Budget 2022: Modi Government – Visioning An Inclusive Future

Finance Minister Ms Nirmala Sitharaman has presented the Union Budget 2022-23 today. Budget is commendable as it’s an endeavour to keep the focus on recovery and growth. Budget provide for Stable tax regime make provision for various policies and programs for boosting. Like previous budget under Modi Government, it is a growth focussed Budget. Expenditure is focused on utilising available fiscal space and using higher tax buoyancy for making additional spend.  It provides for deep focus on capex and will create a multiplier impact on the economy.

Ms Sitharaman has formulated the budget keeping in robust economic growth forecast of 9.2%. India is celebrating Azadi ka Amrit Mahotsav and budget presents the vision of next Twenty-Five years i.e., India@100. Government intends to Promote digital economy & fintech, development led by technology, transitioning towards cleaner energy and combating climate action. Strengthening poor’s for tapping the opportunities, creating eco-system for middle class and leading the financial inclusion.

Government has laid down the priorities in the area of PM GatiShakti. This will involve creating a world-class infrastructure and creating synergy with different modes of transport involving people and Goods. Under the program Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure have been identified as seven engines of growth. This will involve expansion of the National Highways network by 25,000 and raising Rs 20000 Crores through innovative financing.

Budget provides for the Promotion of Animation, Visual Effects, Gaming and Comic (AVGC) sector. It’s a welcome step as Gaming is a futuristic Industry and many large Companies are emerging Globally. Support from the Government will help in increasing the size of the industry and gaining the size, scale as well as development of World Class gaming content from India. Gaming Industry may also emerge as a leading employment generator as it consumes animation and visual effects talent in addition to engineering and design.

Announcement in the Union Budget related to manufacturing Plan for wearables and hearables are a significant step in making India a manufacturing hub. Budgetary announcement provided for the big push for EVs via Special mobility zones, Battery Swapping Policy and interoperability standards.  Focus on Drone Shakti and 5G are a welcome move. Government has taken the step to Expand the scope of GIFT City. This will help India in moving ahead on the path of becoming a global business hub in various areas.

Extension of sunset clause for tax holiday benefits for start-up exemption has been extended, Eligible start-ups incorporated on or before 1 April 2023 will be able to claim the benefit of tax holiday exemptions under Section 80-IAC of the Act. Central Government has also allocated Rs. 1 Lakh Crores for grant to states to support their capital expenditure.

There will be a greater emphasis on capital expenditure which is expected to be increased by 35. Despite higher allocation to capital expenditure, the fiscal deficit is likely to go down in next year. Central Bank will be issuing CBDC using the power of block chain technology. Income arising from virtual digital assets will be taxed at 30% and 1% TDS on transfer of such assets should be levied.

Budget provides for linking of water projects, promoting food processing, extension of Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 and taking total cover to Rs 5 Lakhs crore, promoting start-ups for building applications for Drone-As-A-Service (DrAAS), creating Digital University, promoting National Tele Mental Health Programme, allocating Rs 48000 Crore under Housing for all schemes.

Government is taking significant steps for promoting Digital Banking and Digital Payments by proposing to set up 75 Digital Banking Units and further promoting adoption of digital payments.

In order to promote Ease of Doing Business, over 25,000 compliances have been reduced and approx. 1486 Union laws have been repealed. Government is committed to further reduce the archaic laws and promote trust-based governance.  Modi Government has a vision to make India a $5 Trillion economy. Schemes related to  AtmaNirbharta in Defence, AVGC Promotion Task Force, Promotion of 5G rollout, Artificial Intelligence, Geospatial Systems and Drones, promotion of Space Economy, setting up of Data Centres and Energy Storage Systems are welcome steps, setting the tone for a futuristic India which is also inclusive in nature.

Bureau Galactik Views

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