the Ministry of Women & Child Development. Accordingly, three schemes, namely, Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were launched recently to provide integrated benefits to women and children. Saksham Anganwadis are a new generation anganwadis that have better infrastructure and audio-visual aids, powered by clean energy and providing an improved environment for early child development. Two lakh anganwadis will be upgraded under the Scheme.

• The current coverage of Har Ghar, Nal Se Jal is 8.7 crores. Of this 5.5 crore households were provided tap water in the last 2 years itself.
• Allocation of Rs. 60,000 crore has been made with an aim to cover 3.8 crore households in 2022-23.

• In 2022-23 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban. Rs. 48,000 crore is allocated for this purpose.

• A new scheme, Prime Minister’s Development Initiative for North-East, PM-DevINE, will be implemented through the North-Eastern Council. It will fund infrastructure, in the spirit of PM GatiShakti, and social development projects based on the felt needs of the North-East.
• An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth and women under the scheme.

• Border villages with a sparse population, limited connectivity and infrastructure often get left out from the development gains. Such villages on the northern border will be covered under the new Vibrant Villages Programme.
• The activities will include the construction of village infrastructure,  housing, tourist centres, road connectivity, provisioning of decentralized renewable energy, direct to home access for Doordarshan and educational channels, and support for livelihood generation.

• 100 per cent of 1.5 lakh post offices to come on the core banking system.
• Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.

• For the Amrit Kaal, the next phase of Ease of Doing Business EODB 2.0 and Ease of Living, will be launched. In our endeavour to improve the productive efficiency of capital and human resources, we will follow the idea of ‘trust-based governance’.

• The issuance of e-Passports using embedded chips and futuristic technology will be rolled out in 2022-23 to enhance convenience for the citizens in their overseas travel.

• Modernization of building bye-laws, Town Planning Schemes (TPS), and Transit-Oriented Development (TOD) will be implemented.
• Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.

• The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’ will be promoted as an option for a uniform process for registration and ‘anywhere registration’ of deeds & documents.

• Centre for Processing Accelerated Corporate Exit (C-PACE) to be established for speedy winding-up of companies.

• An animation, visual effects, gaming, and comics (AVGC) promotion task force with all stakeholders will be set-up to recommend ways to realize this and build domestic capacity for serving our markets and the global demand.

• Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities. Required spectrum auctions will be conducted in 2022 to facilitate the rollout of 5G mobile services within 2022-23 by private telecom providers.
• A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.

• The Special Economic Zones Act will be replaced with new legislation that will enable the states to become partners in ‘Development of Enterprise and Service Hubs’. This will cover all large existing and new industrial enclaves to optimally utilise the available infrastructure and enhance the competitiveness of exports.

• 68 per cent of the capital procurement budget will be earmarked for the domestic industry in 2022-23, up from 58 per cent in 2021-22.
• Defence R&D to be opened up for industry, startups and academia with 25% of defence R&D budget earmarked.
• Independent nodal umbrella body to be set up for meeting testing and certification requirements.

• Government contribution to be provided for R&D in Sunrise Opportunities like Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems.

• To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of Rs. 19,500 crore for Production Linked Incentive for the manufacture of high-efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.

• Five to seven per cent biomass pellets will be co-fired in thermal power plants resulting in CO2 savings of 38 MMT annually.
• Extra income to farmers and job opportunities to locals,
• Help avoid stubble burning in agriculture fields.

• the outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from Rs. 5.54 lakh crore in the current year to Rs. 7.50 lakh crore in 2022-23. 
• This has increased to more than 2.2 times the expenditure of 2019-20. This outlay in 2022-23 will be 2.9 per cent of GDP.

• the ‘Effective Capital Expenditure’ of the Central Government is estimated at Rs. 10.68 lakh crore in 2022-23, which will be about 4.1 per cent of GDP.

• As a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure.

• World-class foreign universities and institutions will be allowed in the GIFT City to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics free from domestic regulations, except those by IFSCA to facilitate the availability of high-end human resources for financial services and technology.
• An International Arbitration Centre will be set up in the GIFT City for the timely settlement of disputes under international jurisprudence.

• Data Centres and Energy Storage Systems including dense charging infrastructure and grid-scale battery systems will be included in the harmonized list of infrastructure.

• Introduction of Digital Rupee by the Reserve Bank of India starting 2022-23.

• The enhanced outlay for ‘Scheme for Financial Assistance to States for Capital Investment’: 
• From Rs. 10,000 crores in Budget Estimates to Rs. 15,000 crore in Revised Estimates for the current year.
• Allocation of  Rs. 1 lakh crore in 2022-23 to assist the states in catalysing overall investments in the economy: fifty-year interest-free loans, over and above normal borrowings
• In 2022-23, States will be allowed a fiscal deficit of 4% of GSDP, of which 0.5% will be tied to power sector reforms.

• Budget Estimates 2021-22: Rs. 34.83 lakh crore
• Revised Estimates 2021-22: Rs. 37.70 lakh crore
• Total expenditure in 2022-23 estimated at Rs. 39.45 lakh crore
• Total receipts other than borrowings in 2022-23 estimated at Rs. 22.84 lakh crore
• Fiscal deficit in the current year: 6.9% of GDP (against 6.8% in Budget Estimates)
• Fiscal deficit in 2022-23 estimated at 6.4% of GDP.

• The proposals in this budget, while continuing with our declared policy of a stable and predictable tax regime, intend to bring more reforms that will take ahead our vision to establish a trustworthy tax regime. This will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation.

• Provision to file an Updated Return on payment of additional tax.
• Will enable the assessee to declare income missed out earlier.
• Can be filed within two years from the end of the relevant assessment year.

• Reduce the surcharge on co-operative societies from present 12 per cent to 7 per cent for those having total income of more than Rs. 1 crore and up to Rs. 10 crores.
• To provide a level playing field between cooperative societies and companies, the government proposes to reduce this rate for the cooperative societies also to fifteen per cent.

• Increase the tax deduction limit from 10 per cent to 14 per cent on employer’s contribution to the NPS account of State Government employees as well.

• Eligible start-ups established before 31.3.2022 had been provided with a tax incentive for three consecutive years out of ten years from incorporation. In view of the Covid pandemic, the government proposed to extend the period of incorporation of the eligible start-up by one more year, that is, up to 31.03.2023 for providing such tax incentive.

• For the taxation of virtual digital assets, It proposes to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent.
• No deduction in respect of any expenditure or allowance shall be allowed while computing such income except the cost of acquisition. 
• Further, loss from the transfer of virtual digital assets cannot be set off against any other income.
• Further, in order to capture the transaction details, It also proposes to provide for TDS on payment made in relation to transfer of virtual digital assets at the rate of 1 per cent of such consideration above a monetary threshold.
• The gift of a virtual digital assets is also proposed to be taxed in the hands of the recipient.

• In cases where a question of law is identical to the one pending in the High Court or Supreme Court, the filing of appeal by the department shall be deferred till such question of law is decided by the court.
• To greatly help in reducing repeated litigation between taxpayers and the department.

• Subject to specified conditions, the following to be exempt from tax
• Income from over the counter derivatives issued by an offshore banking unit.
• Income of a non-resident from offshore derivative instruments.
• Income from royalty and interest on account of the lease of the ship.
• Income received from portfolio management services in IFSC.

• Surcharge on AOPs (a consortium formed to execute a contract) capped at 15 per cent.
• Done to reduce the disparity in surcharge between individual companies and AOPs.
• Surcharge on long term capital gains arising on transfer of any type of assets capped at 15 per cent.
• To give a boost to the startup community.

• Any surcharge or cess on income and profits is not allowable as business expenditure.

• No set-off, of any loss to be allowed against undisclosed income detected during search and survey operations.

• Benefits passed on to agents as business promotion strategy taxable in hands of agents.
• A tax deduction is provided to the person giving benefits if the aggregate value of such benefits exceeds Rs 20,000 during the financial year.

• GST revenues are buoyant despite the pandemic. Taxpayers deserve applause for this growth. Not only did they adapt to the changes but enthusiastically contributed to the cause by paying taxes.

• Customs Administration of SEZs to be fully IT-driven and function on the Customs National Portal – shall be implemented by 30th September 2022.

• Faceless Customs has been fully established. During the Covid-19 pandemic, Customs formations have done exceptional frontline work against all odds displaying agility and purpose.

• Gradually phasing out of the concessional rates in capital goods and project imports; and applying a moderate tariff of 7.5 percent   – conducive to the growth of the domestic sector and ‘Make in India’. 
• Certain exemptions for advanced machinery that are not manufactured within the country shall continue.
• A few exemptions were introduced on inputs, like specialised castings, ball screw and linear motion guide – to encourage domestic manufacturing of capital goods.

• More than 350 exemption entries proposed to be gradually phased out, like exemption on certain agricultural products, chemicals, fabrics, medical devices, & drugs and medicines for which sufficient domestic capacity exists.

• Customs duty rates to be calibrated to provide a graded rate structure – to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters.
• Duty concessions to parts of the transformer of mobile phone chargers and camera lens of mobile camera module and certain other items – To enable domestic manufacturing of high growth electronic items.

• Customs duty on cut and polished diamonds and gemstones being reduced to 5 per cent; Nil customs duty to simply sawn diamond – To give a boost to the Gems and Jewellery sector
• A simplified regulatory framework to be implemented by June this year – To facilitate export of jewellery through e-commerce.
• Customs duty of at least Rs 400 per Kg to be paid on imitation jewellery import – To disincentivise import of undervalued imitation jewellery.

• Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feedstocks for petroleum refining being reduced; Duty is being raised on sodium cyanide for which adequate domestic capacity exists – This will help in enhancing domestic value addition.

• Customs duty on umbrellas being raised to 20 per cent. Exemption to parts of umbrellas being withdrawn.
• Exemption being rationalised on implements and tools for agri-sector which are manufactured in India
• Customs duty exemption given to steel scrap last year extended for another year to provide relief to MSME secondary steel producers
• Certain Antidumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked – to tackle prevailing high prices of metal in the larger public interest.

• To incentivise exports, exemptions are being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes.
• Duty being reduced on certain inputs required for shrimp aquaculture – to promote its exports.

• Unblended fuel to attract an additional differential excise duty of Rs 2/ litre from the 1st of October 2022 – to encourage the blending of fuel.