Decoding Budget 2022-23 | Gist of Rajya Sabha TV / RSTV (now Sansad TV) - UPSC PDF Download

Context

Dr. T. V. Somanathan is a featured character in the episode, as he and others analyse the Union Budget 2022–2023's many components.

Important Budgetary Issues for 2022–23

• The Finance Minister unveiled the Union Budget 2022–23 on February 1st, 2022.
• The Budget places a lot of emphasis on infrastructure, with particular emphasis on highway and rail expansion, river linkage, the PM housing programme, the Nal se Jal programme, and infrastructure projects in the North-Eastern states.
• The government has boosted capital expenditure by 35.4% to 7.5 lakh crores (2.9% of GDP) in an effort to increase public investment.

Capital Expenditures in the 2022–2023 Budget

• The budget for 2022–2023 includes a 4% increase in CapEx (capital expenditures).
• According to the justification for the sharp rise in CapEx, the plan is to revitalise economic growth and generate employment across the nation.
• Economic theories and actual research that is particular to India point to CapEx having a significant multiplier effect.
• In an economic situation that is recovering from the pandemic shock, CapEx is said to be a major initiative to restore growth quickly.
• The funds for the CapEx is expected to come from two sources:
  • It is expected that the tax revenue will increase by 10% next year.
  • Enhanced borrowing from about 15.1 lakh crores to 16.6 lakh crores.

Expectations on Private Investments

• Private investment is not as high as it is expected to be.
• The reasons for low private investment are:
  • The economic crisis in 2012-13.
  • Twin balance sheet syndrome triggered by a high share of Non-Performing Assets (NPAs).
  • Low profitability for the companies due to the fall of demand in the economy.
• Measures to increase investment:
  • Pump priming by the government in terms of enhancing expenditure on capital will revive the growth that will bring in private investment and in turn create employment and jobs.
  • It is expected that the current strategy of increasing CapEx in the budget will play a role of a catalyst in reviving the private investments.

Key Areas of Focus

1. Infrastructure

• After capital expenditures, infrastructure is another important area of concern for the budget.
• National roadways, railroads, telecommunications, domestic defence procurement, and river linking projects are a few of the infrastructure segments that are a focus.
• The budgetary amount allotted for building border settlements and highways has also increased.
• A total of Rs. 1 lakh crore has been set aside for state governments to receive as interest-free, 50-year loans for capital expenditures.

2. Health

• The health budget estimates have increased significantly from about 73000 crores to 86000 crores in comparison to prior years.
• Due to a unique COVID emergency response programme, the updated forecasts for FY 2021–22 are higher than 73000 crores.

3. Education

• The issues with education in India are more related to quality than to cost.
• The increase from 1 to 12 television channels that broadcast in every regional language and educational level is intended to address non-financial issues and give a solution for those without access to cellphones, computers, or other digital devices.
• The budget for education has also witnessed a considerable increase.

4. Agriculture

• The Indian economy's foundational sector increased at a 3.6% annual rate during the pandemic, while other industries suffered.
• The budget discusses natural farming without chemicals, agricultural diversification, industry technology utilisation, and supporting entrepreneurs.
• The PM Kisan Program, which deals with direct income transfers for farmers, is mentioned in the budget as receiving financing.
• The funding for PM Gram Sadak Yojana has been increased significantly by 27%, from 15000 crores to 19000 crores

5. Urban Planning and Development

• Planning, not money, is the main necessity for creating cities that are more sustainable and livable.
• Sustainable water and sewage systems, good public transportation, a clean environment, and sanitation are all included in urban planning.
• A High-Level Committee has been established by the government to make suggestions on urban development and planning.
• The currently operating academic institutions would be recognised as centres of excellence for the advancement of urban planning and design expertise peculiar to India.
• The Budget also suggests updating town planning and building bylaws.

6. Taxation in Budget 2022-23

• The approach in the budget has been to bring stability in taxation, tax rates, and tax laws.
• A few changes have been made to sort certain anomalies such as,
  • Higher tax rates on cooperatives than corporate companies.
  • A kind of capital gain had a different tax rate compared to others.
• There are measures introduced to improve the coverage of taxation and prevent tax evasion.
• A provision has been introduced to provide clarity on the taxation of virtual digital assets or cryptocurrencies.

Key Obstacles

• The main obstacle is obtaining the desired growth while also balancing the budget deficit.
• the difficulties in controlling the pandemic and subsequent illness spread that have hampered the economy for two years running.
• International changes in the price of crude oil, the cost of other significant commodities that affect fertiliser subsidies, and the impact of monetary policies in the United States and Europe on the preferences of foreign investors.
• high levels of debt and the fiscal deficit. schemes.