The Union Finance Minister has tabled the Union Budget 2022-23 in Parliament today.

What is Union Budget in India?

The Union Budget also referred to as the Annual Financial Statement in Article 112 of the Constitution of India is the annual budget of India.
The Government presents it on the first day of February so that it could be materialized before the beginning of new financial year in April.
Until 2016 it was presented on the last working day of February by the Finance Minister in Parliament.
The budget, which is presented by means of the Finance bill and the Appropriation Bill, has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India’s financial year.

Components of the Budget

There are three major components — expenditure, receipts and deficit indicators.

The budget is generally classified into Revenue Budget and Capital Budget.

[A] Revenue Budget

It includes the government’s revenue receipts and expenditure.
There are two kinds of revenue receipts – tax and non-tax revenue.
Revenue expenditure is the expenditure incurred on day to day functioning of the government and on various services offered to citizens.
If revenue expenditure exceeds revenue receipts, the government incurs a revenue deficit.

[B] Capital Budget

It includes capital receipts and payments of the government.
Loans from public, foreign governments and RBI form a major part of the government’s capital receipts.
Capital expenditure is the expenditure on development of machinery, equipment, building, health facilities, education etc.
Fiscal deficit is incurred when the government’s total expenditure exceeds its total revenue.

What are fiscal rules and how do they affect policy?

Fiscal rules provide specific policy targets on the basis of which fiscal policy is formed.
In India’s case, its present fiscal rule is guided by the recommendations of the N.K. Singh Committee Report.
Allowing for some deviations under exceptional times, it has three policy targets — maintaining a specific level of debt-GDP ratio (stock target), fiscal deficit-GDP ratio (flow target) and revenue deficit-GDP ratio (composition target).

Highlights of the Union Budget 2022-23

PART A

Entering Amrit Kaal, the 25 year long lead up to India @100, the budget provides impetus for growth along four priorities:

PM Gati-Shakti
Inclusive Development
Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action
Financing of investments

(1) PM GatiShakti

The seven engines that drive PM Gati-Shakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure:

National Highways Network to be expanded by 25000 Km in 2022-23
One Station One Product concept to help local businesses & supply chains
2000 Km of railway network to be brought under Kavach, the indigenous world class technology and capacity augmentation in 2022-23
400 new generation Vande Bharat Trains to be manufactured during the next three years
National Ropeways Development Program, Parvatmala to be taken up on PPP mode

(2) Inclusive Development

Agriculture

Grains Procurement
NABARD Loans: To facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
Kisan Drones: for crop assessment, digitization of land records, spraying of insecticides and nutrients.
Ken Betwa project: 1400 crore outlay for implementation of the Ken – Betwa link project.

MSME Sector

MSME: ECLGS to be extended up to March 2023; Udyam, e-shram, NCS and ASEEM portals to be interlinked
Raising and Accelerating MSME performance (RAMP) Program: with outlay of Rs 6000 Crore to be rolled out.

Skill Development

Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal): It will be launched to empower citizens to skill, reskill or upskill through on-line training.
Drone-As-A-Service (DrAAS): Startups will be promoted to facilitate ‘Drone Shakti’.

Education

‘One class-One TV channel’ programme of PM eVIDYA: To be expanded to 200 TV channels.
Virtual labs: skilling e-labs to be set up to promote critical thinking skills and simulated learning environment.
High-quality e-content: It will be developed for delivery through Digital Teachers.
Digital University: for world-class quality universal education with personalized learning experience to be established.

Health

National Digital Health Ecosystem: An open platform to be rolled out.
National Tele Mental Health Programme: for quality mental health counseling and care services to be launched
Saksham Anganwadi: Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0

Housing for All

Housing for All: Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana
Har Ghar, Nal Se Jal: Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under this

Prime Minister’s Development Initiative for North-East Region (PM-DevINE)

New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth and women under the scheme.

Vibrant Villages Programme

Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.

Urban Planning

Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.

(3) Industrial Sector

Telecom Sector

Scheme for design-led manufacturing to be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.

Export Promotion

Special Economic Zones Act to be replaced with a new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.

Atmanirbharta in Defence

68% of capital procurement budget earmarked for domestic industry in 2022-23, up from 58% in 2021-22

GIFT-IFSC

World-class foreign universities and institutions to be allowed in the GIFT City.

An International Arbitration Centre to be set up for timely settlement of disputes under international jurisprudence

(4) Energy Transition and Climate Action

Five to seven per cent biomass pellets to be co-fired in thermal power plants
CO₂ savings of 38 MMT annually
Extra income to farmers and job opportunities to locals
Help avoid stubble burning in agriculture fields
Pilot projects to be set up for coal gasification and conversion of coal into chemicals for the industry
Financial support to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry

(5) Mobilizing Resources

Data Centres and Energy Storage Systems to be given infrastructure status.
Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystems
Blended funds to be promoted for sunrise sectors
Sovereign Green Bonds to be issued for mobilizing resources for green infrastructure.

Digital Rupee

Introduction of Digital Rupee by the Reserve Bank of India starting 2022-23.

Providing Greater Fiscal Space to States

Enhanced outlay for ‘Scheme for Financial Assistance to States for Capital Investment’:

(6) Fiscal Management

Budget Estimates: Rs. 34.83 lakh crore
Revised Estimates: Rs. 37.70 lakh crore
Total expenditure estimated at Rs. 39.45 lakh crore
Total receipts other than borrowings estimated at Rs. 22.84 lakh crore
Fiscal deficit in current year: 6.9% of GDP (against 6.8% in Budget Estimates)

PART B

DIRECT & INDIRECT TAXES

(Not necessary)