Introduction

From the past few days, there has been a lot of buzz going around the budget and the announcements related to it. People from distinctive industries have shared their critical insights on considerations pertaining to different sectors.

This article will impart you with knowledgeable content on the Union Budget 2022 and some challenges which revolve around the budget.

Let’s first understand what is Union Budget?

Union Budget 2022

According to Article 112 of the Indian Constitution, the Union Budget, also known as the annual financial statement, is a declaration of the government’s expected earnings and expenditures for that year.

 

Key Highlight of the Budget 2022

• This year’s budget highlights include: PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Investment Financing.
• The reaction to productivity-linked incentive programs in 14 industries has been overwhelmingly positive, with investment intentions totaling Rs 30 lakh crore.
• The revival of the economy is aided by governmental investment and capital spending. This budget will boost economic development.
• In 2022-23, the state will be permitted to run a budget deficit of up to 4% of GDP. Expenditure, deficit, and other crucial figures.
• By 2025/26, a budget deficit of 4.5 percent of GDP is proposed.
• In 2022/23, the budget deficit is expected to be 6.4 percent of GDP.
• Fiscal deficit for 2021-22 revised to 6.9% of GDP 50-year interest-free loans over and beyond standard borrowing authorised for states

 

Taxes

• The government promises a steady and predictable tax system.
• The government will allow a one-time chance to amend omissions in previously filed ITRs, with new returns due within two years.
• Any tax or surcharge on income is not deductible as a business expense.
• One percent TDS on virtual asset transfers over a certain level, and gifts will be charged.
• Long-term capital gains surcharges are restricted at 15%.
• The government would tax digital asset transactions at a rate of 30%.
• Except for acquisition costs, no deductions are allowed for calculating income.
• Losses cannot be deducted from other sources of income.
• Cryptocurrency gifts will be taxed at the receiver’s end.
• A new provision allowing taxpayers to file an amended return has been enacted

 

Industry’s Duties

• Import duties on some compounds are being (or will be) reduced.
• For MSMEs, the duty-free status on steel scrap would be extended for another year.
• Customs duty on stainless steel, flat items, and high steel bars will be abolished.
• Unblended petrol would be subject to an extra charge of Rs 2/litre starting in October 2022.
• Cut and polished diamonds and gemstones will have a 5% import fee, but sawn diamonds will have no duty.
• For MSMEs, the duty-free status on steel scrap would be extended for another year.
• Customs duty on stainless steel, flat items, and high steel bars will be abolished.
• Unblended petrol would be subject to an extra charge of Rs 2/litre starting in October 2022.

 

Jobs

• ECLGS has been extended till March 2023, with 60 lakh employment expected in the following five years.
• Efforts by the federal and state governments that result in job creation and entrepreneurship possibilities
• To be launched is a digital ecosystem for skilling and livelihood.
• This programme will use online training to educate, reskill, and upskill citizens.
• To locate appropriate jobs and possibilities, API-based skill credentials and payment layers are used.

 

Infrastructure and manufacturing

• To boost digital infrastructure, a Desh stack e-portal will be developed.
• Air India’s strategic ownership transfer is now complete.
• In FY23, four multi-modal national park contracts will be granted. The Gatishakti highway concept will be developed in the next fiscal year.
• 10 p.m. Terminals for Gati Shakti will be built in the next three years.
• Over the next few years, focus on public investment to modernise infrastructure.

 

Steps in the direction of digital currency

• Starting in 2022-23, a blockchain-based digital rupee will be introduced.
• To introduce a taxation structure for virtual digital assets
• Losses resulting from the sale of virtual digital assets cannot be mitigated by other sources of revenue.
• Virtual digital asset income will be taxed at a rate of 30%.

 

Housing and city planning

• PM Awas Yojana has been allocated Rs 48, 000 crore.
• In 2022-23, 80 lakh dwellings would be constructed for PM Awas Yojana beneficiaries; 60,000 houses will be designated as PM Awas Yojana beneficiaries in rural and urban locations.
• 60,000 crore has been set aside to provide tap water to 3.8 crore homes.
• 80 lakh families would be identified for the affordable housing plan in 2022-2023.

 

Agriculture

• The Government will pay Rs 2.37 lakh crore for wheat and paddy purchase under MSP operations in 2022-23, which has been designated as the International Year of Millets.
• Small farmers and MSMEs will benefit from new railway goods.
• To reduce imports, a streamlined plan to improve domestic oilseed production will be implemented.
• Drones for crop evaluation, land records, and pesticide spraying are projected to fuel a wave of technology, according to Kisan.
• To enhance agricultural output and revenue, the government will encourage chemical-free natural farming across the country.
• NABARD will assist the creation of a co-investment fund to finance agricultural and rural sector startups that are related to the farm product value chain.

 

Electric Vehicles 

• A strategy for battery switching will be created to allow EV charging stations for autos.
• The private sector will be encouraged to develop sustainable and creative business models for battery and energy as a service, hence increasing EV ecosystem efficiency.

 

Education and training

• States should be encouraged to alter agricultural university curricula to satisfy the demands of natural, low-cost, and organic farming, as well as modern-day agriculture.
• PM eVIDYA’s “one class, one TV channel” initiative will be expanded from 12 to 200 TV channels.
• As a result, all states will be able to provide extra education in regional languages for students in grades 1 through 12.
• 1-Class-1-TV Channel will be adopted to give children with supplemental education in order to compensate for the loss of formal education due to Covid.
• To introduce the National Skill Qualification Framework (NSQF) in order to meet the changing demands of the sector.

 

Finance and social inclusion

• In 2022-23, states would receive a financial support of Rs 1 lakh crore. to act as a catalyst for investment
• RBI proposes to launch the Digital Rupee in 2022-23, based on blockchain technology.
• Efforts will be made to increase private capital in the infrastructure sector.
• By 2023, the digital rupee will be in use.
• All 1.5 lakh post offices would be connected to the main banking system, allowing for financial inclusion and account access via net banking, mobile banking, and ATMs, as well as online cash transfers between post office and bank accounts.
• This would be especially beneficial to farmers and older residents in rural regions, since it will allow for interoperability and financial inclusion.

 

Telecom

• In 2022, a telecom spectrum auction will be held for the introduction of 5G. The 5G ecosystem will be established as part of the PLI program to provide inexpensive internet and mobile connectivity in rural and distant locations.
• R&D and technological upgrades will get 5% of the USO Fund.
• Contracts for installing optical fiber in villages will be given in 2022-23 under the BharatNet PPP initiative.

 

Women and Children

• Three programmes were created to ensure integrated development for women and children, recognising the relevance of ‘Nari Shakti.’
• To improve child health, 2 lakh Anganwadis would be updated.

 

Ease of doing business and of living

• To make it easy for businesses, 75,000 compliances have been deleted and 1,486 union statutes have been repealed.
• India will launch EODB 2.0, the next phase of the Ease of Doing Business initiative.

 

Railways and Transportation

• Railways, for example, have 400 next generation locomotives. In the next three years, Vande Bharat trains will be produced.
• A total of 2,000 kilometers of rail network will be converted to indigenous technology. KAWACH for increased capacity and safety
• The Railway Ministry would be given Rs 140367.13 crore, which is Rs 20,311 crore higher than the previous fiscal’s revised statistics.
• In 2022-23, the national highway network will be increased by 25,000 kilometers.

 

Climate

• Climate and Net Zero Energy transitions, as well as climate action, should be a top priority for governments. Climate change risks are the world’s most severe externalities.
• The funds will be utilised for projects that will assist lower the economy’s carbon intensity.
• Green sovereign bonds will be issued to support green infrastructure in FY23, as part of the government’s borrowing agenda.
• Proceeds will be used to fund public-sector initiatives.
• 4 pilot projects are in the works

 

Other Measures

• To be established is a task force on animation, visual effects, gaming, and comic book promotion.
• Villages on northern border of India will be covered under a new dynamic village initiative to boost development.
• Rs 3062.60 crore allocated under sports budget for financial year 2022-23, an increase of Rs 305.58 crore over last year.
• PM Development Initiative for the North East will be introduced as a new programme.

 

Key Takeaways

May it be MSME or startups; the budget has been a mix for every sector. Where on one side, it has perks for unicorns, the middle men is still waiting for its turn. However, you don’t have to worry in either case, because we have your back in every situation, at LegalPillers keep yourself ready to experience the best services. We are a team of CA’s and CS’s who are dedicated enough to fulfill your commitments related to online company registration and online company registration in India. Visit our website by clicking on this link https://www.legalpillers.com/