On February 1st 2022, the Finance Minister of India, Mrs Nirmala Sitharaman presented the financial budget for the financial year 2021-2022. It was a well-sought-after budget this time as the world is recovering from the biggest pandemic of the century as well we had seen a terrible second wave as well as the upcoming state assembly elections. On 31st January, the minister had submitted the Economic Survey for the year 2021-2022.
The entire budget was paperless and was readout out from a tablet PC. The theme was the Economic
blueprint for the next 25 years— India at 75 to India at 100.
Major announcements from the Budget Speech
- Fiscal Deficit target- 6.4%
- Error correction in Income Tax fillings to be allowed
- Tax deduction limit raised for State govt employees for NPS fund to be increased to 14%
- Digital Assets will be taxed 30%
- SEZ Act to be replaced with new legislation for investment and support to companies
- The budget laid out a roadmap for Digitisation as a whole as for digital payments.
- National Tele Mental Health Program to be launched
- Major push for Transport infrastructure called as Gatishakti with seven engines.
- 5G to be deployed by this year
- A new EV swapping policy announced
- PLI scheme to create 60 lakh jobs
- Push for hospitality services post-pandemic
- Post-offices to be an area of focus for banking
- PM Awaaz Yojana housing policy to be extended
- Expected 9.2% growth rate
Major Takeaways
- PLI scheme to create 60 lakh jobs
- Ayush Ministry receives ₹3,000 Cr.
Railways
- Over 2000km of Railway network will be brought under Kavach System
- Over 400 new Vandebharat train services will be started.
- Over 100 cargo terminals over 3 years.
- Metro projects get ₹19,000 Cr.
Roadways
- 25,000 km expansion with ₹16,000 Cr funds.
- ₹1500 Cr for NorthEast
- Parvatmala Project
- Ken Betwa project for ₹1,400 Cr
- Energy as a Service business opportunity and EV swapping policy with interoperability.
- India's first digital currency- Digital Rupee will be released in next year. This will use Blockchain based technology.
- E-billing system in Central Ministries.
- Digital Education- One Class One TV. PM E Vidya Scheme.
- DESH upskilling portal launched.
- E-passports to have embedded chips technologies.
Technology
- Domestic manufacturing of Solar Cells energy modules.
- Sovereign Green bonds to be issued
- Duty concessions for electronic components.
- Use of Kisan specific drones for farming
- Optic Fibre Cable rollout in every village by 2025
- Ministry of Science and Technology receives ₹14,000 Cr
Criticisms
There is widespread criticism mainly from the opposition that the budget is corporate friendly, anti-poor, anti-farmer, anti-middle class. Certain states were ignored and received nothing from the budget.
Analysis
Irrespective of your opinion regarding the budget, we can see that there is a massive push for infrastructure, development, transportation etc. Apart from that, another notable aspect is that it's a digital budget, with a lot of push for technology and digital initiatives. This is an important push for progressiveness and modernisation. There has been no change in tax slabs which is a really good consistency. We hope India will achieve good economic growth and this budget will pave for a better future.
Credits- MoneyControl, DD News, The Indian Express, Bloomberg Quint.
Content Credits- Unnamalai (Check out their blog)
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