The 2022 Union Budget prioritized digital advancements, technology, and essential sectors such as infrastructure, healthcare, education, and public e-services. This budget established a long-term economic strategy for India's "Amrit Kal," envisioning the nation's progress over the next 25 years, from its 75th to its 100th year of independence. India demonstrated remarkable economic resilience with a 9.2% GDP growth, leading global economies. Despite the Omicron variant challenges, the rapid vaccination drive significantly contributed to managing the pandemic. The Finance Minister emphasized continued collective efforts ("Sabka Prayaas") to sustain robust growth. The 2022 Budget notably increased public investment and capital expenditure. Furthermore, the government finalized the strategic divestment of Air India. Learn more about previous and future budget summaries: Budget 2023 Highlights | Budget 2021 Highlights

For those seeking comprehensive details, an official Budget 2022 Highlights PDF is available.

Key Provisions of Budget 2022

Direct Taxes and Income Tax Measures

• A new provision enables taxpayers to file an updated return within two years from the end of the relevant assessment year, allowing them to declare omitted income with an additional tax payment.
• Tax incentives for eligible startups incorporated under Section 80-IAC have been extended by one year, now applying until March 31, 2023.
• The corporate surcharge rate will be reduced from 12% to 7%.
• For co-operative societies, the Alternate Minimum Tax (AMT) will be lowered to 15%.
• Income generated from the transfer of digital assets, including cryptocurrencies, will be taxed at 30%. No deductions will be permitted except for the cost of acquiring these assets. Losses incurred from selling digital assets cannot be offset against other income sources. A 1% TDS will be applied above a specified threshold. Gifting digital assets will also result in taxation for the recipient.
• To harmonize benefits for central and state government employees, the Finance Ministry proposed increasing the employer's contribution threshold to the National Pension Scheme (NPS) Tier-I account from 10% to 14%.
• Parents or guardians of differently-abled individuals can claim a tax deduction for annuity or lump sum payments made during their lifetime, once the parent or guardian reaches 60 years of age.
• Any surcharge or cess levied on income is not permissible as a business expenditure.
• Brought forward losses cannot be adjusted against undisclosed income discovered during any survey or search operations.

Indirect Taxes: GST and Customs Reforms

• Significant amendments to Sections 16, 34, 37, 39, and 52 of the Central Goods and Services Tax Act have been introduced. The deadline for making amendments, correcting errors, uploading missed sales invoices or notes, or claiming any missed Input Tax Credit (ITC) for a financial year is now November 30th of the following year, replacing the previous September return due date.
• Section 29 of the CGST Act, concerning the cancellation of GSTIN by an officer, has been modified. A composition taxable person's registration can be canceled if they fail to file an annual return for three months beyond the due date (April 30th of the following year). For other taxpayers, the previous condition of six months of consecutive default in return filing is replaced with a consecutive tax period default as prescribed.
• Section 38, formerly related to the furnishing of inward supplies, has been completely revised. It now removes references to the old GSTR-2 and substitutes them with GSTR-2A and GSTR-2B, under the new heading "Communication of details of inward supplies and input tax credit."
• The due date for Non-Resident taxable persons to file GSTR-5 has been changed from the 20th to the 13th of the subsequent month.
• Sections 42, 43, and 43A, which dealt with the matching and reversal of tax credits, have been eliminated.
• January 2022 saw a record collection of Rs 1,40,986 crore in gross GST revenues, marking the highest since GST's implementation.
• Concessional customs duty on imported capital goods will be gradually eliminated, with an initial rate of 7.5% to be imposed.
• Over 350 import exemptions for certain agricultural products, chemicals, and drugs will be phased out.
• Duty concessions on imported phone chargers and transformers aim to promote domestic manufacturing.
• Customs duty on imitation jewelry was increased to curb imports.
• Duties on specific leather products and packaging boxes were reduced to encourage exports.
• Customs duty on cut and polished diamonds and gems will be lowered to 5%.
• The customs duty exemption on steel scrap has been extended by one year to support MSMEs.
• Customs duty on methanol will be reduced.
• An additional excise duty of Rs 2 per liter will be levied on unblended fuel to incentivize fuel blending.

Budget Allocation Overview

• A fiscal deficit of 6.4% is projected for India in FY23.
• The revised fiscal deficit is estimated at 6.9% of GDP.
• States will receive Rs 1 lakh crore as 50-year interest-free loans to support PM Gati Shakti-related investments.
• The government's effective capital expenditure for 2022-23 is estimated at Rs 10.68 lakh crore, approximately 4.1% of GDP.
• The outlay for capital expenditure will be significantly increased by 35.4%, from Rs 4.54 lakh crore to Rs 7.50 lakh crore in 2022-23.

Initiatives in Education

• Two lakh Anganwadis will be upgraded to enhance child health services.
• Recognizing two years of educational setbacks for schoolchildren, increased efforts and spending are necessary to close learning gaps. While still short of the National Education Policy's recommendation of 6% GDP allocation to education, the budget's announcements for 'One class, one TV channel' under the PM eVIDYA program and the establishment of a digital university address pressing needs.
• A digital university will be established for online education, focusing on Information and Communication Technology (ICT) through a hub-and-spoke model.
• Selected ITIs across all states will offer specialized skilling courses.
• The 'One class, one TV channel' program of PM eVIDYA will expand from 12 to 200 TV channels, enabling all states to deliver supplementary education in regional languages for students from classes 1 to 12.

Startup Ecosystem Support

• Defence Research & Development (R&D) will be made accessible to industry and startups.
• Startups will be encouraged to promote 'drone shakti' to facilitate wider drone usage across various applications.

Agriculture Sector Focus

• The government will promote funds for blended finance, with the government share capped at 20%, targeting emerging opportunities like climate action and agri-tech.
• A fund will be facilitated through NABARD to finance startups in agriculture and rural enterprises, specifically those relevant to the farm produce value chain. These startups will support Farmer Producer Organizations (FPOs) and provide technological solutions to farmers.
• The use of Kisan Drones will be encouraged for crop assessment, digitization of land records, and the spraying of insecticides and nutrients.
• Procurement of wheat in the Rabi season 2021-22 and estimated paddy procurement in the Kharif season 2021-22 will cover 1208 lakh metric tonnes from 163 lakh farmers, with direct MSP payments totaling Rs 2.37 lakh crore to their accounts.
• Hi-tech services for farmers will be launched.
• Minimum Support Price (MSP) payments will be directly transferred to farmers' bank accounts.
• Chemical-free natural farming will be promoted throughout India.

Investment and Sectoral Allocations

• The regulatory framework for venture capital will be reviewed, and an expert committee will be established.
• PM Development Initiatives for the Northeast will be implemented through the North Eastern Council, aiming to create livelihood activities for youth and women. This scheme supplements existing central and state programs.

Virtual Currency and Digital Rupee

• The Reserve Bank of India (RBI) is set to introduce a digital rupee utilizing blockchain technology, commencing in 2022-23.

Support for MSMEs

• The next phase of initiatives for ease of doing business and living will be rolled out.
• To aid sectors heavily impacted by the pandemic, the Emergency Credit Line Guarantee Scheme (ECLGS) has been extended until March 2023. This measure is crucial for MSMEs, which constitute nearly 95% of ECLGS borrowers, and for the services sector, which is vital for economic growth and job creation.
• Experts view the ECLGS extension as a critical step that will significantly boost lending to the MSME sector. Concurrently, the revamp of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTSME) will further incentivize banks to extend credit.
• The government implemented measures to enhance MSME resilience and competitiveness.
• The ECLGS successfully supported 130 lakh MSMEs in mitigating the severe effects of the pandemic.

e-Vehicles and Energy Transition

• Measures promoting energy efficiency and savings will be advanced.
• A new battery-swapping policy, incorporating interoperability standards, will be introduced to accelerate the Electric Vehicle (EV) ecosystem.
• The Finance Minister announced an allocation of Rs 19,500 crore under the Production Linked Incentive (PLI) scheme for solar modules.

Digital Banking Advancements

• An online bill system will be launched across all central ministries to expedite payment processing.
• Credit growth reached Rs 5.4 lakh crore this year, representing the highest increase in many years.

Internet Connectivity Expansion

• The 5G spectrum auction is scheduled for 2022-23.
• Contracts for optical fiber networks under the Bharatnet project will be awarded through a Public-Private Partnership (PPP) model.
• The goal is to ensure all villages have digital resource access comparable to urban areas.

Defence Sector Boost

• 68% of the capital procurement budget for defence in 2022-23 will be allocated to the domestic industry.

Introduction of e-Passports

• The issuance of e-passports, featuring futuristic technology, will begin in 2022-23.
• First announced in 2019, these e-passports are expected to offer quick readability (within seconds), have thicker covers, and incorporate a small silicon chip on the back. The chip will feature 64 kilobytes of memory to store the holder's photograph, fingerprints, and data for up to 30 visits.
• States will receive support for urban capacity building.

Healthcare Initiatives

• An open platform for the National Digital Health Ecosystem will be rolled out. This platform will encompass digital registries of health providers and facilities, unique health identities, and universal access to healthcare services.
• Acknowledging the mental health challenges highlighted by the pandemic, a national tele-mental health program will be launched.

Infrastructure, Roadways, Railways, Waterways, and Logistics

• New railway products, including "One Station – One Product" initiatives, 400 next-generation Vande Bharat trains, and 100 PM Gati Shakti cargo terminals over the next three years, signify the integration of the National Infrastructure Pipeline (NIP) with Gati Shakti. These are anticipated to be crucial for employment generation due to the transport network's extensive forward and backward linkages within the economy.
• Draft Detailed Project Reports (DPRs) for five river interlinking projects have been finalized.
• 400 Vande Bharat trains, designed for higher passenger efficiency, will be developed over the next three years.
• The Budget emphasizes public investment to modernize infrastructure over the medium term, utilizing the Gati Shakti technological platform through a multi-modal approach.
• Contracts for four multi-modal national parks will be awarded in FY23.
• The PM Gatishakti master plan for expressways will be formulated in the upcoming financial year.
• The scope of the PM Gatishakti master plan will extend to encompass the seven engines of economic transformation.

Housing and Basic Amenities

• In 2022-23, 80 lakh households will be identified for the affordable housing scheme.
• Rs 60,000 crore has been allocated to provide tap water access to 3.8 crore households.
• The Ken-Betwa link project, with an estimated cost of Rs 44,605 crore, will be undertaken to irrigate 9.05 lakh hectares, provide drinking water to 65 lakh people, and generate hydro and solar power.

Employment Generation

• The Production Linked Incentive (PLI) Scheme, aimed at achieving "Aatmanirbhar Bharat" (self-reliant India), has garnered an excellent response, with the potential to create 60 lakh new jobs and generate an additional production worth Rs 30 lakh crore over the next five years.
• PLI schemes across 14 sectors have received significant traction, leading to the creation of 60 lakh job opportunities.

Budget 2022 Official Documents

1. Trends in Receipts | PDF
2. Analysis of Tax and Non-Tax Revenue Receipts included in Annexure 1 | PDF
3. Reconciliation between estimates of Receipts shown in Annual Financial Statement and Receipts Budget | PDF
4. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for BE 2020-2021 | PDF 4A. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for RE 2019-2020 | PDF 4B. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for Actual 2018-2019 | PDF
5. Tax Revenues raised but not realised (Principal Taxes) | PDF
6. Arrears of Non-Tax Revenue | PDF
7. Revenue impact of Tax Incentive under the Central Tax System: Financial Years 2018-19 and 2019-20 | PDF
8. Sources and Application of National Small Savings Fund as on 31st March, 2020 | PDF PART-B ASSET AND LIABILITY STATEMENTS | Download
9. Debt position of the Government of India | PDF Expenditure Budget/Profile | Download Expenditure Profile | Link Expenditure Budget | Link Demands for Grants of Central Government | Link