Union Budget 2022-23 | Key Highlights, Analysis & Impact
Written by Vivek Kumar & Avinash Jha Dt. February 9th, 2022
The session began on warm note, with the Finance Minister projecting India’s GDP growth at 9.27%, the highest among the world’s major economies. Finance Minister Nirmala Sitharaman also emphasized that India is in a strong position to overcome
- Expenditure: The government proposes to spend Rs. 39,44,909crore, which is an increase of 4.6% over the revised estimate of 2021-22. In 2021-22, total expenditure is estimated to be 8.2% higher than budget estimate.
- Receipts: The receipts (other than borrowings) in 2022-23 are expected to beRs 22,83,713crore, an increase of 4.8% over revised estimate of 2021-22. In 2021-22, total receipts (other than borrowings) are estimated to be 10.2% higher than the budget estimates.
- GDP: The government has estimated a nominal GDP growth rate of 9.27% in 2022-23.
- Deficits: Revenue deficit in 2022-23 is targeted at 3.8% of GDP, which is lower than the revised estimate of 4.7% in 2021-22. Fiscal deficit in 2022-23 is targeted at 6.4% of GDP, lower than the revised estimate of 6.9% of GDP in 2021-22 (marginally higher than the budget estimate of 6.8% of GDP). Interest expenditure at Rs 9,40,651crore is estimated to be 43% of revenue receipts.
- Extra Budgetary Resources (EBR): After a number of years, the budget has not relied on EBR or loans from National Small Savings Fund.
- Ministry Wise Allocations: Among the top 13 ministries with the highest allocations, in 2022-23, the highest percentage increase in allocation is observed in the Ministry of Communications (93%), followed by the Ministry of Road Transport and Highways (52%), and the Ministry of Jal Shakti (25%).
- Legislative proposals
The Special Economic Zones Act, 2005 will be replaced with a new legislation that will enable states to become partners in ‘Development of Enterprise and Service Hubs’, covering all existing and new industrial enclaves. Legislative changes will also be brought in to promote agro-forestry and private forestry. Amendments will be made in the Insolvency and Bankruptcy Code to facilitate cross border insolvency resolution.
- Fiscal Management
Rs. 51,971crore has been budgeted in 2022-23 towards settling the liabilities of Air India.
- Ministry of Micro, Small & Medium Enterprises
Emergency Credit Line Guarantee Scheme (ECLGS) will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of five lakh crore rupees. Credit Guarantee Trust for Micro and Small Enterprises will be revamped to facilitate additional credit of two lakh crore rupees.
- Health and Nutrition
Under Ayushman Bharat Digital Mission, an open platform for National Digital Health Ecosystem will be established. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities. A National Tele Mental Health Program also will be launched to provide access to quality mental health counseling and care services.
- The Ken-Betwa Link Project will be implemented at an estimated cost of Rs 44,605 crore (Allocations of Rs. 1,400 crore in 2022-23 have been made for this project). It is the first project under the National Perspective Plan for Interlinking of Rivers. It envisages transferring water from the Ken River to the Betwa River, both tributaries of the Yamuna. The Ken-Betwa Link Canal will be 221 km long, including 2-km long tunnel.
- Draft DPRs of five river links, namely Damanganga-Pinjal, Par-Tapi- Narmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been finalized. Once a consensus is reached among the beneficiary states, the Centre will provide support for implementation.
Labour and Employment
The Digital Ecosystem for Skilling and Livelihood (DESH) Stack e-portal will be launched. The portal will help citizens learn skills, acquire credentials, and assist in finding relevant jobs.
Ministry of Infrastructure Development
Projects relating to transport and logistics infrastructure in the National Infrastructure Pipeline will be aligned with the PM Gati-Shakti framework, which was launched last year. The Prime Minister’s Development Initiative for North-East (PM-DevINE) will be implemented through the North-Eastern Council to fund development projects in the North-East region. Also, one lakh crore rupees is being allocated to states for catalyzing investments, in the form of 50 year interest free loans.
PM Gatishakti is a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely“Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure”. All seven engines will pull forward the economy in Transmission, IT Communication, Bulk Water & Sewerage, and Social Infrastructure.
The scope of PM Gatishakti National Master Plan will encompass the seven engines for economic transformation, Seamless multimodal connectivity and logistics efficiency. It will also include the infrastructure developed by the state governments as per the Gatishakti Master Plan. The focus will be on planning, financing including through innovative ways.
Ministry of Road Transport and Highways
- The PM Gati-Shakti Master Plan for Expressways will be formulated in 2022-23.
- The National Highways network will be expanded by 25,000 km in 2022-23.
Ministry of Railways
One-station-one-product concept will be implemented to help local businesses and supply chains. 400 new Vande Bharat trains will be developed and manufactured during the next three years. Further, 100 cargo terminals for multimodal logistics facilities will also be developed during the next three years.
Ministry of Telecommunication
Spectrum auctions will be conducted to facilitate rollout of 5G mobile services within 2022-23. A scheme for design-led manufacturing will be launched to build an ecosystem for 5G as part of the Production Linked Incentive (PLI) Scheme.
Ministry of Energy and Natural Resources
- A battery swapping policy for electric vehicles will be implemented. Four pilot projects for coal gasification and conversion of coal into chemicals required for the industry will be set-up.
- Sovereign Green Bonds will be issued in 2022-23 for mobilizing resources for green infrastructure.
- To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of 19,500 crore for Production Linked Incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.
Ministry of Defence
- Our Government is committed to reducing imports and promoting Atmanirbharta in equipment for the Armed Forces. 68 per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22.
- Defence R&D will be opened up for industry, startups and academia with 25 per cent of defence R&D budget earmarked. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO ( Defence Research and Development Organization ) and other organizations through SPV model. An independent nodal umbrella body will be set up for meeting wide ranging testing and certification requirements.
Ministry of Health and Family Welfare
The pandemic has accentuated mental health problems in people of all ages. To better the access to quality mental health counseling and care services, a ‘National Tele Mental Health Program’ will be launched. This will include a network of 23 tele-mental health centers of excellence, with NIMHANS being the nodal center and International Institute of Information Technology-Bangalore (IIITB) providing technology support.
Vivek Kumar & Avinash Jha