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
- 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.
- 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.
- 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.
- 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.
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