Union Budget 2022 Explained: Highlights, Key Takeaways, Differences from Previous Year
Every year, a new financial/fiscal year begins Union Budget 2022 Explained: Highlights, Key Takeaways, Differences from Previous Years
1st April and ends on 31st March of the proceeding year. This fiscal year is represented in the Union Budget. Union Budget is the annual financial statement that gives insights of the government’s receipts and expenditures for that fiscal year. The Budget is allotted for the upcoming fiscal year. Candidates can make a note of the following given points about basic facts of the Union Budget. These will be helpful for preparation of most of the competitive government exams.
The Union budget is presented by the Union Finance Minister on the first day of February every year since 2017.
Before being presented through the Finance bill and the Appointment Bill, the Union Budget has to be passed by the Lok Sabha.
The Union Budget informs about the changes that could take place in the direct and indirect taxes of the country.
It allocates the resources in public welfare in the most efficient manner.
The Union Budget consists of documents like Demands for Grants(DG), Annual Financial Statement, etc.
Union Budget comprises Capital Budget and Revenue Budget.
Revenue Budget and Capital Budget
As mentioned above, the Union Budget consists of Revenue Budget and Capital Budget. A clear understanding of both is necessary. The following description distinguishes between the two.
Revenue Budget: This accounts for the government’s revenue expenditure and receipts. In a condition where the expenditure exceeds receipts, the government is said to have incurred a revenue deficit. The Revenue Budget includes Tax Revenue and Non-Tax Revenue. Let us understand them in more detail.
Tax Revenue: This gives an account of the revenues collected by the government in the form of tax. For instance, corporation tax, wealth tax, income tax, etc.
Non-Tax Revenue: As the name suggests, this is the revenue collected by the government from non-tax sources. For instance, loans lent by the government to states, profits from public sector corporations, etc.
Capital Budget: This accounts for the government’s capital receipts and payments. Payments made by the government include capital expenditure on development of health facilities, machinery, etc. When the government comes into a state, where the capital expenditure exceeds the revenue, it is said to have incurred a fiscal deficit.
India Budget Analysis 2022
Indian Union Budget 2022 was a paperless budget presented just like last year. Finance Minister Nirmala Sitharaman said “This budget seeks to lay the foundation and give a blueprint to steer the economy over the Amrit Kaal of the next 25 years- from India 75 to India at 100. It continues to build on the vision drawn in the Budget of 2021-22. Its fundamental tenets, which included transparency of financial statement and fiscal position, reflect the government’s intent, strengths, and challenges”.The Fiscal Year 23 is allotted total spending of Rs. 39.45 lakh crore which is 4.6% more than the current fiscal year.
Ministry- wise Allocation Of Budget
The Union Budget involves the allocation of financial resources to different ministries. This gives us a detailed overview of development and welfare to be expected in the mentioned ministries. Here is a summarized table of the budget allotment to different ministries. Candidates should pay special attention to this data.
Ministry Budget. (in rupees)
Defense 525.2K
Consumer Affairs, Food and Public Distribution. 217.7K
Road Transport and Highways 199.1K
Home Affairs. 185.8K
Railways. 140.4K
Rural Development 138.2K
Agriculture 132.5K
Chemical and Fertilizers. 107.7K
Communication 105.4K
The Union Budget’s main purpose is to make sure that all the financial resources that are available, are allocated efficiently to different areas of development. These include areas like infrastructure, health, education, defence and more. To execute this, other than allocating financial resources, different schemes and programmes are launched. These include initiatives like digital education platforms, health registry and documents registry. Let us now move further and deal with different sections in detail.
Infrastructure
The multiple plans of the government in infrastructure include expansion of structures like railway networks and affordable housing. This is executed with the help of a number of initiatives, platforms and schemes. Let us take a look at how the Union Budget plans to spend on infrastructure.
Housing
The Indian Union Budget 2022 allotted Rs.48000 crores for the building of 80 lakh homes.
This will be done under the Pradhan Mantri Awas Yojna (PMAY).
Approval to projects regarding affordable housing in urban areas will be prioritized.
Need of digitation of land was highlighted. This is to be achieved by the linkage of National Generic Document Registration System(NGDRS) with the ‘One-nation One-registration Software’
Railways
2000 km of rail network will be brought under Kavach as a part of Atmanirbhar Bharat. Kavach is a indigenous world class technology for safety and capacity augmentation in 2022-23.
400 new generation Vande Bharat Trains will be launched during the next three years.
One hundred PM GatiShakti Cargo Terminals will be developed during the next three years.
‘One Station- One Product’ phrase will be spread to help local businesses and supply chains.
Read about the Contingency Fund of India in Budget 2021-22 here.
Defence
To promote AtmaNirbharta, the government has been making efforts to reduce imports for the Armed Forces. 68% of the capital procurement budget will be for domestic industry in fiscal year 23.
25% of the defence R&D budget will be earmarked.
Private industry will be encouraged to collaborate with DRDO for designing and development of military equipment.
Agriculture
MSP(Minimum Support Price) value 2.37 lakh crore will be paid directly to the accounts of wheat and paddy farmers.
Organic farming will be promoted.
Use of Kisan Drones will be promoted.
With the aid of NABARD, a fund will be raised under the co-investment model. This will promote finance startups for agriculture.
Rs.44,605 crore will be spent for the Ken-Betwa Link Project for irrigation benefits to farmers.
Education and Skill Development
‘One class-One TV channel’ programme by PM eVIDYA will be expanded from 12 to 200 TV channels. This will be done to ensure education in regional languages for classes 1-12.
750 virtual labs in science and mathematics and 75 skilling e-labs will be steup.
A digital university will be set up in different Indian languages and ICT formats.
Digital DESH e-portal will be launched for skilling and livelihood.
In certain ITSs of all states, skilling courses will be started.
Health
A digital platform will be launched for the National Digital Health Ecosystem.
A National Tele Mental Health Programme will be launched to provide better services for mental health counseling.
Rs. 60000 crore has been allocated to HarGhar, Nal se Jal to cover 3.8 crore households in 2022-23.
Owing to the decreased requirement of COVID vaccinations, there is a 45% drop in the health sector budget. Rs.41011 crore have been allocated for the health sector.
A promise to aid in COVID vaccines with Rs.5000 crore has been made by the finance minister.
Digital Currency
Central Bank Digital Currency(CBDC) will be introduced to boost the digital economy.
The Budget proposed to introduce Digital Rupee using blockchain and other efficient technologies.
Tax of 30% will be imposed on virtual assets.
MSME
About 130 lakh Medium, Micro and Small Enterprises(MSMEs) have been provided with credit by Emergency Credit Line Guarantee Scheme (ECLGS).
An additional amount will be earmarked exclusively for the hospitality enterprises.
There will be an additional credit of 2 lakh crore for Micro and Small Enterprises.
Total spending of Rs.6000 crore over 5 years for improving the performance of ‘Raising and Accelerating MSME Performance’ programme will be done.
Special Economic Zones Act
A new legislation will be replacing the Special Economic Zones Act.
This will aid the states in becoming partners in the Development of Enterprise and Service Hubs covering all large existing and new industrial enclaves to optimize infrastructure already in place.
Climate
Sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. These will prove beneficial in reducing the carbon footprint.
Rs.19500 crore will be allocated for Production Linked Incentive for manufacture of high efficiency solar modules.
Four pilot projects for coal gasification will be set up. This will aid in conversion of coal into chemicals required for industry. This is an initiative taken to reduce the carbon footprint.
Policies promoting agroforestry will be made.
List of items that would become cheaper post Budget 2022:
Frozen mussels
Frozen squids
Asafoetida
Cocoa beans
Methyl alcohol
Acetic acid
Cut and polished diamonds
Camera lens for cellular mobile phone
Know more about Economic Survey 2021 here.
List of Items that would become more expensive post the Budget 2022 due to reduced tax on custom duty by 5%:
Unblended petrol and diesel
Umbrella
Imitation jewelry
Single/Multiple loudspeakers
Earphones and headphones
Smart meters
Solar cells
Solar modules
X-ray machines
Parts of electronic toys
Differences In 2022-23 Budget From Previous Year 2021-22
Here is a summarized table to compare the differences in different aspects of the budget for the year 2022-23 compared to the year 2021-22.
Category 2022-23 2021-22
Health Sector Rs.41,011 crore Rs.74,820 crore
Capital Expenditure Rs.7.50 lakh crore Rs.5.5 lakh crore
Fiscal Deficit target 6.9% of GDP 6.8% of GDP
Financial Assistance to stalks for capital investment Rs.1 lakh crore Rs.15,000 crore
Indian Union Budget 2022- Takeaways
Total spending announced in the Union Budget 2022-23 is Rs.39.45 lakh crores. It is 4.6% more than that of the current year.
The fiscal deficit target for the financial year 2022-23 is 6.9% of GDP.
Cut in the tax on Long Term Capital Gains(LTCG). There will be a capping in tax at 15%.
Rs.2.37 lakh crore MSP(Minimum Support Price) will be paid to wheat and paddy farmers directly.
For the Defence sector, 68% of the budget procurement has been earmarked.
Rs. 48000 crores have been allocated for the building of 80 lakh homes under the Pradhan Mantri Awas Yojna(PMAY).
Taxpayers can now correct their errors and file the updated returns within two years of the specific assessment year.
For the Budget 2022-23 there is no specific allocation of funds made by the government for the five poll bound states of Uttar Pradesh, Uttarakhand, Manipur, Punjab and Goa.
There is an increase in the tax deduction limit for the employees of the state government. This is for employers contributing to the National Pension System. The increase of the limit is to 14% from 10%. This is done to bring the state government employees at par with the central government employees.
Startups will be promoted to facilitate Drone Shakti through varied applications.
Capital expenditure has been increased from Rs.5.5 lakh crore to Rs.7.50 lakh crore.
Integration of postal and railway networks facilitating parcel movement was announced.
Kisan Drones will be used for crop assessment and digitisation of land records.
We hope that this article on Union Budget Analysis 2022 was helpful for you. The analysis included data regarding the budget in different ministries and areas. It explains different highlights of the budget as well. Candidates will find the article helpful in their preparation for different competitive examinations. ।
Indian Union Budget 2022- FAQs
Q.1 What is the expenditure announced for the Union Budget 2022-23?
Ans.1 The total spending announced for Union Budget 2022-23 is Rs.39.45 lakh crore.
Q.2 What constitutes a Union Budget?
Ans.2 A union budget consists of Revenue budget and Capital Budget. The Revenue budget accounts the government’s revenue receipts and expenditure while the Capital budget accounts for the receipts and payments made by the government for the mentioned fiscal year.
Q.3 Who presents the Union Budget?
Ans.3 The Union Budget is presented by the Union FInancial Minister. It is presented through FInancial Bill and Appointment Bill only when it is passed in the Lok Sabha. For the financial year 2022-23, the Indian Union Budget was presented by FInancial Minister Nirmala Sitharaman.
Q.4 What is the need for the Union Budget?
Ans.4 The Union Budget ensures that the available resources are utilized efficiently for public welfare. The allotment of financial resources in different areas like education, defence, health, etc is accounted for in the Budget.
Q.5 What are the major areas covered in the Budget 2022-23?
Ans.5 The Finance Minister made important announcements like launch of Digital Rupee, 400 new generation Vande Bharat trains, Digital University, Mental Health Tele Programme and more.