Higher spending to spur growth

The Union Budget has proposed Rs 2 lakh crore increase in government capital expenditure and extended Rs 1 lakh crore interest-free loan to states in order to target growth of 8.2 per cent in 2022-23. With anticipated growth of 9.2 per cent in the current fiscal, the economy would have recovered 101.3 per cent of the pre-pandemic output of 2019-20 by March 31, 2022.

There was little room for concession as the fiscal deficit for 2021-22 slipped by 0.1 per cent to 6.9 per cent and is projected at 6.4 per cent in 2022-23. Moreover, interest payment and servicing of debt rose by Rs 1.26 lakh crore to nearly Rs 9.5 lakh crore in 2022-23. While sops for the middle class were few, the big picture from the Budget was the increase in outlay for capital expenditure by 35.4 per cent to Rs 7.5 lakh crore in 2022-23 with Sitharaman claiming that the effective capital expenditure will be Rs 10.68 lakh crore, or 4.1 per cent of the GDP. As joblessness became a concern and privatisation its subtext, the target from disinvestment for 2022-23 is a scaled down Rs 65,000 crore and instead of the Rs 1.75 lakh crore budgeted for 2021-22 , the realisation was Rs 78,000 crore.

A hike of Rs 1 lakh crore is for extending National Highways by 25,000 km, an extra Rs 20,000 crore in capital expenditure for the Railways and Rs 1.5 lakh crore for the defence sector. And, a Gati Shakti masterplan will guide big private investment in seven sectors of the Rs 100 lakh crore National Infrastructure Pipeline. These are roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure.

Hoping to evoke a matching response from the private sector to spur job creation, the government extended the production linked incentive scheme (PLI) to the manufacturing of solar modules. The Budget also extended for one year the concessional corporate tax of 15 per cent on newly incorporated manufacturing companies.

Looking into the difficulties faced by the industry, the Budget announced the scrapping of anti-dumping duty on certain steel products from China.

All talk of 100 smart cities in the earlier Budgets was replaced by the announcement of a high-level panel to be set up for urban planning, new and modern building bylaws and increased promotion of public transport in urban areas. Similarly, there was no mention of doubling farmers’ income. Instead, the Budget spoke of “a wave of technology in agri sector’’ such as kisan drones, natural farming along the Ganga river corridor and six projects on river interlinking, including the Rs 44,605 Ken-Betwa plan.

In the social sector, Rs 60,000 crore will be allocated for access to tap water to 3.8 crore households and 80 lakh houses will be completed in 2022-23 under PM Awas Yojana. The allotment for MGNREGA remained nearly equal to that of last year’s Rs 73,000 crore despite revised estimates for the current year coming at Rs 98,000.

• Capital expenditure up by 35.4%, from Rs5.54 L cr to Rs7.50 L cr
• No change in personal income tax
• RBI to introduce digital rupee
• 30% tax on digital virtual assets
• e-Passports to be rolled out

Proposals at a glance

39.45 lakh cr: Total expenditure outlay

Rs11.6 lakh cr: Govt to borrow from market

Infra & manufacturing

National highway network to be expanded by 25,000 km

100 PM Gati Shakti terminals to be set up in next three years

Housing & urban planning

Rs48,000 crore allotted for Prime Minister Awas Yojana

In 2022-23, 80 lakh houses will be completed under the Yojana

Taxation & NPS account

Updated Income Tax returns can be filed within two years

Surcharge on long-term capital gains capped at 15%

Tax deduction limit increased to 14% on employers’ contribution to NPS account of state government employees

Agriculture sector

2022-23 has been announced International Year of Millets

Telecommunication

Spectrum auction in 2022 for rollout of 5G network

Contract for optical fibre in villages under BharatNet, PPP mode

COSTLIER: Umbrellas I Imitation jewellery I X-ray machines I Parts of electronic toys I Headphones I Imported items I Solar cells

Cheaper: Apparel I PCs/laptops I Cut & polished diamonds I Methyl alcohol I Cocoa beans I Cellphone camera lens I Phone chargers

Ministry-wise allocations (Rs. crore)

• Defence: 5,25,166.15
• Education: 1,04,277.72
• Railways: 1,40,367.13
• Health: 82,600
• Road Transport and Highways: 1,99,107.71
• Agriculture and Farmers’ Welfare: 1,32,513.62
• Communications: 1,05,406.82
• Chemicals and Fertilisers: 1,07,715.38
• Rural Development: 1,38,203.63
• Home Affairs: 1,85,776.55
• Consumer Affairs: 2,17,684.46

Courtesy: The Tribune India: 1st Feb , 2022