Finance minister Nirmala Sitharaman on Tuesday pledged to spend more to fire up the key engines of growth in Asia’s third-largest economy as it stages a world-beating recovery from the pandemic. Sitharaman proposed increasing the size of the economy’s annual spending to $529 billion to support growth plans for the year beginning April.
Here are 20 key announcements from her fourth Budget:
1. India hiked capital expenditure for FY23 at Rs 7.5 lakh crore, about 2.9% of GDP. This boost is 35.4% higher than the budget estimate of Rs 5.54 lakh crore in FY22.
2. The fiscal deficit target has been set at 6.4% for FY23.Higher tax collections so far in the current fiscal have ensured that the government meets the target comfortably.
3. National Highways Network will be expanded by 25,000 km in FY23. Nirmala Sitharaman said Rs 20,000 crore will be mobilised through innovative ways of financing to complement the public resources.
4. The emergency credit linked scheme for small firms has been extended to March 2023 and expanded by an additonal Rs 50,000 crore. The total cover is now of Rs 5 lakh crore.
5. Startups will enjoy extended tax benefits. So far startups created between April 1, 2016, till March 31, 2021, were eligible for this benefit. This has now been extended to March 31, 2023. This essentially means such startups will be able to avail a 100% tax rebate on the profit made in three years in a total time frame of ten years of operations given their overall annual turnover is not more than Rs 25 crore in a fiscal.
6. Any income from transfer of virtual digital assets such as cryptocurrencies, non-fungible tokens or NFTs will be taxed at 30%. Also Loss from sale of virtual digital asset can be set off only against the gains from sale of virtual digital assets. Cryptocurrencies as a gift will be taxed at the receiver's end.
7. A new legislation will replace the SEZ Act that will cover all large existing and new industrial enclaves to enhance competitiveness of exports.
8. India will issue its own Central Bank Digital Currency in the form of a digital rupee using blockchain to be issued by RBI in 2022-23, as investments in cryptos turn hot in the country.
9. India will issue sovereign green bonds for funding green infrastructure. Green bonds are debt instruments that differ from conventional fixed-income securities only in that the issuer pledges to use the proceeds to finance projects that are meant to have positive environmental or climate effects. Since its debut in 2007, the green bond market has been growing steadfastly.
10. India will also launch e-passports in 2022-23, Sitharaman said. These will have biometric data. Passports with biometrics are used in Germany, UK and Bangladesh. An e-passport comes fitted with a small electronic chip containing the data.
11. To bridge the learning gap due to Covid pandemic which has let to a two-year school closure, the government is turning to digital and on-air mode. The Government will supplement the learning in schools by extending PM e-Vidya initiative in regional languages.
12. Sitharaman said India will allow its citizens to file updated Income Tax Returns or ITR within two years in case of any omission or mistake.
13. The budget has paved the way for faster resolution of bankrupt companies by proposing amendments to enhance the resolution process's efficiency and cross-border insolvency resolution.
14. 25 percent of the annual research and development budget of the defence ministry will be reserved for private companies and start-ups, a move that will help break the monopoly of the public sector on developing cutting edge military technology.
16. Renewable energy and energy storage technologies received a push in the Budget 2022-23 that proposed additional allocation for indigenous solar equipment manufacturing programme and policy support for battery storage.
17. India is considering battery swapping for electric cars rather than charging stations as it seeks to spur adoption of cleaner transport in its notoriously polluted and crowded cities.
18. Lower tax on new manufacturing units will be extended. 15% lower tax rate for manufacturing units extended for one more year till March 2024.
19. 100% of India’s 1.5 lakh post offices will be on-boarded on core banking system in 2022.
20. The proposal of Rs 48,000 crore outlay for helping build low-cost houses in both rural and urban regions across the country is expected to boost the affordable housing and ancillary industries
Here are 20 key announcements from her fourth Budget:
1. India hiked capital expenditure for FY23 at Rs 7.5 lakh crore, about 2.9% of GDP. This boost is 35.4% higher than the budget estimate of Rs 5.54 lakh crore in FY22.
2. The fiscal deficit target has been set at 6.4% for FY23.Higher tax collections so far in the current fiscal have ensured that the government meets the target comfortably.
3. National Highways Network will be expanded by 25,000 km in FY23. Nirmala Sitharaman said Rs 20,000 crore will be mobilised through innovative ways of financing to complement the public resources.
4. The emergency credit linked scheme for small firms has been extended to March 2023 and expanded by an additonal Rs 50,000 crore. The total cover is now of Rs 5 lakh crore.
5. Startups will enjoy extended tax benefits. So far startups created between April 1, 2016, till March 31, 2021, were eligible for this benefit. This has now been extended to March 31, 2023. This essentially means such startups will be able to avail a 100% tax rebate on the profit made in three years in a total time frame of ten years of operations given their overall annual turnover is not more than Rs 25 crore in a fiscal.
6. Any income from transfer of virtual digital assets such as cryptocurrencies, non-fungible tokens or NFTs will be taxed at 30%. Also Loss from sale of virtual digital asset can be set off only against the gains from sale of virtual digital assets. Cryptocurrencies as a gift will be taxed at the receiver's end.
7. A new legislation will replace the SEZ Act that will cover all large existing and new industrial enclaves to enhance competitiveness of exports.
8. India will issue its own Central Bank Digital Currency in the form of a digital rupee using blockchain to be issued by RBI in 2022-23, as investments in cryptos turn hot in the country.
9. India will issue sovereign green bonds for funding green infrastructure. Green bonds are debt instruments that differ from conventional fixed-income securities only in that the issuer pledges to use the proceeds to finance projects that are meant to have positive environmental or climate effects. Since its debut in 2007, the green bond market has been growing steadfastly.
10. India will also launch e-passports in 2022-23, Sitharaman said. These will have biometric data. Passports with biometrics are used in Germany, UK and Bangladesh. An e-passport comes fitted with a small electronic chip containing the data.
11. To bridge the learning gap due to Covid pandemic which has let to a two-year school closure, the government is turning to digital and on-air mode. The Government will supplement the learning in schools by extending PM e-Vidya initiative in regional languages.
12. Sitharaman said India will allow its citizens to file updated Income Tax Returns or ITR within two years in case of any omission or mistake.
13. The budget has paved the way for faster resolution of bankrupt companies by proposing amendments to enhance the resolution process's efficiency and cross-border insolvency resolution.
14. 25 percent of the annual research and development budget of the defence ministry will be reserved for private companies and start-ups, a move that will help break the monopoly of the public sector on developing cutting edge military technology.
16. Renewable energy and energy storage technologies received a push in the Budget 2022-23 that proposed additional allocation for indigenous solar equipment manufacturing programme and policy support for battery storage.
17. India is considering battery swapping for electric cars rather than charging stations as it seeks to spur adoption of cleaner transport in its notoriously polluted and crowded cities.
18. Lower tax on new manufacturing units will be extended. 15% lower tax rate for manufacturing units extended for one more year till March 2024.
19. 100% of India’s 1.5 lakh post offices will be on-boarded on core banking system in 2022.
20. The proposal of Rs 48,000 crore outlay for helping build low-cost houses in both rural and urban regions across the country is expected to boost the affordable housing and ancillary industries
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