India's finance minister Nirmala Sitharaman on Tuesday presented her Budget 2022, saying that “it gives a blueprint of the country's economy from India at 75 to India at 100”.
Presenting the annual budget in the Lok Sabha , or the lower house, of Indian Parliament, Sitharaman said that the country is expected to grow at 9.27 percent in the coming year with a focus on four pillars of development -- development, productivity enhancement, energy transition, and climate action.
The major announcements of Budget 2022, however, included a spectrum auction in 2022 to roll out 5G mobile services by private firms, a 30 percent tax on proceeds of digital assets, and the introduction of digital currency in the next financial year using blockchain and other supporting technology by the Reserve Bank of India (RBI).
The Budget estimates the federal government's capital expenditure to be INR 1.06 trillion ($14.2 billion) in 2022-23, constituting about 4.1 percent of the Gross Domestic Product (GDP).
Along with this, the finance minister informed the Lok Sabha that the gross Goods and Services Tax (GST) collections for the month of January 2022 are INR 140.9 billion ($1.8 billion), the highest since the tax was introduced in 2017.
Presenting her fourth budget, Sitharaman also said that the Narendra Modi government has focused on ensuring an income for farmers, announcing INR 2.37 trillion (about $31.6 billion) towards direct payments for a minimum support price (MSP) to wheat and paddy farmers. These payments would be made between April 2022 and March 2023.
The announcement comes two months after the farmers’ agitation demanding guaranteed MSP for farm produce ended with the government repealing three farm reform laws passed in 2020. The protest was dominated by farmers from poll-bound Uttar Pradesh and Punjab states.
The minister also announced the government's plan to promote oilseed cultivation to reduce import dependency and for promotion of millet production with an emphasis on exports.
She said the government would promote chemical-free natural farming throughout the country to boost sustainable agricultural productivity and the farmers' incomes, as well as use of Kisan (farmer) drones for crop assessment and spraying of pesticides.
Sitharaman further added that digitisation of land records would be expedited to bring more transparency in the agriculture sector.
She also kept income tax slabs unchanged. However, the minister proposed that both federal and state government employees’ tax deduction limit should be increased from 10 percent to 14 percent.
“The move will help the social security benefits of state government employees and bring them on a par with central government employees,” she said in her speech. “To provide an opportunity to correct an error, taxpayers can now file an updated return within two years from the relevant assessment year,” the minister added.
Sitharaman also announced tax relief for people with disabilities.
“Parents or guardians can claim insurance for their children with disabilities,” she said, adding that the payment of an annuity or lump sum for disabled dependents will be exempted during the lifetime.
Key Highlights of Budget 2022
Other major points in her speech included:
E-passports to be rolled out this year;
The Alternate Minimum Tax on co-operative societies to be cut to 15 percent from 18.5 percent;
India to launch sovereign green bonds;
The Emergency Credit Line Guarantee Scheme (ECLGS) to be extended until March 2023;
Capital expenditure to be stepped up to $100 billion;
The Ken-Betwa linking project to be launched at a cost of INR 446 billion ($5.9 billion);
INR 480 billion ($6 billion) to be allotted for the PM Awas Yojana (Prime Minister's Residential Scheme); and
The additional allocation of INR 195 billion ($2.6 billion) for solar modules under the PLI (Production Linked Incentive) scheme.
'Nothing in the Budget for Common Man': Opposition Slams Modi Govt After Finance Minister's Speech
Although Sitharaman's budget was praised by prime minister Narendra Modi and home minister Amit Shah, as well as by parliamentarians on the treasury benches who lauded her speech by thumping their desks thunderously, it also had its share of criticism from opposition politicians.
These opposition members criticised the government for not paying enough attention to many sectors and the middle class.
Prime Minister Modi hailed the Budget, saying that the "progressive and people-friendly budget" has brought hopes and opportunities for the people.
"The budget announcement will strengthen the country's economy as it focuses more on infrastructure, investment, and job opportunities. In addition, this Budget ensures a bright future for youth," he said on Twitter.
"I congratulate the finance minister and her entire team for this people-friendly and progressive budget," Modi added.
The Budget was also hailed by senior Bharatiya Janata Party (BJP) politician and federal home minister Amit Shah.
"This Budget is a visionary budget, which will change the scale of India's economy. This Budget will make India self-reliant and lay the foundation of a renewed India's 100th year of independence. I congratulate the finance minister and prime minister for this," Shah tweeted.
However, some of the BJP's allies seemed unhappy with the budget. Janata Dal (United) spokesman Upendra Kushwaha said that the Budget ignored backward states such as Bihar (where JD-U is the ruling party with BJP as its main ally).
It's a "Zero-Sum Budget" - Congress Leader Rahul Gandhi
Congress parliamentarian Rahul Gandhi said that the Budget has nothing to offer the middle classes, youths, farmers or women, describing it as a "Zero-Sum Budget".
In a tweet, BJP's arch-rival Trinamool Congress leader and West Bengal State Chief Mamata Banerjee said that the Budget has zero hope for people who are getting crushed by unemployment and inflation.
And Sitaram Yechury, general secretary of the Communist Party of India (Marxist) (CPI-M), wanted to know from the government who would benefit from this Budget.