Union Budget 2022 – 2023 Highlights

Dear Champions, as you all know that a lot of competitive exams have been notified consequently. Candidates have to prepare themselves according to the level of competition and expectation of the Recruitment board. Regarding that one of the most important topic is Union Budget 2022 – 2023 Highlights. Union budget is one of the most important topic especially for the candidates who are about to attend interview.

According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year.

The annual Union Budget, also known as the annual financial statement, is a declaration of the government’s expected receipts and expenditures for that specific year, as defined by Article 112 of the Indian Constitution.

The annual budget of the Republic India is discussed in the Union Budget of India which is also known as Annual Financial Statement in the Article 112. The Union Budget is the blueprint of the Government’s revenue and expenditure for the fiscal year starting from April 1 to March 31 of the respective year.

Union budget usually classified in two parts. They are Revenue Budget and Capital Budget. The revenue budget consists of India’s revenue and the expenditure of the respective year. The revenue budget describes the sources from where the revenue is coming to the Government. The tax collected from the people and corporation plays vital role in the Government’s sources for revenue. The government also makes some revenue through various instruments and receives interest and dividends on those. The revenue budget is classified into two types. They are Tax based revenue and Non-tax based revenue.
Tax based revenue

The government’s money from taxation is known as tax revenue. The application of a tax rate to a tax base result in Tax Revenue. The share of a country’s output collected by the government through taxes is expressed as total tax revenue as a percentage of GDP.

Direct Tax:

• The person or company who is subjected to a direct tax pays the tax directly to the government.
• Direct taxes include income tax, wealth tax, corporate tax, and property tax. Indirect taxes are those that are collected from individuals and corporations who bear the tax burden and passed on to the government through intermediaries. Indirect taxes include the Goods and Services Tax (GST).
• Corporation tax accounts for a significant portion of the government’s tax revenue.

Indirect Tax:

• The Indian government imposes a number of indirect taxes. Manufacturing, sale, import, and even procurement of goods and services are all subject to taxes.
• These laws aren’t well-defined government acts; rather, relevant government organisations issue instructions, circulars, and notices to that effect. As a result, trying to comprehend every aspect of India’s indirect taxes can be difficult.
• Following the implementation of the unified Goods and Services Tax, indirect taxes are expected to be simplified (GST).
• The following ideas will help you learn more about the many types of indirect taxes and when they apply to you as a customer.
• The types of Indirect Tax are as follows Service Tax, Excise duty, Value Added tax, Customs Duty, Stamp Duty, Entertainment Tax, Securities Transaction Tax.

Non-Tax based Revenue:

• Non-Tax Revenue is the recurring income earned by the government from sources other than taxes.
• Interest receipts (earned on loans made by the government to states, railways, and others) and dividends and earnings obtained from public sector firms are the most major receipts under this heading.
• The government earns money from a variety of services, including police and defence, social and community services like medical services, and economic services like power and railways.
• Despite the fact that the Railways are a separate department, the Consolidated Fund handles all of their receipts and expenditures.

Expenditure:

Important notes on Budget:

• 1st Budget – 1950.
• Chief Economic Advisor – Dr. V Anantha Nageshwaran (Succeeds KV Subramanian)
• Speaker – Om Birla.
• Finance Minister – Nirmala Sitharaman.
• Union Budget 2022 is the 2nd Digital Budget .
• 1st Woman presented budget Indra Gandhi 1970 – 71 (additional charge FM)
• Nirmala Sitharaman – 1st Full time women Finance Minister.
• Duration of Budget 2022 – 1 hr 30 min.
• Record longest Budget speech 2 hrs 17 minutes in 2019.(broke her own record in 2020 – 2 hrs 42 min.
• Before Nirmala, Jaswant Singh – 2 hrs 15 min in 2003.
• Shortest Budget speech in history Hirubhai M. Patel 1977 (800 words)

Budget 2022: Focus Areas:

1. PM Gati Shakthi
2. Inclusive Development
3. Productivity Enhancement
4. Sunrise Opportunities
5. Energy Transition
6. Climate Action
7. Financing of Investments

Total Budget 2022-23 => Rs 39.45 Crore

BE (Budget Estimate):

• A budget estimate is an assessment of a company’s projected funds or of funds that are required to complete a project.
• A budget estimate is a preliminary assessment either of funds projected to be available to a company or agency, or of funds required to complete a project.

RE (Revised Estimate):

• Revised Estimates are mid-year review of possible expenditure, taking into account the rest of expenditure, New Services and New instrument of Services etc.

V-Shaped economy:

• An economy that has seen a dramatic economic collapse sees a swift and powerful rebound in a V-shaped recovery.
• A major change in economic activity, produced by quick adjustments of consumer demand and business investment spending, is usually the catalyst for such recoveries.

Capital Expenditure:

• Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.
• This type of financial outlay is made by companies to increase the scope of their operations or add some economic benefit to the operation.

WPI (Wholesale Price Index):

• A wholesale price index (WPI) is an index that measures and tracks the changes in the price of goods in the stages before the retail level.
• This refers to goods that are sold in bulk and traded between entities or businesses (instead of between consumers).
  CPI (Consumer Price Index)
• The Consumer Price Index (CPI) is a measure of the average change overtime in the prices paid by urban consumers for a market basket of consumer goods and services

Blended Capital:

• Blended Capital is the mix of government or non-profit grants, equity investments, and bank loans put into a startup.
• This helps the company scale in ways a grant would not allow and de-risks the investment for the next stage.
• Blended Capital comprises of Government asset, loans and Investment.

Public–private partnership (PPP):

• A Public-private partnership (PPP) is often defined as a long-term contract between a private party and a government agency for providing a public asset or service, in which the private party bears significant risk and management responsibility (World Bank, 2012).

ECLGS – The Emergency Credit Line Guarantee Scheme:

• The Emergency Credit Line Guarantee Scheme was introduced as a part of the Indian Government’s COVID-19 financial relief package.
• Under this scheme, financial institutions in India provide emergency loan facilities to various companies and MSMEs that have suffered during this pandemic.

CGTMSE – Credit Guarantee Fund Trust for Micro and Small Enterprises:

• The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector.
• Both the existing and the new enterprises are eligible to be covered under the scheme.

Raising and Accelerating MSME Performance programme (RAMP):

• It aims to improve the condition of MSMEs in India.
• The MSMEs were badly affected due to COVID pandemic and lock down. It provides better access to finance to the MSMEs.

Productivity enhancement and investment:

Green Clearance:

• Green E-Clearance is a concept of giving environmental clearance for industrial project.
• The Ministry of Environment and Forest (India) has made it mandatory to obtain Environmental Clearances for Construction projects having covered built-up area greater than 20,000m2.

Green Bonds:

• A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.
• These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.

Venture Capital:

• Venture capital (VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth (in terms of number of employees, annual revenue, scale of operations, etc).
• Especially for Startups.

Private Equity Investment:

• Private equity (PE) typically refers to investment funds, generally organized as limited partnerships, that buy and restructure companies.
• More formally, private equity is a type of equity and one of the asset classes consisting of equity securities and debt in operating companies that are not publicly traded on a stock exchange.
• Especially for Loss Company.

Gross/Net State Domestic Product (GSDP):

• Gross State Domestic Product (GSDP) is defined as a measure, in monetary terms, of the volume of all goods and services produced within the boundaries of the State during a given period of time, accounted without duplication.

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