2022 Budget: A Futuristic and Sustainable Growth Focused Budget
| 5 minutes read
- On February 1st, 2022, at 11:00 IST, Finance Minister of India, Nirmala Sitharaman, has presented the Union Budget 2022-2023 in the parliament as part of the 25-year lead-up to India’s 100-year independence.
- Union Budget 2022 aims to bind the momentum that has made India the fastest-growing economy, seeking new opportunities and boosting the green economy & tech industries.
- The government is focused on pushing a citizen empowerment agenda, opening jobs vacancies, healthcare transformation, and female empowerment.
Finance Minister Nirmala Sitharaman had represented the fiscal budget for 2022-23 in the Parliament, and after analyzing the budget, we found that the budget is majorly focussed on four pillars. Green Energy, Infrastructure, IT sector development, and digital currency. The Finance minister started her speech by reflecting on India’s journey towards its 100th Year of Independence. The following 25 years will be crucial for the nation, and she also said, “the budget will build the roadmap for the next 25 years.”
The budget had some pleasing surprises for several industries, including digital companies, MSMEs, logistics, gems and jewelry, telecom, and solar & EV players. But, unfortunately, the budget doesn’t give any relaxation to salaried class people. However, the Indian Entrepreneurs are appraising the budget and saying the budget will boost the economy and help sectors grow.
In this article, we will reveal the budget’s important parts every reader should know about the 2022 Indian Budget.
India 2022 budget highlights
Here are seven takeaways from India’s 2022 budget.
1. India is the fastest-growing large economy
While the COVID-19 Delta and Omicron-variant cost Indian lives in 2020 and 2021, the country has achieved outstanding growth and has become one of the fastest recovering economies globally. In the 2021-2022 report, India’s growth percent is 9.2%, and GDP growth will be the fastest of all significant large economies.
With the economy rallying to a size greater than pre-pandemic levels, the government aims to create six million+ jobs in 14 critical sectors over the next five years through its Productivity Linked Incentive. Sectors like hospitality, tourist, and consumer spending still lag behind the pre-pandemic figures. But in the coming months, these sectors will start to show respectable growth. Other than this, the government focused on new avenues like green energy and digital currency.
2. Introducing RBI’s digital currency
There was a lot of hype about cryptocurrencies. Still, the finance minister confirmed that Crypto would not be legal in India. She also said the government would charge 30% of the profit from digital assets, including cryptocurrency—and 1% TDS on every coin purchase.
After this, she Introduced RBI’s (Reserve Bank of India) digital currency, which we can see from Q4 or maybe next year. The digital rupee of the Central Bank will boost the digital economy of the nation.
2021 was a remarkable year for India’s tech industry, with a record 42 unicorns ($1 billion valued tech-based startups) added to the mushrooming digital economy. In the budget, it has also been said that 5G services will roll out by Q4. Airtel and Jio are the two major players in the telecom industry.
3. India is focusing on green
Indian metro and major cities are already facing some extreme weather conditions. The effects of climate change may include inflatable infrastructure and public health costs in years to come – and decrease labor productivity and workable hours.
The temperature is rising, and the glaciers are melting, which leads to an inevitable rise of water in rivers. Delhi constantly struggles with Air Pollution, and people even can’t breathe, and the worst situation comes when they wear a mask at home.
Therefore government had pushed the initiative of the green economy further. The Finance Minister presented multiple proposals and pathways to climate action across various sectors. These include raising climate finance and developing greener public transportation. Key highlights under this section from India’s 2022 budget include 280 GW of installed solar energy capacity by 2030, promotion of cleantech and clean governance solutions, and special mobility zones with zero fossil-fuel policies.
4. Digital University expansion
The education sector suffered a massive loss due to the pandemic, and children had lost two precious years of schooling. So the government has decided to launch a Digital University which will provide quality online education in multiple languages across the nation. This initiative gives many hopes to young entrepreneurs in the new field. And all the subjects will be covered in the Digital University.
The government announced duty concessions to promote the manufacturing of electronics and mobile phones through Union Budget 2022. This will help boost the ecosystem of Indian manufacturing sectors and will minimize the dependency on imports, especially from China. Coupled with Atmanirbhar Bharat and the PLI scheme, the move towards becoming the world’s manufacturing hub is not too distant.
Budget 2022 is a delicate balancing between fiscal prudence, going digital, and supporting India’s growing economic growth. However, the foundation has been laid, and as we move forward, a mix of government support, India Inc’s natural energy, and an ongoing digital thrust will make India a $5 trillion economy for sure.
6. Gems & Jewellery
There was good news for this sector. The budget slashed the import duty on diamonds and gemstones to 5% and the sawn diamond to nil from the existing 7.5%, sending waves of rejoicing among the industry.
Lauding the move, Senco Gold & Diamonds CEO Suvankar Sen said, “FM’s announcement of a reduction in customs duty on cut and polished diamonds and gemstones and plan to develop a simplified regulatory framework to facilitate the export of jewelry through e-commerce are positive steps which will enable the sector to grow in the country and boost exports. We look forward to its implementation later this year. In addition, reducing import duty on diamonds will help generate increased demand for diamond jewelry in the market.”
Overall, the gems and jewelry sector continues to play a pivotal role in futuristic and sustainable growth.
While the key FMCG players are impressed by the liberal outlook of the budget, they have some complaints about tax benefits, both for the consumers and several products that fall in the category.
Emami Group Director Aditya V Agarwal said, “It is a balanced budget boosting overall growth with a focus on developing manufacturing, infrastructure, and agri-economy. This budget focuses on self-reliance and protection of domestic manufacturers through the change in custom and import duties. It is in perfect line with the long-term goal of Atmanirbhar Bharat. However, we would expect the government to reinstate the import duty difference between refined palm oil and crude palm oil back to 11% from the current 5.5% to keep the domestic industry viable. Further, in the time of sustainable and recycled products, imposing import duty on waste paper needs review.”
Parle Products Senior Category Head Mayank Shah recognized the government’s efforts in job creation via GatiShakti but felt the government lagged in taking steps that would have eased inflation for the category.
“First of all, putting money in the hands of consumers helps, so they go out and buy products. So that was more on the front of ensuring that the demand remained robust given that we have gone through two years of the pandemic. That was something that industry expected, either by the tax cut or by increasing the slabs tax brackets or by probably increasing the standard deduction limit. We expected those things, but not much has been done there. Another thing the government would have ensured on the rural front was increased allocation to MGNREGA or direct benefit transfer. They chose the other way. In terms of rural demand, when you’re talking about putting money in the hands of rural consumers by increased MSP and increased MSP allocation, it is also going to have an impact on inflation because if you increase the MSP, that eventually is going to increase the cost of Agri products, primary inputs in food processing. So procurement is going to be increased. The current challenge ahead of most FMCG companies, which is managing inflation, would probably be aggravated, so I consider it neutral. Probably placing this money in the hands of consumers through MGNREGA or DBT would have ensured demand to remain robust,” Shah elaborated.
Final Thought on Budget 2022
After the above information, we can say that the budget might not sound that beneficial to common middle-class people, but we can’t ignore that it is a futuristic move by the government. The good news for middle-class people is that there is no tax slab increase.
Last no least, with the positive words from Indian Entrepreneurs, all we can say is the country is focused on the next 25 years of development.
The Budget 2022 is good or bad. We can say that it is the futuristic-focused budget, and India will soon surpass the $5 trillion mark. Overall it was a sustainable growth-oriented budget.
Suprotik Sinha is the Content Writer with Synkrama Technologies. He writes about technologies and startups in the global enterprise space. An animal lover, Suprotik, is a postgraduate from Symbiosis Institute of Mass Communication (SIMC) Pune. He carries 6+ years of experience in Content Writing, and he also worked in mainstream broadcast media, where he worked as a Journalist with Ibn7 ( now known as News18 India) and Zee Media in Mumbai.