Budget allocation and implications

Not a political budget, it aims to secure foundation for future growth by focusing on infrastructure

Devyani Gupta and Tushar Rajvanshi | February 3, 2022


#Budget   #economy   #taxation   #Nirmala Sitharaman   #infrastructure   #education   #healthcare  
(Illustration: Ashish Asthana)
(Illustration: Ashish Asthana)

The union budget for 2022-23, presented by finance minister Nirmala Sitharaman in parliament Tuesday, has been described as growth-oriented. In Prime minister Narendra Modi’s words, “This year’s budget will facilitate more infrastructure, more growth, and more jobs.”

The budget focuses primarily on four pillars: productivity, financing investments, climate action, and PM Gati Shakti plan. The budget expenditure has increased sharply by 35.4%, i.e., Rs. 7.50 lakh crore, to attract more private investment and growth into the Indian economy.

The effective capital expenditure of the government is estimated to be Rs. 10.68 lakh crore.

The sector-wise budget allocation goes as follows:

1.    Healthcare: This sector saw an increment of 16% as compared to last year’s allocation. Last year the amount allocated was Rs. 73,931 crore whereas this year it is Rs. 86,200.65 crores. Further, this amount is divided into Rs. 83,000 crore which are allocated to the Department of Health and Family welfare and the remaining Rs. 3,200.65 crore have been allocated to the Department of Health Research.

•    Implication: With the Covid-19 situation revamping itself every year, the allotted budget will help in making the hospitals more prepared for the situations to come whereas, the Department of health research can use this amount to bring more viable vaccines or vaccines that can be given to children of all age groups.

2.    Central sector schemes and projects: This year’s budget for this sector is Rs. 15,163 crore, compared to previous year’s Rs. 10,566 crore. Among them, the Pradhan Mantri Swasthya Suraksha Yojana has received Rs. 10,000 crore, while the National Digital Health Mission has received Rs. 200 crore in the budget.

•    Implication: The budget will help the economy make a hold on the existing schemes and help them grow more effectively.

3.    Autonomous bodies: The budget allocation for this sector is Rs. 10,022 crore as compared to the previous year's Rs. 8,566 crore.

•    Implication: Autonomous bodies such as AIIMS and All India Institute of Speech and Hearing will be able to provide better to the country in terms of research and young talent with the help of the budget. The government has revamped the schemes of the Ministry of Women and Child Development. This ministry saw a rise of 3% in the budget as compared to last year. This year’s budget is Rs. 25,172.28 crore.

The major highlights apart from budget allocation are:

1.    The economic growth for this year has been predicted at a 9.2% rate

2.    RBI will soon introduce digital currency via Blockchain and other technology; any sort of income from virtual assets will be taxed at 30%. Any losses from crypto cannot be set off. The recipient to whomever the crypto is gifted will have to pay 30% tax while filing the income tax return

3.    Sovereign Green Bonds will soon be issued to mobilize resources

4.    The fiscal deficit for this year has been marked at 6.4% of the GDP

5.    Tax benefits for existing start-ups will be increased by one more year. Earlier it was for three years

6.    For both state and central government employees, the tax deduction limit has been increased to 14% from the previous 10% to help the social security benefits of state government employees and bring them on an equal level with central level employees.

7.    1-class-1-TV system to be introduced for classes 1 to 12

8.    E-Passports to be ruled out this year

9.    ITR filing can be updated in two years

This year’s budget has been termed as futuristic and growth-oriented considering its focus is majorly on building more infrastructure, bringing in more investments, and so on. FM Sitharaman has kept the state budgets too in mind.

Though this budget is highly appreciated by many, it is also highly derogated by people, the primary reason being that no relief has been granted to the taxpayers.

This year’s budget is not politically motivated but aimed for future growth. India is shifting its focus from importing to exporting which can become a major source of revenue for India.

The authors did their BBA (Hons) from Bennett University. Devyani is a research assistant and prepping for her post-graduation. Tushar is a trainee at Uneecops Technologies Ltd.

 

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