The Finance Minister Nirmala Sitharaman by parroting the famous Mahabharata’s Shanti parva sloka meaning “The King must make arrangements for the welfare of the populace, by the way of abandoning any laxity and governing the state in line with Dharma, along with collecting taxes which are in consonance with the Dharma(meaning code of conduct)” presented budget 2022-23.
She said India’s GDP growth will be highest amongst all economies. An economic growth of 9.2% in FY 2022.The fiscal deficit of the government for 2022-23 is estimated to be Rs 16,61,196 crore. The total expenditure in 2022-23 is estimated at Rs 39.45 lakh crore, while the total receipts other than borrowings are estimated at Rs 22.84 lakh crore. Total revenue receipts other than borrowings are estimated at Rs.22.84 Lakh crore in FY2023. Soaring inflation levels continue to be a cause of concern for economy. Retail inflation is 5.59% and Wholesale inflation is 13.56%. A robust accretion to foreign exchange reserves in 2021-2022 , has improved the coverage of short-term debt. $634.287billion.
She announced that a new portal will be launched that encourages a digital ecosystem for skilling, upskilling, reskilling, cross skilling and livelihood, “DESH-stack e-portal” to place India as a global talent hub. It provides API(Application program Interface)-based trusted skill credentials, payments and discovery that they can use to find relevant jobs and entrepreneurial opportunities,” A Digital University would be established to provide access to students across the country for world-class quality universal education.
Analysts said that this budget will boost Digital India, economy & create job opportunities.
Electric Vehicle Battery Makers
Plans to expand India’s transport technology, battery makers will gain from a new swapping policy for electric vehicles announced by Sitharaman.
Transport and Infrastructure Players
Plans for investments in remote roads, mass transit in cities and 400 new “Vande Bharat” trains in three years will benefit key infrastructure players.
Plans to allocate 600 billion rupee for piped water to 38 million homes and spending on logistics which will benefit India’s metals producers.
Plans to allocate production-linked incentives worth 195 billion rupees for solar modules to boost local manufacturing will turn the focus on growth at leading panel manufacturers.
Cement and Construction
Plans to build more homes for low-income earners across cities will mean more contracts for cement and construction majors.
Telecom and Data Center
Plans to launch 5G auctions in 2022 such that the telecom sector will get boosted and the classification of data storage is considered as infrastructure spending.
Digital Financeservice providers are going to gain in India.
Plans to fund 68% of the sector capex for local companies manufacturing defense equipment in the annual budget.
Plan to keep pace with the global move towards virtual financial instruments by starting digital currency.
Plans to impose a tax of 30% on profits from digital asset transactions.
Coal and Thermal Power Plants
Plans for solar power incentives and to use biomass pellets in thermal power plants in a bid to rely on coal.
Stainless Steel Producers
Plans to remove some anti-dumping and countervailing duties on stainless steel, coated steel flat products, bars of alloy steel and high-speed steel, given the rise in metal prices.
May be car manufacturers need to continue to be hot and cold under a global semiconductor crunch.
Sitharaman said a Raising and Accelerating MSME Performance (RAMP) program will be rolled out with a Rs 6,000 crore outlay spread over 5 years for MSMEs.
The health sector has been allocated Rs 86,200.65 crore
Agriculture and Food processing
The budget allocation for the ministry of agriculture and farmers’ welfare has been raised marginally by 4.5% to Rs 1,32,513 crore.
Debt mutual fund managers worry that the higher-than-expected fiscal deficit and higher borrowing might put pressure on the bond market. Higher borrowing requirements of the center and state governments will put pressure on the bond markets and it may drain down the returns from debt mutual funds in the near future.
Advisors also tell the investors to reduce expectations as they can be risky this year but not to exit. Instead of waiting for increased rates,it is better to put some of their money in Schemes and Fixed Income investors should stick to categories like liquid fund or other short duration fund categories
No Changes in
There were no changes made to the I-T slab and announced that employees of the state governments will be able to claim a tax benefit of 14% on the NPS contribution made by their employer, i.e., state government from FY 2022-23 onwards.
Ministry wise Budget Allocation in 2022