In Her Shortest Budget Speech, FM Sitharaman Charts Long-term Roadmap for India’s Real and Virtual Future

In Her Shortest Budget Speech, FM Sitharaman Charts Long-term Roadmap for India's Real and Virtual Future

Union finance minister Nirmala Sitharaman on Tuesday unveiled a Rs 39.45 lakh crore Budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy to sustain a world-beating recovery from the Covid pandemic.

After making records of the longest Budget speech, Sitharaman on Tuesday presented her shortest one so far, at about 90 minutes.

While she primed up spending on infrastructure to create jobs and boost economic activity, Sitharaman did not tinker with income tax slabs or tax rates.

Her Budget for the fiscal year beginning April 2022, which came just ahead of elections in five key states, proposed a massive 35 per cent jump in capital expenditure to Rs 7.5 lakh crore, coupled with rationalisation of customs duty, an extension of time for setting up new manufacturing companies and plans for starting a digital currency and taxing crypto assets.

At a post-Budget press conference, she parried questions on the middle class not being given relief in the form of tax cuts or raising of exemption, saying the Budget has not raised taxes last year or this year.

“We did not try to raise money through higher taxes as we did not want to burden people with taxes during a pandemic,” she said.

The Budget, like last year, gave a big boost for infrastructure spending — from 5G spectrum auction, expanding national highways by 25,000 kms, inter-linking of rivers and manufacturing of 400 new generation Vande Bharat trains.

“The overall sharp rebound and recovery of the economy is reflective of our country’s strong resilience,” she said in her Budget speech in the Lok Sabha, vowing to lay the foundation for faster growth.

The Budget raised duties on imported headphones, loudspeakers, smart meters used by power distribution companies and solar panels to bolster local manufacturing and create jobs. It also proposed to withdraw the anti-dumping tax on some steel products and extend an import duty exemption on scrap for another year as local consumers grapple with high prices for the alloy.

Sitharaman also announced a new battery swapping policy for electric vehicles, allocated Rs 60,000 crore for piped water to 3.8 crore homes, provided Rs 19,500 crore worth of additional production-linked incentives for solar modules to boost local manufacturing and classified data storage as an infrastructure sector for providing cheaper and easier financing.

To boost infrastructure, she said contracts to lay optical fibre in rural areas will be awarded, Rs 48,000 crore has been set aside for affordable housing, national highways network will be expanded by 25,000 km, 4 multi-modal logistics parks will be set up, a string of ropeway projects are planned in hilly areas, a battery swapping policy will be announced, high priority has been accorded for Ken-Betwa river link project and defence R&D opened to private players.

Also, a plan to use biomass pellets in thermal power plants in bid to rely less on coal was announced.

An auction of 5G telecom spectrum is planned in 2022, digital financial services are planned to be expanded and 1.5 lakhs post offices are to be connected to the core banking platform for financial inclusion and banking access to the non-banked population.

On the other hand, food, fertiliser and other subsidy outgo has been cut by 39 per cent.

Total government spending will be 4.6 per cent more than the current year and additional support of Rs 1 lakh crore to states has been announced.

The government continues on its path of supply-side economics and plans to boost investments, thereby increasing jobs and consumption instead of directly announcing any monetary relief to the lower end of the population.

The spending is being financed by a record borrowing which would include green bonds.

The fiscal deficit, which unexpectedly rose to 6.9 per cent of the GDP for the current fiscal year ending March 31, 2022, is projected to come down to 6.4 per cent next year and 4.5 per cent by 2025-26.

India’s economy is projected to grow by 9.2 per cent in the current fiscal, before slowing to 8-8.5 per cent in 2022-23 (April 2022 to March 2023). It had contracted by 6.6 per cent in the fiscal year ended March 31, 2021.

The Budget’s “approach is driven by seven engines,” Sitharaman said, listing roads, railways, airports, ports, mass transport, waterways and logistics infrastructure as the key areas.

“All seven engines will pull forward the economy in unison”, complemented by energy transmission, IT communication, water and sewerage sector and social infrastructure, she said.

On the direct tax front, to further ease compliances for taxpayers, a new IT return system will be introduced and litigation will be reduced by restricting appeal rights of revenue authorities for consecutive years.

It marginally increased the time limit to commence production by March 31, 2024 for units opting for the beneficial corporate tax rate of 15 per cent.

Here’s a closer look at some of the focus areas of the Budget.

Agriculture

In a bid to tap the allied farm and food processing sectors to boost farmers’ income, the government on Tuesday proposed higher budget allocation for these two sectors for the next fiscal, besides announcing finance support for startups, promotion of Kisan drones and PPP mode for delivery of high tech agri-services to farmers.

Sitharaman said inclusive development is one of the four priorities of the government moving forward.

The Budget allocation for the Ministry of Agriculture and Farmers’ Welfare has been raised marginally by 4.5 per cent to Rs 1,32,513 crore for 2022-23 fiscal.

However, the Budget allocation for the Ministry of Fisheries, Animal Husbandry and Dairying has been increased by 44 per cent to Rs 6,407.31 crore and for Food Processing Industries by 2.25 times to Rs 2,941.99 crore for the next fiscal.

The finance minister said as part of the inclusive development, the government will implement a “rationalised and comprehensive scheme” to increase domestic oilseed production, thereby reducing the country’s dependence on the import of edible oils.

The government will also bring in legislative and policy changes to promote agro-forestry and implement a comprehensive package, with states to adopt suitable varieties of fruits and vegetables that can be processed.

Further, the government will promote the use of ‘Kisan Drones’ for crop assessment, digitisation of land records and spraying of insecticides, she added.

To finance startups and rural enterprises working in agri-space, the minister said the government will facilitate a fund with blended capital raised under the co-investment model through Nabard.

“This is to finance startups for agriculture and rural enterprise relevant for farm produce value chain,” she noted.

The activities of these startups will include inter-area support for farmer-producer organisations (FPOs), machinery for farmers on a rental basis at the farm level and technology, including invitee base, she added.

The finance minister further said the government will promote chemical-free natural farming throughout the country with a focus on farmers’ lands in five-kilometre wide corridors along the river Ganga in the first stage.

For the delivery of digital and high-tech services to farmers, she said the government will launch a scheme of public-private partnership (PPP) model with the involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of agri value chains.

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, she added.

On the procurement of agri-crops, the minister said the government’s procurement of wheat and paddy at the minimum support price (MSP) during 2021-22 will cover 1,208 lakh tonnes from 163 lakh farmers.

For the next fiscal, the government has allocated an estimated budget of Rs 6,75,000 crore for PM-KISAN, Rs 15,500 crore for the crop insurance scheme, Rs 7,183 crore for the Krishonnati Yojana, Rs 10,433 crore for the Rashtriya Krishi Vikas Yojana (RKVY) and about Rs 1,500 crore for Market Intervention Scheme-Price Support Scheme.

Education

A digital university to be built on the ‘hub-and-spoke’ model and expansion of ‘one class-one TV channel’ programme through 200 channels for providing supplementary education in regional languages in schools are among the major initiatives in the education sector proposed by the Finance Minister.

The overall financial allocation for the education sector for 2022-23 has increased to Rs 1.04 lakh crore from Rs 93,224 crore (Budget estimate) in 2021-22 as the minister laid emphasis on digital modes of education to reverse learning losses caused by the coronavirus pandemic. The revised estimate for 2021-22 is Rs 88,001 crore.

The minister said that five institutions will be recognised as Centres of Excellence on urban planning and the AICTE will take the lead on developing curriculum for them, while world-class foreign universities will be allowed in Gujarat International Finance Tec (GIFT), City to offer programmes in financial management, science, tech, etc free from domestic regulations.

Presenting the budget for 2022-23, the finance minister said that due to the pandemic-induced closure of schools, children, particularly in the rural areas and those from Scheduled Castes, Scheduled Tribe, and other weaker sections, have lost almost two years of formal education.

“Mostly, these are children in government schools. We recognise the need to impart supplementary teaching and to build a resilient mechanism for education delivery.

“For this purpose, ‘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,” she said.

The digital university will be established to provide access to students across the country for world-class quality universal education with personalised learning experience at their doorsteps. This will be made available in different Indian languages and ICT formats, she said.

“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,” added Sitharaman.

The finance minister proposed that in vocational courses, to promote crucial critical thinking skills and give space for creativity, 750 virtual labs in science and mathematics, and 75 skilling e-labs for a simulated learning environment, will be set up in 2022-23.

“High-quality e-content in all spoken languages will be developed for delivery via internet, mobile phones, TV and radio through Digital Teachers. 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,” she said.

Sitharaman announced that for developing India-specific knowledge in urban planning and design, and to deliver certified training in these areas, up to five existing academic institutions in different regions will be designated as centres of excellence.

“These centres will be provided endowment funds of Rs 250 crore each. In addition, AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions.

“World-class foreign universities and institutions will be allowed in the Gujarat International Finance Tec (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,” she said.

School education outlay for 2022-23 is at Rs 63,449.37 crore, nearly Rs 9,000 crore more than 2021-22.

The country’s biggest school education scheme, the Samagra Shiksha Abhiyan, has been allocated Rs 37,383.36, an increase of more than Rs 6,000 crores from Budget 2021.

Funds for the Kendriya Vidyalayas and Jawahar Navodaya Vidyalayas have increased to Rs 7,650 crore and 4,115 crore respectively.

The Centre has allocated Rs 40,828 crore to the Education Ministry’s Higher Education Department for the next financial year, which is an increase of 6.6 percent over the current financial year.

In 2021-22, the budget for the Higher education department was Rs 38,350.65 crore and it further dropped to Rs 36,031.57 in the revised estimates.

Health

The health sector has been allocated Rs 86200.65 crore in the Union Budget, a hike of 16 per cent over Rs 73,931 crore in 2021-22, with the government also announcing a National Tele Mental Health Programme and roll out of an open platform for the National Digital Health Ecosystem.

Out of Rs 86200.65 crore, Rs 83,000 crore have been allocated to the Department of Health and Family Welfare while Rs 3200 crore have been allocated to the Department of Health Research. In her Budget speech for the fiscal year beginning April 2022, Finance Minister Nirmala Sitharaman said on Tuesday that a National Tele Mental Health Programme will be launched to improve access to quality mental health counselling and care services.

She said the programme 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 technology support.

She also said that an open platform for 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,” she said.

The budget allocation for central sector schemes and projects has been increased from Rs 10,566 crore to Rs 15,163 crore.

Among these central sector schemes, the budget allocation for the Pardhan Mantri Swasthya Suraksha Yojana has been increased from Rs 70,000 crore to Rs 10,000 crore. The allocation for National Digital Health Mission – NHM has been increased from Rs 30 crore to Rs 200 crore.

For the National Health Mission, the budget allocation increased from Rs 36576 crore in 2021-22 to Rs 37,000 crore in 2022-23.

2-23.

Women and child development

The budget allocated to the Women and Child Development Ministry stood at Rs 25,172.28 crore in 2022-23, a slight increase of 3 per cent from Rs 24,435 crore that was given in 2021-22.

Presenting the Budget for 2022-23, Finance Minister Nirmala Sitharaman said recognising the importance of ‘Nari Shakti’ as the harbinger of India’s bright future and for women-led development during the ‘Amrit Kaal’, the government has comprehensively revamped the schemes of the Ministry of Women & Child Development.

Accordingly, Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were launched recently to provide integrated benefits to women and children.

The budget allocated for Saksham Anganwadi and POSHAN 2.0 (Umbrella ICDS – Anganwadi Services, Poshan Abhiyan, Scheme for Adolescent Girls) was Rs 20,263 crore, a small increase from Rs 20,105 crore in 2021-22.

The budget allocated for Mission Shakti (Mission for Protection and Empowerment for Women) was Rs 3,184 crore in 2022-23, increased from Rs 3,109 crore in 2021-22.

For Mission VATSALYA (Child Protection Services and Child Welfare Services), the budget allocated was Rs 1,472 crore, an increase from Rs 900 crore in 2021-22.

The budget allocation for autonomous bodies dropped from Rs 188 crore in 2021-22 to Rs 152 crore in 2022-23. These autonomous bodies include – Central Adoption Resource Agency (CARA), National Commission for Protection of Child Rights (NCPCR) and National Commission for Women.

The Finance Minister, in her budget speech, also announced that two lakh anganwadis will be upgraded under the Saksham Anganwadis scheme.

Defence

The defence budget was on Tuesday increased to Rs 5.25 lakh crore for 2022-23 from last year’s allocation of Rs 4.78 lakh crore with a major push on ensuring self-reliance in manufacturing of military platforms.

In the Union Budget presented in Parliament by Finance Minister Nirmala Sitharaman, a total of Rs 1,52,369 crore has been set aside for capital expenditure that includes purchasing new weapons, aircraft, warships and other military hardware.

For 2021-22, the budgetary allocation for capital outlay was Rs 1,35,060 crore but the revised estimate showed the expenditure at Rs 1,38,850 crore.

According to the budget documents, an allocation of Rs 2,33,000 crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments.

Separately, an amount of Rs 1,19,696 crore has been allocated for defence pensions while Rs 20,100 crore has been set aside for the Ministry of Defence (Civil).

Defence Minister Rajnath Singh described as an “excellent move” the proposal in the Union Budget to set aside 25 per cent of the defence R&D budget for start-ups and private entities in the financial year 2022-23.

Singh also welcomed Sitharaman’s announcement that 68 per cent of the defence capital procurement budget would be allocated towards procurement from domestic industry.

Income tax

Sitharaman did not tinker with the personal income tax rates in the Budget for 2022-23. The minister also did not raise the standard deduction, which was widely anticipated in view of elevated inflation levels and impact of the pandemic on the middle class. The standard deduction currently stands at Rs 50,000.

There was no change in income tax slabs in the personal income tax category in the Budget unveiled on Tuesday, February 1. The corporate tax rate too was kept at the same level. However, the concessional rate of 15% has been extended by one year for newly incorporated manufacturing units.

In Union Budget 2021-22, too, the Union government did not make any changes to the income tax system in place. In Union Budget 2020, the Union government had introduced reduced tax slabs with a clause that those opting for this will not be able to claim deductions. As per the tax regime, those earning upto Rs 5 lakh did not have to pay any income tax. Those earning between Rs 5 lakh and Rs 7.5 lakh were taxed at 10%, between Rs 7.5 lakh and Rs 10 lakh per year at 15%, between Rs 10 lakh and Rs 12.5 lakh at 20%, between Rs 12.5 lakh and Rs 15 lakh at 25%, and above that at 30%.

However, if individuals wanted to claim deductions, they could continue to do so under the old regime. The old regime dictated that there would be no tax upto Rs 2.5 lakh, 5% between Rs 2.5 lakh and Rs 5 lakh, 20% between Rs 5 lakh and Rs 10 lakh, and 30% for those earning above Rs 10 lakh. Under the proposal, which system would be beneficial to people, was determined on their earnings and the investments they made.

Direct tax collections

After a gap of three years, direct tax collections — which include corporate tax and personal income tax — have exceeded the Budget estimates for FY’22, indicating economic recovery.

As per the Budget document, the government has revised upwards the direct tax collection estimates for 2021-22 fiscal from Rs 11.08 lakh crore in Budget estimates (BE), to Rs 12.50 lakh crore in revised estimates (RE).

As per the RE, the government expects to collect Rs 6.35 lakh crore from corporate taxes and Rs 6.15 lakh crore from personal income taxes (PIT).

This compares with BE figure of Rs 5.47 lakh crore and Rs 5.61 lakh crore in corporate taxes and PIT, respectively.

The last time the government witnessed an increase in direct tax collection over Budget estimates was in 2017-18.

In 2017-18, the collection was revised upwards to Rs 10.05 lakh crore, from Rs 9.8 lakh crore in BE. The actual collection, however, worked out to be Rs 10.02 lakh crore.

In 2020-21, the direct tax collection in budget estimates was at Rs 13.19 lakh crore. The Covid-19 pandemic hit the country within a month of setting of this target, forcing the government to significantly revise downwards its collection target to Rs 9.05 lakh crore in RE. The actuals, however, worked out to be Rs 9.44 lakh crore.

Finance Minister Nirmala Sitharaman on Tuesday pegged the direct tax collection at Rs 14.20 lakh crore for FY2022-23. This includes Rs 7.20 lakh crore from corporate taxes and Rs 7 lakh crore from PIT.

Minority affairs

The Minority Affairs Ministry was allocated Rs 5020.50 crore in the 2022-23 Union Budget on Tuesday which is Rs 674.05 crore more than the revised figures of the previous fiscal.

In the budget presented for 2022-23 by Finance Minister Nirmala Sitharaman, it is proposed to give Rs 5020.50 crore to the Ministry of Minority Affairs.

The budget estimate for the Ministry of Minority Affairs in the financial year 2021-22 was Rs 4810.77 crore and later the revised allocation was Rs 4346.45 crore.

Of the proposed allocation to the ministry, Rs 1425 crore is for the pre-matric scholarship scheme and Rs 515 crore is for the post-matric scholarship.

Over 491 crore has been allocated for skill development and livelihood initiatives.

Minority Affairs Minister Mukhtar Abbas Naqvi hailed the 2022-23 Budget and said it advances the opportunity for self-reliant India amid the Covid pandemic.

Naqvi said amidst the global economic crisis, the Budget binds together trust and development with the thread of “self-reliant India”.

This Budget assures and advances the opportunity for self-reliant India amid the pandemic period, he said.

Railways

The Railway Ministry has been allocated Rs 140367.13 crore in the Union Budget on Tuesday, Rs 20,311 crore more than the revised figures of the previous fiscal.

Finance Minister Nirmala Sitharaman in her Budget speech for 2022-23 said that India will manufacture 400 new, energy-efficient Vande Bharat trains in the next three years. The rail sector will also develop “One Station One Product”, which will leverage local produce carried on the railways.

Railway Minister Ashwini Vaishnaw welcomed the announcement and said that the integration of posts and railways will bring better logistics solutions for people living in remote areas.

He also said that the Railways will introduce new products and services for small farmers and enterprises.

The Budget has also earmarked Rs 38686.59 crore for investment in PSUs, joint ventures and special purpose vehicles.

The allocation for the development of rolling stock, which will be instrumental in bringing in new modern coaches and technology to the national transporter, has been kept at Rs 7977 crore.

The Finance Minister has also allocated Rs 15710.44 crore to the Dedicated Freight Corridor (DFC), whose assets will be monetised by the Railways for operations and maintenance.

It has also allocated Rs 13335.47 crore for track renewal, Rs 2850 crore for gauge conversion and Rs 12108 crore for doubling. A sum of Rs 25243 crore has been allocated for new lines as well.

Rural roads

Allocation to the rural roads construction scheme PMGSY raised by 36 per cent to Rs 19,000 crore for the fiscal year 2022-23 from revenue estimate last year, whereas the total allocation to all centrally sponsored schemes under the rural development ministry dipped around 11 per cent in the budget presented on Tuesday.

The total allocation to centrally sponsored schemes under the Rural Development Ministry including MGNREGA, declined to Rs 1,35,944.29 crore for the year 2022-23 from Rs 1,53,558.07 crore, the revised estimate of the financial year 2021-22.

The allocation to Pradhan Mantri Gram Sadak Yojana (PMGSY), the rural roads construction scheme, in the budget for the year 2022-23 was raised by a whopping 36 per cent to Rs 19,000 crore, from Rs 14,000 crore, the revised estimate, which is actually an expected expenditure to be incurred, for the year 2021-22.

Special focus in the PMGSY has been given to construction of roads in left-wing extremism affected areas and north-eastern states, as the allocation to both these components of the rural roads construction schemes was substantially raised.

The allocation to another flagship scheme, Pradhan Mantri Awas Yojana (PMAY) was also slightly raised by 2.5 per cent to Rs 20,000 crore in the budget as compared to Rs 19,500 crore in 2021-22.

Allocations to various other schemes under the centrally sponsored schemes such as Indira Gandhi National Old Age Pension Scheme and Annapurna Scheme were also raised in the budget.

Metro projects

The Centre has allocated Rs 19,130 crore in the Union Budget 2022-23 for various metro projects in the country.

In November last year, Union minister Hardeep Singh Puri had said that 723 km of metro network was operational in 18 cities, and an additional over 1,000 km of network under construction in various cities.

Separately, six new proposals were also being evaluated, he had said.

Meanwhile, Delhi Metro officials said in recent years, the Union Ministry of Finance is providing Budget for all metro projects in India, instead of DMRC alone. Accordingly, in Budget 2022-23, the allocation made for all metro projects in India is Rs 19,130 cr.

The budgetary allocation in the last fiscal for metro projects was Rs 18,978 cr.

The DMRC network’s current span is nearly 392 km with 286 stations (including the Noida–Greater Noida Metro Corridor and Rapid Metro, Gurgaon).

Besides, metro services are operational in many other cities, including Lucknow, Mumbai, Banglore, Kochi, Hyderabad and recently operationalised in Kanpur.

An outlay of Rs 4,710 cr has been made in the Union Budget for projects of the National Capital Region Transport Corporation (NCRTC).

“In a major boost to regional connectivity in NCR, Government of India has allocated Rs 4,710 cr to country’s first Regional Rapid Transit System (RRTS) project in the Union Budget presented today in Parliament,” NCRTC said in a statement.

Construction work on the entire 82 km-long Delhi-Ghaziabad Meerut RRTS corridor is in full swing. The corridor will have 25 stations, including two depots and one stabling yard, officials said.

So far, 16 km viaduct of priority section, 1200 piers, and 9,900 piles have been concreted. Foundation work has been completed for 56 km of the corridor, the statement said.

The 17 km priority section between Sahibabad to Duhai is scheduled to be operational by March 2023 and trial runs are expected to begin this year. The complete corridor will be opened to the public by 2025, officials said.

“RRTS is a strategic investment of the governments to transform the mobility in NCR in line with the GatiShakti masterplan. The continued allocation to RRTS reinforces government’s focus on infrastructure expenditure to catalyse the economic revival after the impact of pandemic,” Vinay Kumar Singh, MD, NCRTC, was quoted as saying in the statement.

Solar

The Finance Minister proposed enhancing the funding under the Performance Linked Incentive (PLI) scheme for domestic solar cells and module manufacturing to Rs 24,000 crore from the existing Rs 4,500 crore to make India an exporting nation. “For facilitating domestic manufacturing for the ambitious goal of 280 GW (GigaWatt) of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for PLI scheme for manufacturing of high efficiency (solar) modules with priority of fully integrate manufacturing units for polysilicon to solar PV modules will be made,” she said in her Budget speech in the Lok Sabha.

Sitharaman said that the risks of climate change are the strongest negative externalities that affect India and other countries. She repeated the Prime Minister’s quote during the COP26 summit in Glasgow last November, where he had said, “What is needed today is mindful and deliberated utilisation instead of mindless destructive consumption.”

“The low carbon development strategy as enunciated in the ‘panchamrit’ that he (PM) announced is an important reflection of our government’s strong commitment towards sustainable development,” Nirmala Sitharaman said on Tuesday.

This strategy opens up huge employment opportunities and will take the country on a sustainable development path. This budget proposes several near term and long term actions accordingly, she added.

She also said that the data centre and energy storage system will be given infrastructure status to provide easy financing to the sector. Sitharaman informed that the private equity and venture capital investors invested Rs 5.5 lakh crore in startups. She further said an expert committee will be set up to suggest measures to help attract more investments. Measures will also be taken to step up private capital in the infrastructure sector, she said.

River-linking

The implementation of Ken-Betwa river linking at an estimated cost of Rs 44,605 crore will be taken up, Finance Minister Nirmala Sitharaman said on Tuesday.

She said the draft DPRs of five river links, namely Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar, and Pennar-Cauvery have been finalized.

The Ken-Betwa Link Project is aimed at providing irrigation benefits to 9.08 lakh hectare of farmers’ lands, drinking water supply for 62 lakh people, 103 MW of Hydro, and 27 MW of solar power, Sitharaman said while presenting the Budget for 2022-23.

“Allocations of Rs 4,300 crore in RE 2021-22 and Rs 1,400 crore in 2022-23 have been made for this project,” she said.

“Once a consensus is reached among the beneficiary states, the Centre will provide support for implementation,” she said.

Cryptocurrency

Giving clarity on taxation of cryptocurrencies and other virtual assets, Finance Minister Nirmala Sitharaman on Tuesday proposed a 30 per cent tax on income from transactions in such assets. Also, to bring such assets under the tax net, she proposed a 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold. Gifts in crypto and digital assets will also be taxed, she said.

The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament. Meeting demands from large sections of industry, she said the RBI will launch a ‘Digital Rupee’ based on blockchain technology in 2022-23. Experts said the 30 per cent tax levied on income arising from the sale of cryptocurrency is similar to the tax rate on winnings from lottery, game shows, puzzles etc.

Digital currency and assets like NFTs (non-fungible tokens) have gained traction globally over the last couple of years. Trading in these assets has increased manifold with cryptocurrency exchanges being launched. However, India did not have a clear policy on either regulating or taxing such asset classes. NFTs are unique digital assets with verified ownership rights and the details are stored on a blockchain.

E-passports

Sitharaman said that e-passports will be rolled out from next year onwards for the convenience of the citizens. She added that these passports will have embedded electronic chips and futuristic technology.

At present, passports are issued to the public in printed booklets. The chips in the e-passports will contain security-related data encoded on them.

Reports suggest that the e-passports will use radio-frequency identification and biometrics. They will also be in line with the international travel rules.

The personal particulars of the individual applying for an e-passport would be digitally signed and stored in the electronic chip embedded in it. The e-passport is also expected to help smooth passage through immigration posts globally.

Paperless budget

The Finance Minister on Tuesday again took a digital tablet wrapped in a traditional bahi-khata style pouch as she headed for Parliament to present the Union Budget 2022-23 in a paperless format just like the last year.

She posed for the traditional ‘briefcase’ picture outside her office along with her team of officials before heading to meet the President. She, however, was holding a tablet instead of a briefcase to present the Budget in a digital format.

“#AatmanirbharBharatKaBudget | From ‘Bahi Khata’ to Made in India’ Tablet Finance Minister @nsitharaman carrying the Budget in the #paperless format in a tablet kept inside a red cover with National Emblem embossed on it instead of the briefcase or ‘Bahi Khata’,” Digital India tweeted.

With a tablet carefully kept inside a red coloured cover with a golden coloured national emblem embossed on it instead of the briefcase, she went straight to Parliament after meeting the President at Rashtrapati Bhawan.

Sitharaman, India’s first full-time woman Finance Minister, had in July 2019 ditched the colonial legacy of a Budget Briefcase for the traditional Bahi-Khata to carry Union Budget Papers. She used the same in the following year, and in a pandemic-hit 2021, she swapped traditional papers with a digital tablet for carrying her speech as well as other Budget documents.

Her Budget for the fiscal year beginning April 2022 (FY2022-23) is the Modi government’s 10th straight Budget since 2014 (including one interim Budget presented ahead of general elections in 2019).

The “budget case” tradition started in the 18th century when the Chancellor of the Exchequer or Britain’s budget chief was asked to ‘open the budget’ while presenting his annual statement.

In 1860, the then British budget chief William E Gladstone carried his papers in a red suitcase with the Queen’s monogram in gold. Budget briefcase came into being because Gladstone’s speeches were extraordinarily long, and he needed a briefcase to carry his speech papers.

However, in India, different finance ministers carried different briefcases with colours of red, black, tan or brown.

Markets

The Sensex soared 848 points while the Nifty reclaimed the 17,500-mark on Tuesday after Finance Minister Nirmala Sitharaman unveiled a bigger Rs 39.45 lakh crore Budget, with higher spending on infrastructure to spur economic recovery and create jobs.

Metal, realty and cement stocks saw robust buying, while selling in auto and telecom counters capped the gains.

After a strong start, the BSE Sensex succumbed to a sudden bout of selling following the Budget presentation, but staged an immediate rebound to end 848.40 points or 1.46 per cent higher at 58,862.57, marking its second straight session of gains.

On similar lines, the broader NSE Nifty surged 237 points or 1.37 per cent to end at 17,576.85.

Tata Steel hogged the limelight in the Sensex pack, zooming 7.57 per cent, followed by Sun Pharma, IndusInd Bank, L&T, UltraCement, ITC, Titan and HCL Tech.

In contrast, M&M, PowerGrid, SBI, Bharti Airtel, NTPC, Maruti and Reliance closed in the red, shedding up to 1.67 per cent.

“Supportive measures were needed for rural, agriculture, low taxpayers and for sectors impacted by the pandemic. High capex, fiscal deficit and borrowing plans in the background of a high inflation, commodity and oil prices and rising interest rates will be challenges in the short to medium-term,” said Vinod Nair, Head of Research at Geojit Financial Services.

Ashishkumar Chauhan, MD and CEO, BSE, said the Budget was very balanced and continued the incremental growth-oriented approach of the last budget.

“In this budget, the finance minister provided a springboard for an investment cycle with the highest ever share of capex, focus on the development of national manufacturing capabilities and clean energy, tax rationalisation with no new taxes while maintaining its continuous growth focus on Aatmanirbhar Bharat,” he added.

(With PTI inputs)

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