On Tuesday, the Finance Minister Nirmala Sitharaman unveiled budget for fiscal year 2022-23 for boost up growth amid Omicron disruption and rising the inflation in Indian economy. Budget 2022-23 is simply balanced fiscal retreat aimed at supporting the expected economic recovery. Policymakers are focused on driving capital expenditure to drive growth with public private partnership [PPP] model.

Although, the common man and especially middle class could be disappointed with absence of any tax reliefs, Indian economy is expecting a higher fiscal deficit of 6.4% of Gross Domestic Product for Financial year 2023. Taxpayers are disappointed with the unchanged income tax slabs. At the same time Government of India also discouraging the investment in crypto currency and levied 30% tax on transfer of digital assets. Besides, corporate surcharge has been reduced by 5% earlier it was 12% now it is provisional 7%.

Notable announcements made by FM includes sops on NPS, start-ups, extended Emergency Credit Line Guarantee scheme [ECLGS] to and filing of revised ITR window.  In a major push for digital currency, FM stated that digital Rupee will be issued with the help of ‘Blockchain Technology’ by the Reserve Bank of India starting 2022-23.  Being an Economist, I admire that it will surely give a big boost to the economy in the long run.

The Budget-2022-23 estimates the effective capital expenditure of the government of India at INR 10.68 Lakh crore in 2022-23, making up for about 4.1% of the Gross Domestic Product. However, since 2017 the inception of GST, the collection of Goods and Services Taxes in the month of January-2022 is the highest level with record INR 1,40,986 crore. 

Union Budget 2022-23 has laid down the base for expected economic growth for coming next 25 years with a premise that Indian economy will bounce back from the pandemic losses. While elevated market borrowings in the union Budget 2022-23 are likely to pressurise bond yields, inclusion of ‘Green bonds’ in the borrowing plan is the need of hour as innovative step of the policymakers. Key has been infrastructure spending, speeding up digital technology, education, start-ups, rural Bharat and health sector of the economy. Government of India is also focusing on the expansions under the PM-Gati Shakti Project and the National Highways to be expanded by 25,000 Km in the next fiscal. Better connectivity will aid in ramping up economic growth in long run.

Budget had following aspects for an inclusive rural development-

• 5% annual collection of service obligation fund will be allocated for rural telecom and broadband development
• Contracts for laying optical fibres will be awarded under Bharatnet through PPP. The scheme will be completed in 2025 and Spectrum auction will be conducted in 2022 for 5G rollout, FM said.
• AVGC taskforce to be set up- Animation, Visual Effects, Gaming and Comic offers immense potential to employ Youth.
• Post Office to come under Core Banking Systems- 100% of 1.5 lakh Post Offices will come on Core banking systems. "This will be helpful for farmers and senior citizens in rural areas,". This step will surely promote the fintech and digital banking in Rural-Bharat and reduce the Ru-urban gaps.
• Introduction of Vibrant villages programme for border villages with a focus on increasing road connectivity and provide support for livelihood generation.
• For empowering women in rural areas, new generation Bharat Saksham Anganwadis by clean energy are conceptualised. Government of India announced that 2 lakh anganwadis will be upgraded for empowering Rural-Bharat.
• “Creation of unified logistics platform and developments of 100 new cargo terminals in the next three years are significant steps in improving the supply chain eco system in the country. The Government has reiterated its commitment towards Housing for All by allocating ₹48000 crore towards this scheme.
• Procurement record is set to 1208 lakh metric tonnes for wheat and paddy from 163 lakh farmers. Deployment of drone shakti Use of Drones for crop protection. Promotion of chemical-free, organic farming
• Creation of an open platform for the National Digital Health Ecosystem, for this, the government has announced a national telemental health programme. This would include a network of 23 telemental health excellence centres, with Nimhans serving as the nodal centre and IIIT Bangalore providing technical support.

In nutshell, the budget 2022-23 is simple fiscal consolidation for long term plan, and the populist ‘election budget’ as expected. Budget gave a big push for Capex and sops for MSMEs auguring well for the mission of “Aatma-Nirbhar Bharat”.  

Image source: News18