Union Finance Minister Nirmala Sitharaman has ended her Budget speech by beginning the new financial era for the ruling BJP regime on Tuesday. With more predictions and announcements, her budget has become the talk of the nation not only for giving a push to the privatization drive of the Modi regime but also for missing a crucial part of the puzzle- the much-anticipated reformations for the tax-paying middle-class community.
Nirmala Sitharaman, who is the first full-time female Finance Minister of India, has presented her fourth straight Union Budget on Tuesday -February 1 in the Lok Sabha. The nationwide expectations on various sections had thrown more weight on this Union Budget and what adds more significance is that it's the BJP government's budget ahead of five crucial assembly polls and it was expected that the Finance Minister will throw some relief to the middle-class, that was hard hit due to the pandemic, both financially and economically.
Amid the government's efforts to pillar infrastructure with more spending, the individual taxpayers were expecting more disposable income in their hands. However, all their expectations had seemingly gone in vain. According to PTI, the Finance Minister didn't tinker with the personal income tax rates in the Budget and she hasn't raised standard deduction, which was widely anticipated in the backdrop of surging inflation levels and the impact of the pandemic on the middle class, which yearned to have some reforms to release them from the intense tax regime.
The standard deduction currently stands at Rs 50,000 and there was no change in the personal income tax slabs in the Budget. As per the current tax regime, the people who are earning up to Rs 5 lakh per year won't have to pay any income tax. Those who are earning between Rs 5 lakh and Rs 7.5 lakh were taxed at 10%, between Rs 7.5 lakh and Rs 10 lakh per year at 15%, between Rs 10 lakh and Rs 12.5 lakh at 20%, between Rs 12.5 lakh and Rs 15 lakh at 25% and people who are earning above 15 lakh per annum, they have to pay 30% tax. Similarly, amid the demands to raise the corporate tax, the government has kept the corporate tax at the same level and announced that the concessional rate of 15% has been extended by one year for newly incorporated manufacturing units.
The highlights of the Union Budget:
- India's growth is estimated to be at 9.27%. The Finance Minister said that the government's goal is complementing macro-growth with micro welfare, digital economy and fintech, tech-enabled development, energy transition, and climate action.
- She said that the Prime Minister's Gati Shakti (Infrastructure plan) is one of the four pillars of growth.
- National Highway Network would be expanded by 25,000 kilometres and Nirmala Sitharaman has highlighted that her budget puts a blueprint for the next 25 years. The government will be implementing 400 Vande Bharat trains in 2022-23.
- Make In India will create six million new jobs and the Prime Minister's Infrastructure plan goes by seven engines- Roads, Rail, Airways, Ports, Waterways, Mass Transport, and Logistics.
- The Finance Minister has said that 2023 has been announced as the international year of Millets and Natural farming will be promoted along the Ganga corridor.
- In one of the major announcements, the Finance Minister said that the implementation of the Ken Betwa project will be taken up and there will be a drinking water supply to 62 lakh people. Rs 2.37 lakh crore will be the direct payment of the Minimum Support Price value to the farmers' accounts.
- River linking projects will be implemented and will concentrate on linking the rivers including Pennar-Cauveri and Krishna-Godavari. The start-ups in the agriculture sector will be encouraged with a commitment to provide support for FPOs, technology including IT-based support.
- Digital University to be established for access to all students. A national mental health training programme will be set up with the inclusion of 23 mental health centres across India. The Finance Minister said that in 2022, 100% of 1.5 lakh post offices will come on the core banking system.
- Under Har Ghal Nal Scheme, Rs 60,000 crore to be allotted to 3.8 crore households for water supply. 80 lakh houses to be completed of identified beneficiaries under PM Awaas Yojana. Rs 48,000 crore has been allotted towards this scheme.
- E-passports with embedded chips and futuristic tech will be rolled out in 2022-23. Five existing academic institutions are to be designated as Centres of Excellence and each institution will be allotted Rs 250 crore. A completely paperless end-to-end online e-bill system for use by Central ministries for procurement.
- Spectrum auctions to be held in 2022 for rolling out 5G technology. Rs 19,500 crore is allotted for Postal Life Insurance (PLI) for solar modules. Nirmala Sitharaman has said that the capital expenditure is estimated at Rs 10.68 lakh crores and the Reserve Bank of India (RBI) will be introducing a Digital rupee.
- The scheme for financial assistance to states is being enhanced to Rs 15,000. For 2022-23, the allocation is Rs 1 lakh crore to assist the states while the revised fiscal deficit is estimated at 6.4% of GDP in 2022-23.
- The finance minister has said that the gross GST collection for January 2022 is Rs 1,40,986 crores, the highest since the inception of GST. The customs duty on cut and polished diamonds and gemstones is to be reduced to 5% while the duty on Umbrella is raised to 20%.
Allocation of funds to key sectors and a historical part of the budget:
Finance Minister Nirmala Sitharaman has allocated Rs 1.32 lakh crore for Agriculture and allied activities, Rs 5.25 lakh crore for Defence, Rs 23,116 crore for Energy, Rs 86,200 crore for Health, Rs 1,04,278 crore for the education sector, which is Rs 11,054 crore more than what was allotted in the previous budget. The Finance Minister has also allotted Rs 60,000 crore for providing tap water connections to 3.8 crore households in the year 2022-23.
Amid a major section of individual income taxpayers expressing disappointment over the lack of reforms to reduce their tax burden, it has become a historical budget for Nirmala Sitharaman. In this budget, she has delivered the shortest speech ever. The Finance Minister spoke for about 1 hour and 30 minutes on Tuesday. She holds the record for delivering the longest speech when she spoke for 2 hours and 42 minutes while presenting the Union Budget 2020-21 on February 1, 2020. Nirmala Sitharaman also holds the record for presenting India's first paperless budget.