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Economic Times | 01 Feb, 2022 | 10.05AM IST
Budget 2022 News LIVE Updates: Nirmala Sitharaman arrives in Parliament; Budget to be tabled at 11am
Finance minister Nirmala Sitharaman will present the fourth Budget of the Modi 2.0 government today. The stage for the Budget presentation was set by the Economic Survey stating that the government has the fiscal space to do more to support the economy that is forecast to grow at a healthy 8-8.5 per cent growth in the 2022-23 fiscal. Now, the focus of the Budget is expected to be on further accelerating India's pace of recovery from the pandemic shock along with further boosting up India's healthcare system to secure against any future outbreaks. The government will continue to spend more to aid the recovery and put India back on a trajectory of higher growth. Check out this space for Budget 2022 live updates.
Latest on the Budget
Budget 2022 expectations
Budget and Markets
Economic indicators
Expert opinion
"We clearly need to leverage on our strengths as a country in terms of the huge consumption potential that we have; the ability to take advantage of the relocation of global value chain or even on the services side of the economy, there is a lot of scope in terms of digital penetration, lot of scope on food processing, new technology, new sectors, green tech etc.
- Sonal Varma, Nomura’s Managing Director and Chief Economist, India and Asia ex-Japan
"Costs have really gone up in recent times. We have to improve consumption demand by steps such as augmenting rural income through increased allocation on MGNREGA, rural infrastructure creation, etc. A focus on improving the health infrastructure and subsidised credit to SMEs and contact intensive sectors is really important.
- Pawan Munjal, Vice President, CII
"If you try to tinker too much with inflation, you kill growth but in the long run, that is far more hurtful than a bit more inflation in order to generate more growth. In my view, the finance minister and the RBI are fairly aligned in that perspective. I think the Budget will only take that thinking forward. I do not think they will be extra cautious on the inflation front.
- Shankar Sharma, Co-founder, First Global
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Latest on the Budget
- Economic Survey projects economy to grow at 9.2% in the current fiscal, forecasts FY23 real GDP growth at 8-8.5%.
- The Budget Session of Parliament began today with the address by President Ram Nath Kovind to both Houses in the Central Hall
- The Budget Session is scheduled to conclude on April 8 wherein the first part of the session will extend up to February 11
- The Union budget 2022-23 to be presented by finance minister Nirmala Sitharaman on February 1 will be in paperless form
- No 'Zero Hour' on 31st January and 1st February
- No ‘halwa’ ceremony this time around amid Omicron worries
- Strict Covid-19 protocols will continue in parliament
Budget 2022 expectations
- Healthcare industry seeks priority status, increase in fund allocation to 3% of GDP
- Some experts are anticipating changes in income tax slabs and rates
- Budget 2022 will be MSME and export oriented, says FIEO
- Budget should focus on amping up health infra, say experts
- Fintech industry hopes for incentives in Budget to push financial inclusion
- Scheme to develop 700 districts as export hubs on the cards
- The realty sector is pinning high hopes on Budget to boost market sentiments
- Economy may need more hand-holding, fiscal correction can wait, shows a recent report
- Budget to aim at boosting growth, achieving fiscal consolidation, says BoB eco research
- Real estate sector expects tax relief, industry status from Sitharaman
- Experts want Budget to focus on bridging widened inequality in economy and create jobs
- Pharma industry wants Budget to announce incentives for conducting R&D
Budget and Markets
- Market watchers believe that despite the higher target divestment for the upcoming financial year in the Union Budget, LIC IPO will be the key for the targets.
- Though market sees volatility pre and post Budget, net-net, the event hardly leaves any impact in the two-week period
- Centre is likely to miss the targets of divestment and the strategic stake sales in FY2021-22
- Market experts believe disinvestment and privatisation are likely to gain further traction
- Crypto startups seeking clarity over issues like taxation, legislation, exemptions and regulations
- Analysts do not see any change in capital gain tax on equity
Economic indicators
- NSO data and the third-quarter results emanating from the corporate sector paint a picture of cautious optimism
- Key challenge to strike a balance between supporting the growth by reviving the dormant private consumption and investment demands while containing inflation
- According to the NSO, the real GDP in the year 2021-22 is expected to be Rs 147.54 lakh crore registering a growth rate of 9.2%
- The Purchasing Managers' Index for services is back to pre-Covid levels
- Exports and imports have registered high growth rates, and so has the trade deficit
- The nominal GDP is expected to grow almost at 18%, about 3.5 percentage points higher than the budgetary estimates
- The direct tax revenue is expected to be beyond budget estimates for this year
- Private final consumption expenditure, estimated at Rs 80.8 lakh crore for the fiscal year, remains about three percent below the Rs 83.2 lakh crore in 2019-20
Expert opinion
"We clearly need to leverage on our strengths as a country in terms of the huge consumption potential that we have; the ability to take advantage of the relocation of global value chain or even on the services side of the economy, there is a lot of scope in terms of digital penetration, lot of scope on food processing, new technology, new sectors, green tech etc.
- Sonal Varma, Nomura’s Managing Director and Chief Economist, India and Asia ex-Japan
"Costs have really gone up in recent times. We have to improve consumption demand by steps such as augmenting rural income through increased allocation on MGNREGA, rural infrastructure creation, etc. A focus on improving the health infrastructure and subsidised credit to SMEs and contact intensive sectors is really important.
- Pawan Munjal, Vice President, CII
"If you try to tinker too much with inflation, you kill growth but in the long run, that is far more hurtful than a bit more inflation in order to generate more growth. In my view, the finance minister and the RBI are fairly aligned in that perspective. I think the Budget will only take that thinking forward. I do not think they will be extra cautious on the inflation front.
- Shankar Sharma, Co-founder, First Global
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!1 New UpdateClick here for latest updates
Just In: Finance Minister Nirmala Sitharaman arrives at the Parliament
Will Sitharaman give India's middle class what they want?
Taxpayers expect that Budget 2022 will include tax rate and surcharge reductions, as well as an increase in the deduction available under section 80C, an increase in the housing loan repayment exemption, dividend tax relief, capital gains rationalisation across different asset classes, the elimination of securities transaction tax, and the removal of GST on services provided to the general public.
ET Survey on Economic Recovery
While over 37% respondents thought Modi government managed the recovery process after the second wave quite well, around 30% said the opposite, arguing that there are still too many pain points.
India's Startup Scenario
- Compared to 2016-17, the startup scenario has remarkably changed, with startup hubs all across the country
- This shows a startup culture taking root in the country in a clear manner, says the principal economic advisor
Just In: Finance Minister Nirmala Sitharaman along with Ministers of State for Finance, Dr Bhagwat Kishanrao Karad, Shri Pankaj Chaudhary, and senior officials of the Ministry of Finance, called on President Ram Nath Kovind before presenting the Union Budget 2022-23.
The common man's Budget wish: Hike tax exemption limit for health insurance under Section 80D
The current tax incentives do not incentivize consumers to purchase adequate health insurance. The government should have two objectives under Section 80D.
To encourage more people to buy health insurance and to make sure that they buy the right amount of coverage. To do this, Section 80D income tax exemptions should be increased, ideally doubled.
GST reduction has a direct impact on overall insurance pricing, making it much more affordable to buy. If the GST tax slab is cut from 18% to 10 or 5%, there will be an immediate increase in health insurance enrollment.
To encourage more people to buy health insurance and to make sure that they buy the right amount of coverage. To do this, Section 80D income tax exemptions should be increased, ideally doubled.
GST reduction has a direct impact on overall insurance pricing, making it much more affordable to buy. If the GST tax slab is cut from 18% to 10 or 5%, there will be an immediate increase in health insurance enrollment.
India's Patents Ecosystem
- Significant improvement in patents in last 10 years in number of applications and patents granted
- As opposed to MNCs, more Indian residents are registering patents
- India still far behind some other countries, needs to further smoothen patents process
Healthcare Stocks to Watch: Centre expected to increase spending to boost production and tax relief for individuals buying health insurance, better access to medical care, and a push for drug research
Price as on 01 Feb, 2022 09:43 AM, Click on company names for their live prices.
Nirmala Sitharaman's longest speeches. Will she outdo herself today?
- 2021 - 1 Hour 40 Mins
- 2020 - 2 Hrs 42 Mins (Longest Ever)
- 2019 - 2 Hrs 15 Mins
Agri Stocks to Watch: Analysts expect support for farming through aid for food processing, incentives linked to production, and higher farm credits, and subsidies for fertilizers and crop protection
Price as on 01 Feb, 2022 09:36 AM, Click on company names for their live prices.
Finance Minister Sitharaman to address press conference post presentation of Union Budget 2022-23 in Parliament at 03.45 PM.
Finance Minister Smt. @nsitharaman to address press conference post presentation of Union Budget 2022-23 in Parliam… https://t.co/AglZtk65nM
— Ministry of Finance (@FinMinIndia) 1643686098000No briefcase or bahi khata, Finance Minister Nirmala Sitharaman will present the Budget 2022-23 in a paperless format just like last year.
In a historic move, Budget 2021 was presented in a digital format for the first time to promote the Government of India's Digital India flagship programme. This is being seen as an attempt to go green and also to minimise physical contact amid the pandemic.
On the morning after the Economic Survey, if you read some newspapers, you will come to the conclusion that there is no Opposition in India And, even if there is a feeble Opposition, it has no views on the economy.
- P Chidambaram, Former finance minister
All sectors trade on a firm note in opening trade
The benchmark S&P BSE Sensex has climbed in the month following the budget day in only three of the past eight years since Prime Minister Narendra Modi came to power in 2014.
Renewables Stocks to Watch: In line with the Centre's focus on reducing emissions, analysts expect a raft of support for infrastructure development for EVs and green energy generation
Price as on 01 Feb, 2022 09:24 AM, Click on company names for their live prices.
Just In: Nirmala Sitharaman arrives at Rashtrapati Bhawan to meet President Kovind
Opening Bell: Sensex jumps 550 points ahead of Budget; Nifty tops 17,500; Tata Steel, HCL Tech rise 2% each
Infrastructure stocks to watch: A gauge of India’s top-30 companies in roads, air, ports, shipping, railways and other utility services, climbed 36% in 2021, its best gain since 2009
Price as on 01 Feb, 2022 09:16 AM, Click on company names for their live prices.
Stocks to watch
- Infrastructure, rural development and health-care stocks are among analysts’ top picks as India’s government is set to step up spending in a budget aimed at kickstarting investment to boost growth.
- Construction spending, including on roads and ports, as well as incentives for electric mobility and renewable energy are likely going to be in focus.
How markets react to Budget
With India’s equity benchmark tumbling amid the recent global selloff spurred by concerns over the Federal Reserve’s imminent rate hikes, and foreign funds fleeing the market, investors are hoping budget announcements will bring some reprieve.
India's GST Collections
Gross GST receipts stayed above the Rs 1 lakh crore mark for the sixth consecutive month in December on the back of the strengthening economic recovery and anti-evasion measures unveiled by the government.
Four major reforms were done in the last 5-6 years, all mutually reinforcing. But, their impact has still not been fully realized.
- Arvind Panagariya
India's job market
The unemployment rate worsened to 7.9% in December from 7% a month ago as the third wave of Covid-19 led to imposition of weekend and night curfews across states.
On the common man's mind: Standard deduction hike, income tax relief for saving for kids' education
The amount of the standard deduction is rather low, given the recurring cost of inflation over time and the present living expenses of paid workers. As a result, in Budget 2022, this sum should be increased.
Everyone has a financial goal of saving for their child's higher education, and most individuals set aside a portion of their salary for this purpose. There is currently no stated deduction or exemption for such monies, with the exception of the Sukanya Samriddhi Yojana, which is particularly for a girl child.
A separate deduction of at least Rs 1.5 lakh for school funding would be a welcome gesture. To ensure that funds are not misused, it could be directly paid to educational institutes as and when the child is admitted for further study.
Everyone has a financial goal of saving for their child's higher education, and most individuals set aside a portion of their salary for this purpose. There is currently no stated deduction or exemption for such monies, with the exception of the Sukanya Samriddhi Yojana, which is particularly for a girl child.
A separate deduction of at least Rs 1.5 lakh for school funding would be a welcome gesture. To ensure that funds are not misused, it could be directly paid to educational institutes as and when the child is admitted for further study.
India's economic growth
- Agencies like the IMF and the World Bank have shown in their economic outlook reports that India is on course to becoming the fastest growing economy of the world
- While the former projected India to grow by 9 per cent, the latter projected it to grow by 8.3 per cent in FY22
India needs a new vision and urgently move away from incremental budgetary policy moves and stop thinking only about areas like manufacturing or agriculture.
- Raghuram Rajan, ex-RBI governor
What India's middle class expects: Tax breaks for those working from home
The present standard deduction should not be understood as a limit on how much money can be deducted from a home allowance for work. There is a compelling argument for either creating a new deduction for home office expenses or increasing the standard deduction limit for those who work from home.
While helping those who work from home, a lump-sum deduction for home office expenses will also represent minimum governance and ease of compliance for taxpayers, with no additional obligation to keep supporting paperwork.
While helping those who work from home, a lump-sum deduction for home office expenses will also represent minimum governance and ease of compliance for taxpayers, with no additional obligation to keep supporting paperwork.
A look at India's external sector
- Even during difficult times of the lockdown, the current account moved into surplus in Q1 of 2020-21
- Capital flows have been strong and India has a healthy balance of payments surplus, resulting in accumulation of foreign exchange reserves of $634 billion
Just In: Union Finance Minister Nirmala Sitharaman arrives at the Ministry of Finance.
Will Sitharaman have anything for India's aspiring homeowners?
The threat of Covid continues to cast gloom on the real estate sector's bright prospects. As a result, the expansion and continuance of demand-side policies such as tax breaks and incentives for homebuyers would only enhance the real estate sector's fundamentals.
Completed projects continue to be preferred by home buyers because they result in cheaper tax bills and avoid the possibility of delivery delays. A time-limited GST exemption for under-construction developments will give potential homebuyers a greater range of options while keeping taxation on level with completed projects.
Completed projects continue to be preferred by home buyers because they result in cheaper tax bills and avoid the possibility of delivery delays. A time-limited GST exemption for under-construction developments will give potential homebuyers a greater range of options while keeping taxation on level with completed projects.
The spectre of inflation
- CPI inflation remains in tolerance band at 5.6%
- WPI inflation is back up in double digits (partly due to low base last year)
- Need to be concerned, especially about imported inflation due to energy prices
Finance Minister Nirmala Sitharaman will present an inclusive budget, in line with each and every sectors' needs. It will be benefiting everyone...All sectors (including farmers) should have expectations from today's budget.
- MoS finance Pankaj Chaudhary
Just In: MoS finance Pankaj Chaudhary and Bhagwat Karad arrives at the Ministry of Finance
More on India's fiscal performance
"Deficit numbers show that fiscal deficit for April to November 2021 is not only below what it was for the same period last year, but also below what it was in pre-Pandemic phase in nominal terms," said the Principal Economic Advisor.
Here's how India earns money
- Borrowings and taxes major source of government’s earnings: In 2021-22, while the net tax revenue of the government formed 44.37% of its total receipt, borrowing was the second-biggest source of revenue at 43.26%. Besides this, the government also generates revenue from non-tax sources and via capital receipts.
- The GST boost: GST has become the biggest source of the government's indirect tax collection. In 2021-22, over 57% of the indirect tax collection came from GST.
- ‘Business’ ventures: The non-tax resources are classified into three categories -- currency, coinage and mint; interest receipts, dividends and profits and other non-tax receipts such as revenue from various government activities and services such as administrative services, public service commission, police, jails, agriculture and allied services. Numbers: Non-tax revenue was expected to be Rs 2,43,028 crore in the 2021-22 Budget, an annual decrease of 14% over the actuals for 2019-20.
- Disinvestment: A large portion of the capital receipts of the government is fuelled by revenue generated from disinvestments. In 2020-21, finance minister Nirmala Sitharaman announced that the government will complete the disinvestment of Air India, Bharat Petroleum Corporation Limited, and IDBI Bank. On 8 October 2021, Air India was sold for ₹18,000 crore ($2.4 billion) to Talace Private Limited, a Tata Sons' SPV.
India's fiscal performance
"There has been a very sharp increase in both tax and non-tax revenues. This is great because it supports capital expenditure, which too is above pre-pandemic level," said the Principal Economic Advisor Sanjeev Sanyal.
Demand drivers of real GDP growth
- Govt consumption has been reasonably strong, but private consumption still lags behind pre-Pandemic levels
- Exports have been major growth driver and imports too are strong
- GDP is 1.3% above pre-pandemic level
Real GVA growth by sector
- Agriculture sector is now little short of 8% above pre-Pandemic levels
- Industrial sector contracted, revived, now ~4.1% above pre-pandemic levels
- Services sector is yet to reach pre-pandemic level
How did Dalal Street react to yesterday's Economic Survey?
- On Monday, equity benchmarks notched up solid gains on Monday after a two-session sliding streak as healthy growth projections in the Economic Survey and supportive global cues enthused investors.
- The 30-share BSE Sensex clocked a gain of 813.94 points or 1.42% while the broader NSE Nifty rallied 237.90 points or 1.39% to end at 17,339.85.
Threat of Omicron
- The Omicron variant was sweeping the world, inflation had jumped up in most countries, and the cycle of liquidity withdrawal was being initiated by major central banks
- This is why it is especially important to look at India’s macro-economic stability indicators and their ability to provide a buffer against the above stresses
Trend in Centre's Debt-GDP ratio
- The Centre's total liabilities, as a ratio of GDP, which were relatively stable over the past decade have risen sharply in 2020-21
- This increase is on account of higher borrowing resorted to due to the Covid-19 pandemic as well as sharp contraction in the GDP
- The Debt-GDP is however expected to follow a downward trajectory in the upcoming years
The making of an election budget
The government will look at every vote bank and none will be left behind.
There will be something for industries, something for agriculture, something for small industries, something for services. There will be an attempt to cover the entire gamut of people and therefore it will be a soft budget.
It will not be a tough budget attempting to get fiscal discipline back on track.
There will be something for industries, something for agriculture, something for small industries, something for services. There will be an attempt to cover the entire gamut of people and therefore it will be a soft budget.
It will not be a tough budget attempting to get fiscal discipline back on track.
What's on the Finance Minister's mind this fine morning? Elections, Omicron or the Fed
The overwhelming issue which forms the background is the state elections, especially the Uttar Pradesh elections. This is going to be a more important determinant of the Budget and Omicron than the global conditions than the quantitative easing issue in the United States.
More important than all of these is the fact that they are really worried about Uttar Pradesh.
here really is a feeling that BJP cannot even afford a narrow win, it must have a good win and so to that extent, I would expect this Budget to be tailored very significantly for making sure of electoral victory.
That means they would not go for any radical changes in this Budget because radical changes will produce some losers in the short run, even if there are a lot of gainers in the long run. So, instead of going for radical changes, they will have small incremental changes.
- Swaminathan Aiyar
More important than all of these is the fact that they are really worried about Uttar Pradesh.
here really is a feeling that BJP cannot even afford a narrow win, it must have a good win and so to that extent, I would expect this Budget to be tailored very significantly for making sure of electoral victory.
That means they would not go for any radical changes in this Budget because radical changes will produce some losers in the short run, even if there are a lot of gainers in the long run. So, instead of going for radical changes, they will have small incremental changes.
- Swaminathan Aiyar
Hope FM gives us a booster dose of incentives to overcome pandemic impact on our economy! We need to spur consumption n revive travel, tourism n hospitality. Common man needs more disposal income to combat inflation.
- Kiran Mazumdar-Shaw
Will Section 80C limit go up in the budget?
- Most mutual fund investors are waiting to see whether the finance minister would raise the Section 80C limit in this year’s budget. Section 80C allows taxpayers to make certain investments and claim tax deductions of up to Rs 1.5 lakh in a financial year. Popular investment options under Section 80C are Public Provident Fund, National Savings Certificate, Equity Linked Savings Schemes among others.
PLI ploy
- Food processing and exports are two areas that could see more production-linked incentives, two senior government officials said, adding no major budget changes were likely on individual and corporate taxes, in view of rising government debt and subdued private investments.
Make Budget session fruitful, says PM Modi
- Prime Minister Narendra Modi on Monday urged all MPs to make the Budget session of Parliament fruitful by holding discussions with an “open mind” and making sure that the ongoing assembly elections do not affect the session, which is very important as it draws a blueprint for the entire year. Addressing the media just before the start of the session, PM Modi said that it is true that because of frequent elections, sessions and discussions get affected but elections have their own place and will keep happening, and hoped that there are discussions that are free, thoughtful, full of human sensitivities, and with good intent.
US firms keenly watching
- American companies having a foothold in India and those planning to expand their business in the fastest growing economy of the world expect “tax parity” in the annual budget to be tabled by Finance Minister Nirmala Sitharaman, the head of a top India-centric US business advocacy group said.
17 states have pre-published draft rules for labour reforms, says Economic Survey 2021-22
- Labour reforms are progressing steadily as at least 17 states have pre-published draft rules for four labour codes on wages, social security, industrial relations and occupational safety, health and working conditions (OSH), according to the Economic Survey 2021-22, tabled in Parliament on Monday.
Pain points
- Policymakers are worried that private consumption, which makes up nearly 55% of GDP, is still below pre-pandemic levels amid rising levels of household debt, while retail prices have increased by nearly 10% since the coronavirus outbreak began in early 2020.
Budget likely to spur spending to support economic growth
- India is likely to step up spending on infrastructure, health services and social programmes in its annual budget on Tuesday, to try to set the economy on a firmer footing as it fights a spike in COVID-19 cases and rising inflationary pressure.
- The strong revival in revenue receipts, which rose 67% during April-November period from a year earlier implied that the government has a "fiscal space to provide additional support if necessary", Sanjeev Sanyal, principal economic adviser at the finance ministry told reporters on Monday.
No legislative business in 1st part of Budget session
- With only 10 sittings of Parliament possible until February 11, the concluding day of the first part of the Budget session, the government has said no legislative business will be taken up in both Houses of Parliament during this period. This was conveyed to floor leaders of all parties by the government during a virtual meeting convened by Rajya Sabha Chairman M Venkaiah Naidu.
Once-in-a-Century Budget
- Nirmala Sitharaman on February 1, 2021 presented what she called was 'once-in-a-century budget' as it looked to revive Asia's third-largest economy via investing in infrastructure and healthcare while relying on an aggressive privatisation strategy and robust tax collections.
What corporates seek from budget 2022
- An online survey conducted by The Times of India (TOI) and professional services firm Deloitte showed the majority of respondents (30.4 per cent) want the government to adopt steps to improve ease of doing business in India in the upcoming budget 20
Which sector will emerge as the biggest beneficiary of the budget?
'GDP growth forecast reflects the resilience'
- Sanjeev Krishan, the chairman of PwC India said the survey pegs real GDP growth forecast reflects the resilience that is built in through major supply-side structural and process reforms even as it acknowledges the prevailing uncertainty and the slippery slope ahead.
Can Budget 2022 deliver on these railway reforms?
- Private entry, to offer competition and better services.
- Accounting reforms, to ensure costs and profitability numbers are transparent.
- An independent regulator.
- Devolution of decision-making, away from a centralised structure in Rail Bhawan.
- HR reform, which means not only the structure of Railway Board, but unification of services prospectively.
The Economic Survey has re-emphasised the government's asset monetisation and disinvestment agenda, which spells out bare minimum presence of government ownership even in the strategic sectors. Successful completion of Air India disinvestment should infuse confidence for the roadmap
- Deepak Sood, ASSOCHAM Secretary General
Focus on jobs
- With the imperative to support jobs and create new employment as the country recovers from the pandemic, CII suggests that the Budget add a job-creation component to the incentive.
- CII also recommends that more employment-intensive sectors be brought under the purview of the PLI schemes which will greatly encourage investments in these sectors," CII Director General Chandrajit Banerjee said.
- The incentives could be based on the proposed number of jobs being created in the project, giving higher weightage to job creation in the PLI schemes, said CII.
What edtech firms want
- 'The Budget should prioritise scaling up allocation to the edtech sector by 7-8% from 2021. In addition, rationalising 18% GST in online education services would go a long way in making e-learning more affordable and realising its benefits.'
