Last Updated on Sep 8, 2022 by Aradhana Gotur

Finance Minister Nirmala Sitharaman presented the Budget 2022 on 1 February. In the face of persistent global headwinds and economic uncertainty, she prioritised growth above fiscal reduction for the second year in a row. Which she intends to achieve by dramatically increasing capital and infrastructure investment in the Union Budget for the fiscal year beginning 1 April.

To boost economic ambitions, Sitharaman advocated raising the amount of the economy’s yearly spending to Rs. 39.5 tn.

Highlights

  • Venture capital and private equity investment last year helped in facilitating one of the largest start up growth systems.
  • Government backed funds and funds of funds have helped as a multiplier.
  • The outlay for capital expenditure in the union budget is once again being stepped up sharply by 35.4% from Rs. 5.54 lakh cr. in the current year, to Rs. 7.50 lakh cr. in 2022-2023
  • This outlay in 2022-2023 will be 2.9% of the GDP.
  • As a part of the government’s overall market borrowings in 2022-2023, Sovereign Green bonds will be issued for mobilising resources for green infrastructure.
  • The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
  • The central government will support the states in enhancing their capital investment towards creating productive assets and generating remunerative employment. 
  • For 2022-2023, the allocation is Rs. 1 lakh cr. to assist the states in catalysing the overall investments in the economy.
  • Total expenditure in FY 2023 is estimated at Rs. 39.45 tn., total resources mobilisation will be at Rs. 22.84 tn. other than borrowings.

Let us now look at some sector-specific announcements.


Defence

  • The government is committed to lowering defence imports and boosting AtmaNirbharta in military equipment.
  • The Ministry of Defence has been given a budget of Rs. 5.25 lakh cr., which is 13.31% of the entire budget.
  • This includes a sum of Rs. 1.19 lakh cr. for military pensions. 
  • The entire Defence Budget reflects a 9.82% increase above the Budget Estimates 2021-2022.
  • The Government has placed modernization and infrastructure development of the Armed Forces at the centre stage of the National Security and Defence Planning process.

Infrastructure and Telecom

  • The PM Gati Shakti National Master Plan was announced with the goal of improving logistical linkages.
  • Rs. 480 bn. set aside for affordable housing in 2022-2023.
  • 5G spectrum auctions to be conducted in 2022.
  • Scheme for design-led manufacturing for 5G will be part of the production-linked scheme.
  • To award contracts to lay optical fibre in rural areas, completion in 2025.
  • Allocated additional Rs. 195 billion rupees for production-linked incentives towards solar equipment manufacturing.

Agriculture

  • Fund with blended capital raised under co-investment model to finance agriculture startups.
  • Railways to develop infrastructure for small farmers in 2022-2023.
  • The government will push chemical-free farming as well as the usage of ‘Kisan Drones’ for crop evaluation. 
  • The National Bank for Agriculture and Rural Development (NABARD) will finance agricultural and rural enterprise start-ups, which will include inter-area assistance for farmer-producer organisations, farm-level machinery for rent, and technology with an invitee base.
  • A suggestion on methods to promote chemical-free natural farming, as well as upgrading agricultural university curriculum to fit the needs of natural, organic farming, and modern-day agriculture, has been prepared. 
  • A proposal to develop a streamlined and comprehensive strategy to boost local production of oilseeds and minimise reliance on imports has been proposed. 
  • In terms of taxes, a statement is also made regarding the revision of concessional customs duty rates on capital items.

Transport

  • 400 energy efficient trains to be manufactured over the next three years.
  • National highways network to be expanded by 25,000 km in 2022-2023.
  • Highway expansion to cost Rs. 200 bn. in 2022-2023.
  • A plan for expressways will be developed to allow for speedier mobility of people and products.
  • Railways will provide new goods and logistical services for small farmers as well as small and medium-sized businesses.

What are your thought on Union Budget 2022? Let us know in the comment section below.

Ayushi Mishra
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