Sectors In Focus - Union Budget 2022

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.

Table of Contents

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.