Will Indian Budget 2022 Meet Expectations Of Common Man?

Indian Budgets is not only one of the most important economic events in the country but also expectation of the entire Indian population to achieve quick and balanced economic growth while ensuring social justice and equality. The Budget 2022 is likely to be presented on February 1, 2022, as same as the last two years. Budget 2022 would be the fourth such financial bill, presented by Finance Minister Nirmala Sitharaman. 

In 2020, she had termed the finance bill as Bahi-khata book, laced in the red cloth breaking the tradition of bringing budget documents in briefcase, also for the first time. Amid covid concerns, the Budget 2021 was mainly focused on the health care sector as well as the infrastructure demand. The first Budget in the covid era in 2021, the finance minister had presented through a tab for the very first time. 

Concept

Budget:

An Estimate of Income and Expenditure for a set period of time. In other words, it’s an estimate of how much money you’ll make and spend over a certain period, such as a month or year.

Indian Budget:

Our Indian Budget has the motto of SABKA SAATH, SABKA VIKAS, SABKA VISHWAS, SABKA PRAYAS.

What Is Union Budget?

The Union Budget is an exercise carried out by the central government every year. The government makes an estimate of revenue and expenses for the forthcoming financial year. The exercise is similar to the monthly budget making one does for our household expenditure  and earnings.

When Was India’s First Budget Presented?

The first Union Budget of Independent India was presented by RK Shanmugam Chetty on November 26, 1947. It was a review of the economy, and no new taxes were proposed.

Did You Know?

• During the first term of the Modi Government, the Budget used to present on the last working day of February, however, it was eventually changed to the first day of February. The norm was changed by the then Finance Minister Arun Jaitley. 

• The budget speech of the finance minister begins around 11:00 am. Budget 2021, the finance minister addressed the house through her budget speech for 141 minutes. Earlier it used to be presented at 5:00 pm, in accordance with British time. 

• Budget is a constitutionally mandated annual exercise by the government. It has two basic parts: Revenue Budget and Capital Budget. The revenue part consists of revenue receipts and expenditures including tax revenue, non-tax revenue (like interest receipts, profits), while the capital part comprises capital receipts like borrowings, disinvestment, creation of assets and investments.

• In this, the revenue budget mainly includes the transactions that are of recurring nature, like the tax receipts, and among others, while the capital budget consists of transactions that do not take place regularly, like a loan from the Reserve Bank of India to the government. 

• Usually, the presented budget is a deficit budget in India. This simply means that central government expenditure is greater than the receipts, and the deficit is met through various means like borrowing and selling bonds. 

• All the departments of the Finance Ministry, contribute largely to the budget preparation which starts a couple of months before its presentation. On the completion of drafting the Budget, a Halwa Ceremony is organized, and the printing of the Budget paper begins. 

The Big Picture

• What To Expect From Budget 2022?

The fourth budget-planning process for the Modi 2.0 government commenced on October 12, 2021. People have been trying to make Budget 2022 predictions ever since. From reducing the tax burden to increasing farmers’ income, taxpayers pin their hopes for a great financial year on the Union Budget each year. While the recovery from the pandemic is still pivotal concern, the government may also focus on developing infrastructure, GDP, healthcare, MSMEs, income tax, provident fund and other critical aspects in the upcoming Budget.

• Economic Growth Plan

The government’s prime focus while preparing Budget 2022 would be devising a robust growth map to revive the economy thumped by COVID-19. India’s economic advisory expects the nation’s growth to range between 7% to 7.5%. However, the council also mentioned that the government should not create unrealistic revenue targets. Plans on utilising extra revenue to build more assets shall also be included in Budget 2022.

• Compliance Relief For Msmes

It’s no news that the small business sector has been severely battered by the pandemic. MSMEs are the second largest employment generators, providing jobs to around 11 crore people in India. Furthermore, they account for 48% of exports from our country. As 30% contributors of the GDP, MSMEs are expecting the government to reduce the compliance burden in all aspects, be it taxes, loans, audits, or licencing.

• Taxation

The government is likely to phase out income tax deductions, exemptions, and incentives on direct taxes. Simultaneously, it will also rationalise the rate of tax. The Finance Ministry seeks suggestions on providing compliance relief, ensuring tax certainty, and reducing litigations. The Ministry also mentioned that it has not examined GST-related issues as it falls under the purview of the GST Council.

• Healthcare

Since a large portion of our population is yet to be vaccinated, the government will continue to allocate a significant amount of resources towards healthcare and it will also impact the health insurance segment. With new variants continuing to emerge across the world, our battle against COVID-19 shall go on in the next fiscal year as well. We might also see a roadmap ensuring 100% health insurance coverage.

• Infrastructure

Budget 2022 is most likely to focus on improving infrastructure. It might include a detailed list of public roads to railways assets, which the government plans to monetise during FY 2022-23. Reports also suggest that it might especially prioritise highways and expressways. Telecommunications

Union Budget FY23 is expected to pursue the strategic intent expressed in the Budget FY22, through stepping up infrastructure spend and providing incentives for corporate capex.