Tuesday, 1st February 2022, witnessed the Union Budget ceremony presented by India’s Finance Minister, Ms. Nirmala Sitharaman.
She carried a tablet to read out budget allocations for all industries, spiraling the notion of digitalization in the country.
Let us go through the key highlights of Budget’22 to see what the government has planned for the country this year.
Digitalization and Technology
There’s been a tremendous focus on digitalization by the government off-late, and the budget is proof of that.
The key highlights in the digitalization and technology sector were –
1. Forming a digital university will take place across the country to provide Indian students accessibility to remote learning and world-class teaching. The classes will be conducted in several regional languages to promote education in all areas and enhance students’ academic performance.
2. There will be a 5G spectrum auction conducted in the year 2022–23 to roll out a 5G mobile service network this year by private entities. A design-led spectrum will also be launched to curate a solid ecosystem for 5G to promote strong network coverage across the country.
3. All post offices, accounting for 35 crores in number, will now be connected to the banking system. This will help people in remote and rural areas and senior citizens access their PO accounts easily on their mobile phones. People will also be able to transfer funds between different post office accounts and banks seamlessly.
4. A national digital health ecosystem is in place to be rolled out soon to improve healthcare in the country and enhance patient care and account organization. A new addition to this scheme is the National Tele Mental Health Program, which has been launched for the mental health of the citizens affected due to the pandemic that will offer quality counseling.
5. The country is set to launch its first official digital rupee, which will work on the blockchain network. A central bank digital currency. It will boost the country’s digital economy by fostering technology-based overpayments and India’s outlook on cashless payments.
6. 75 banking systems are ready to be launched in 75 different districts to foster easy financial transactions in both rural and urban areas.
7. Chip embedded e-Passports with futuristic technology will be launched to help all citizens with seamless overseas travel. Using physical passports will be minimized with this digitalization step.
A great focus on the country’s infrastructure has come to light with the Union Budget 2022.
From building highways, funding the enhancement and construction of railways, providing support to other development initiatives – around Rs. 40 lakh crores have been set aside to fund India’s infrastructure.
1. National highways are all set to be expanded by 25,000 kilometers this year, along with the national ropeway development program launching in the public-private partnership model. The robust road network in the country will help in India’s economic boom and highway network enhancement.
2. 400 new generation Vande Bharat trains and 100 new cargo terminals will be introduced and developed in the coming three years. Around 1.5 lakh crores have been allocated to railways this year.
3. Rs. 1500 crores have been set aside especially for the development initiatives of North East along with supporting livelihood activities for the women and youth of the state.
4. Multi-modal logistics parks will be implemented this financial year in four different locations.
This will enhance the freight-handling capacity of the country with a minimum area of 100 acres for each unit with specialized storage areas, easy transportation, and mechanized warehouses.
Since agriculture is the backbone of our country, it has always been one of the biggest focuses in every budget.
This year, too, the focus on farmers and their sustainability has been considered a priority by ensuring that the livelihood of our Kisaans is protected.
1. Assured income to all farmers have been announced with an allocation of over Rs. 2 lakh crores that will come into the direct minimum support price payment for wheat and paddy agriculture this year.
2. Kisan Drones for crop assessment, digitalization of records, and spraying of insecticides are being given a huge focus as well, with the government hugely supporting all Drone making startups to fuel Indian agriculture with technology.
3. The center is supporting chemical-free and natural farming through PPP by delivering high-tech services and digitalization to all farmers of the country. Funds have been allocated to fully support agricultural and rural-based startups and enterprises.
4. More and more enhancements are being considered in the agroforestry and private forestry sectors of Indian agriculture, with legislative changes taking place along with financial support to farmers from the SC and ST cases.
5. The syllabus for agricultural universities will be updated this year to align with a natural zero-budget, organic farming, value addition management, and modern-day agricultural system.
Even though the income tax slabs remain the same as before, there have been some changes in the taxation policies.
1. All digital assets, including cryptocurrencies and the newly launched Digital Rupee, will be taxed at the rate of 30%. Both transfers and profits will be included in this tax percentage, with no computation of expenditure or allowance deduction, except for the cost of acquisition of these assets. An additional 1% TDS will be charged while using digital assets during any financial transaction to maintain the record.
2. All center and state government employees will witness an increase in the tax deduction limit from 10% to 14% to enhance the social security benefits provided by the state governments to their employees and bring them equal to the central government employees.
3. A corporate surcharge reduction was also carried out as a part of the Union budget 2022, which was reduced from 12% to 7.
4. Cooperative societies will be charged a 15% alternative minimum tax against the previous 18.5%, whereas companies will be allowed to pay 15% only.
5. The government has fixed a 15 percent corporate tax rate for all new manufacturing companies till the end of this financial year 2022–2023.
About 1 lakh crore is allocated to help the country with investments, including assisting states in accelerating the overall economic investment idea.
1. India will now issue sovereign bonds to fund green infrastructure in the country as a part of the government’s borrowing program this year. This will help people invest in government securities with potential returns in the future.
2. Rs. 7.5 lakh crore is being allocated towards capital expenditure with a big CAPEX push for the country’s economic revival after over two years of the pandemic.
3. The country’s disinvestment has been pegged at Rs. 65,000 crores through state-owned companies, below last year’s amount of 1.75 lakh crore, signaling the reduction of the government in businesses.
4. The government will seek an investment of $203 billion by launching its LIC IPO at a 5% sale of its stake in the company.
5. Capital investment will rise from 1.3% to 2.9% of GDP to fund the economy.
An increase of Rs. 11,000 crores than usual, the Union Budget has allocated around Rs. 1 lakh crore for the education sector and is all set to greatly focus on the betterment of the students who were among the worst-hit during the pandemic.
1. A One-Class TV Channel initiative is being considered under the PM’s e-Vidya scheme. The education channels will be expanded from 20 to 200 to foster quality education across different languages and subjects.
2. Digital education is also on a boom, with over Rs. 400 crores allocated to the same.
3. A scheme to deliver high-quality e-content through different courses will be launched that will take place in the online mode through digital teachers.
4 Rs. 1800 crores have been allotted to 15,000 schools to implement the National Education Policy 2020 and enhance the quality and excellence that schools have to offer.
5. The research and innovation department will be given Rs. 200 crores, with grants amounting to Rs. 9420 crores (central universities) and an increase in IIT and IIM grants compared to last year.
Welfare has always been an important focus of the Indian government as it fosters the quality of living for its citizens.
Some amendments have taken place under welfare schemes in this year’s budget.
1. 80 lakh houses are all set to be completed this year under the PM Awas Yojana.
2. 3.8 crore Indian households will be covered under the Har Ghar Nal Se Jal program to guarantee continuous water supply in both rural and urban areas.
3. An aspirational block program will be launched to develop lagging blocks of all the aspirational districts and take them to new heights.
4. A close focus will be put on the Northern Border villages that have been overlooked from a developmental gains perspective under the Vibrant Villages Program.
The union budget 2022 has witnessed total governmental spending of Rs. 3,944,909 crores, a little over last year’s expenditure.
Though some sectors have seen a cut in budget allocation, some sectors like digitalization, technology, and infrastructure, have been on a higher surge than ever.
There is a clear focus to make India digitalized with more and more programs launching to foster technical advancements through different sectors of the country.