While giving out the Budget for the second time during the COVID-19 pandemic, Finance Minister Nirmala Sitharaman said, "We strive to provide the necessary ecosystem for the middle class. This Budget hopes to lay the foundation for Amrit Kal from India at 75 to India at 100". While on the one hand, the government kept the income tax slabs unchanged, it included a 30 per cent tax on the transfer of digital assets. In this fiscal, the Central Bank of India, or the RBI, is looking forward to launching 'Digital Rupee' using blockchain technology. This year's Union Budget comes at the beginning of the month when five states are all set to host their elections.
While speaking about the Digital Rupee, she said that what RBI would issue would be the digital currency. The government would charge a 30 per cent tax on all the profits individuals would have made through its assets outside the purview of the digital currency. She further added that by imposing a TDS surcharge of 1 per cent, the government would keep track of every trail of money in the transactions involving crypto assets.
She also clarified that cryptocurrency is not legal tender, but the currency issued by the Central Bank would be the digital currency. This move from the government's end would formally include virtual assets like cryptocurrencies and non-fungible tokens (NFTs) under the tax net, thus according it government regulation.
Health And Sanitation
Under health and sanitation, the finance minister has announced the rolling out of the National Health Ecosystem. The government emphasised mental health by promoting the National Tele Mental Health program, under which 23 tele mental health excellence centres would be set up. The Budget allows integrated benefits for women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi, and Poshan 2.0. Moreover, the government has set aside Rs 60,000 crores for over 3.8 crore households under their scheme 'Har Ghar, Nal Se Jal'.
While on the one hand, the Minister has announced the Ujjwala scheme would be extended to another one crore beneficiaries. The plan aims to provide clean cooking fuel to poorer households through LPG connections. However, one must keep in mind that the scheme has already provided connections to over eight crore beneficiaries. The rising prices of LPG and the upward trend in international fuel costs, supplemented by the withdrawal of subsidies on LPG cylinders, could soon lead to a reduced impact of the welfare scheme.
Tax, Indian Economy And Finance
Finance Minister announced the fiscal deficit to be 6.9 per cent of the GDP of the country. Sitharaman said tax returns could now be revised for omission and several mistakes or income if not reported. The corrective changes could now be done within two years in a one-time window from the end of the assessment year of tax payment. Moreover, the government has capped the surcharge on any long-term capital gains at 15 per cent. To put cooperatives at par with corporates, the government has decided to reduce the Minimum Alternate Tax rate to 18.5 per cent. Moreover, the surcharge of cooperatives has significantly been reduced from 12 per cent to 7 per cent for the total income ranging between Rs 1 to 10 crores.
Under the new corporate tax regime, the government has extended the timeline of availing several benefits. Previously, the government had announced March 31, 2023, as the date for newly incorporated manufacturing companies to fill in the 15 per cent Corporate Tax. However, the new announcement extends the deadline by one year to March 31, 2024. The period of incorporation for startups to avail of tax benefits has also been extended by a year to March 31, 2023. Finance Minister Sitharaman also announced a reduction in the surcharge of unlisted shares from 28.5 per cent to 23 per cent.
While reducing the customs duty on cut and polished diamond to 5 per cent, the government has upped the custom duty of Sodium cyanide. In this Budget, the duty on umbrellas has been increased by 20 per cent, and the steel scrap duty has been extended for another year. Shrimp aquaculture might see an increase in the coming days since its duty has been reduced.
While speaking about Employees' Taxes, the Minister proposed that both Centre and State government's employees' tax bar should be raised from 10 per cent to 14 per cent, to provide them with more social security benefits. This move, she said, would also bring the State government employees at par with the Central government employees.
Roadways And Railways
The finance minister announced that India is set to launch 400 new and energy-efficient Vande Bharat trains in the next three years. Moreover, while keeping an eye on the interest of the farmers, the Railways would develop 'One Station, One Product' to leverage the local produce ferried by the Railways, and over a hundred Gati Shakti cargo terminals would come up in the next three years. The Indian Railways would also develop the postal railway concept while giving thrust to a new and unexplored business area.
The new Gati Shakti master plan is likely to cost Rs 20,000 crores. Under the National Highways Project, the government aims to expand the country's national highways by more than 25,000 kilometres in 2022-23. The government would formulate the national master plan for the roads by 2023.
Education And Agricultural Allocations
The Minister announced that a Digital University would be created and available in several Indian languages. One Class, One TV channel will be expanded from 12 to 200 TV Channels to provide supplementary education in all regional languages to make up for the loss of formal education due to COVID, The Hindu reported.
For the agricultural industry, the procurement of wheat, paddy and other Kharif and Rabi crops would benefit more than one crore farmers. The National Bank for Agricultural and Rural Development (NABARD) would facilitate funds with blended capital for startups in the agricultural and rural setups. The government has declared 2022 to be the Year of Millet to support the post-harvest value addition of the crop. The government would use Kisan drones for assessing the crops and spraying the pesticides. Lastly, the Ken-Betwa River linking project is pegged at the cost of Rs 44,000 crores and would benefit 9 lakh hectares of farmland.
In fiscal 2021-22, the capital expenditure was pegged at Rs 5.5 lakh crore; however, it was raised to Rs 7.5 lakh crore in 2022-23. Under the mega announcement of the Parvat Mala Project, Finance Minister Sitharaman announced eight new ropeway projects to reduce the traffic and congestion in hilly areas. The move is well thought of to augment tourism under challenging terrains.
The government has shown a constant interest in improving the domestic defence industry and has allocated nearly two-thirds of all capital outlay from domestic defence manufacturers. The monetary allocation for the defence forces has also witnessed an almost 10 per cent increase from the revised budget estimates of the previous year to Rs 1.52 lakh crores.
The Budget for the Ministry of Home Affairs has also been enhanced by over 11 per cent, which means an increased allocation pegging at Rs 1.85 lakh crore in the latest edition of the Union Budget. In 2021-22, the Ministry was allocated Rs 1.66 lakh crores and Rs 1.67 lakh crores in the year before that. On the other hand, the capital expenditure for the Ministry has only been increased by 5 per cent in this Budget. Last year, the Ministry was allowed the expenditure of Rs 15,924 crores compared to Rs 16,753 crores this year.
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