Union Budget 2022-23: Complete Analysis, Highlights & Implications

The Union Budget, also known as the Annual Financial Statement, is a crucial financial document of the Government of India. It is usually presented by the Union Finance Minister in February each year. This page aims to provide a comprehensive understanding of the Union Budget 2022-23, which is a significant topic for the UPSC exam .

A Closer Look at the Union Budget

The Union Budget, as mandated by Article 112 of the Constitution of India, is a statement of the estimated expenditure and receipts of the Government for a particular fiscal year, which runs from 1st April to 31st March. Here are some key aspects of the Union Budget:

The Budget is presented on 1st February (until 2016, it was presented on the last working day of February) to allow it to take effect before the start of the new financial year on 1st April.
In 2017, a 92-year-old tradition was broken when the railway budget was merged with the Union Budget.
The Budget must be approved by the Lok Sabha to come into effect.
The Union Budget is divided into Revenue Budget and Capital Budget. To understand these terms better, check Union Budget – Important Economic Terms .
The Union Budget comprises the disbursements and receipts of the government, including the various types of government funds in India namely, the Consolidated Fund of India, the Contingency Fund, and the Public Account.
The Economic Survey of India is released before the presentation of the Budget.

UPSC Beginners Program

Get UPSC Beginners Program - 60 Days Foundation Course SuperCoaching @ just

₹50000₹0

🪙 Your Total Savings ₹50000

Want to know more about this Super Coaching ?

People also like

Public Administration optional by Rahul Sharma Sir

₹30000(59% OFF)

₹12500 (Valid for 15 Months)

Hindi Literature Optional (UPSC Mains) by Prachi Choudhary Ma'am

₹33000(73% OFF)

₹9000 (Valid for 15 Months)

PSIR Optional (UPSC Mains) by Kiran Anishetty Sir

₹30000(40% OFF)

₹18000 (Valid for 15 Months)

Key Highlights of the Union Budget 2022 for UPSC

The Union Budget 2022-23 strives to balance macro-economic growth with micro-economic welfare. It lays the groundwork for steering the Indian economy towards 'Amrit Kaal' over the next 25 years, transitioning from India at 75 to India at 100. The budget focuses on four pillars:

PM GatiShakti
Inclusive Development
Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition, and Climate Action
Financing of Investments

Key Economic Indicators in Union Budget 2022-23

Economic Indicators	Analysis
Growth estimates	9.2 percent expansion in GDP in FY22 8−8.5 percent projected GDP growth for FY23
Deficit	The revised Fiscal Deficit in the current year is estimated at 6.9 percent of GDP. The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP.
Capital expenditure	The outlay for capital expenditure has been increased by 35.4 per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in 2022-23.
Repo rate	RBI has kept the repo rate unchanged at 4 percent since May 2020; it continues with an accommodative monetary policy stance.
FDI	Net FDI inflows amounted to US$ 24.7 billion for April−November 2021, 29.5 percent lower than those for April−November 2020.
Inflation	CPI averaged at 5.2 percent in April−December 2021, driven primarily by food inflation and high fuel prices.
Merchandise exports	Merchandise exports expanded by 49.7 percent to US$ 301.4 billion in April−December 2021, exceeding the pre-pandemic levels.

Significant Announcements in Different Sectors in the Union Budget 2022-23

Sector	Highlights
Infrastructure	PM Gati Shakti National Master Plan at a cost of ₹20,000 crore 5G spectrum auctions to be conducted in 2022 Scheme for design-led manufacturing for 5G will be part of the production-linked scheme Contracts to be awarded for laying optical fibre in rural areas, to be completed in 2025 Additional 195 billion rupees to be allocated for production-linked incentives towards solar equipment manufacturing
Education	Digital University will be established based on a networked hub model. One Class, One TV channel will be expanded from 12 to 200 TV Channels to provide supplementary education in all regional languages.
Health	National Digital Health Ecosystem to be rolled out. National Tele Mental Health program to be set up to focus on mental health. 23 tele mental health centres of excellence. Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
Agriculture	Domestic scheme introduced to reduce dependence on oilseed imports NABARD to facilitate funds with blended capital to finance startups for agriculture & rural enterprise. Chemical-free, natural farming to be promoted across the country. 2022 to be Year of Millet – support for post-harvest value addition for millet products Use of Kisan drones for crop assessment and pesticide spraying
Defense	Budget 2022-23 would give a push to self-reliance in defence production as part of the Atma Nirbhar Bharat initiative. The 68 per cent capital procurement budget in the sector was earmarked for domestic procurement. Encourage private industry to take up the design and development of military platforms and equipment.
Finance	Long term capital gain surcharge to be capped at 15% Emergency credit line guarantee scheme for small and medium-sized businesses to be extended to March 2023 Public issue of Life Insurance Corporation expected shortly To amend bankruptcy code to speed up the resolution process
Railways	As part of the PM Gatishakti Masterplan, 2,000 kilometres of railway network will be brought under Kavach. Also, 400 new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.
MSMEs	Raising and Accelerating MSME Performance (RAMP) programme will be rolled out with a Rs 6,000 crore outlay spread over 5 years for MSMEs. The Emergency Credit Line Guarantee Scheme (ECLGS) that provided much needed additional credit to over 1.3 crore MSMEs will be extended till March 2023 with its guarantee cover expanded by Rs 50,000 crore to Rs 5 lakh crore.

Major Policy Highlights of Union Budget 2022-23

Policy	Analysis
Multimodal Connectivity	Enhance multimodal connectivity through the expansion of roadways by 25,000 km Inclusion of 2,000 km of rail network under indigenous technology Develop eight ropeway projects and 100 cargo terminals
International Arbitration Centre	International Arbitration Centre to be set up; and foreign universities permitted to operate in GIFT City .
Amendments to the Insolvency and Bankruptcy Code	To enhance the resolution process, including for cross-border insolvency. To establish a centre to reduce the process of voluntary winding up of companies to six months
Digital Rupee	Launch of digital rupee using blockchain and other technologies in FY22-23 Scheduled Commercial Banks to set up 75 digital banking units Extend the core banking system to post offices
Tax on Virtual Digital Assets	All virtual digital assets will be taxed at 30 per cent rate, while digital gifting will also be charged per the same rates on the receiver’s end.
Committee to govern different processes	A committee or task force to be set up for urban planning, augmenting the Animation, Visual Effects, Gaming, and Comic sector, and reviewing the regulatory framework governing venture capital and private equity investments
5G spectrum	5G spectrum auction proposed in FY22 along with the launch of a design-led manufacturing scheme (as part of the PLI scheme ); Contracts to be awarded for laying optical fibre in remote areas through Public-Private Partnership
Data centres	Infrastructure status accorded to data centres and energy storage systems to facilitate credit availability
Green Bonds	Issuance of sovereign green bonds which will help reduce carbon intensity Set-up of government-backed funds for climate action, tech-based and agricultural initiatives
Battery swapping policy	Battery swapping policy and interoperability standards to be formulated Additional INR 195 billion to be allocated to PLI for manufacturing solar PV modules
Emergency Credit Line Guarantee Scheme for MSMEs	The Emergency Credit Line Guarantee Scheme for MSMEs extended up to March 2023 with an additional guarantee cover of INR 500 billion for hospitality and related enterprises
Special Economic Zone Act	Special Economic Zone Act to be replaced with new legislation to enable the States’ partnership in the development of enterprise and service hubs, optimally utilise the available infrastructure, and enhance export competitiveness
PLI scheme	Production Linked Incentive (PLI) Scheme of the Centre has the potential to create 60 lakh new jobs during the next five years. A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the PLI scheme. For facilitating domestic manufacturing, an additional allocation of Rs 19,500 crore for PLI scheme for manufacturing of high efficiency (solar) modules.
Empowerment of women	Schemes such as Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0. Allocation of Rs 60,000 crore will be made under ‘Har Ghar Nal Se Jal’ scheme to cover 3.8 crore households in 2022-23.
PM GatiShakti	PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency. To facilitate better movement of people and goods, The National Highways Network will be expanded by 25,000 km in FY23 400 new gen Vande Bharat trains to be manufactured in the next 3 years Railways will develop new products and logistic services for small farmers and MSMEs ‘One Station- One Product’ concept will be promoted to help local businesses and supply chains built on a hub and spoke model 2,000 km of network to be brought under a new scheme, Kavach – for safety and capacity augmentation

Tax Highlights of the Union Budget 2022-23

Factor	Analysis
Income tax	No change to corporate or personal income tax rates
Revised Income Tax return policy	Taxpayers now have a two-year window to correct errors and file a revised income tax return for the relevant assessment year
Tax holiday	Tax holiday extended for start-ups incorporated up to 31 March 2023 and for new manufacturing companies commencing operations by 31 March 2024
surcharge or cess	Retrospective amendment to deny the deduction of any surcharge or cess paid on income and profits
Virtual digital assets (VDA):	Gains taxed at 30 percent; deduction allowed only for the cost of acquisition; Benefit of set-off and carry forward of losses not available; Deemed gift tax provisions to apply; tax deduction at source (TDS) at 1 percent introduced.
International Financial Services Centre (IFSC)	Income-tax exemption expanded to, inter alia, specified income of non-resident from lease of a ship to IFSC units; Income of a nonresident from the transfer of specified derivative instruments
Concessional tax regime	Concessional tax regime on foreign-sourced dividends to be withdrawn from FY22
Alternate minimum tax	Cooperative societies pay 18.5% alternate minimum tax and companies pay 15%. From now on the cooperatives too will have to pay only 15%

Related Links
UPSC Mains Exam	Government Exams
NCERT Notes	Consumer Protection Act
Union Budget 2021	Taxation in India

Download the Testbook App,

Union Budget 2022-23: Complete Analysis, Highlights & Implications

A Closer Look at the Union Budget

UPSC Beginners Program

People also like