The Union Budget 2022 presented by the Finance Minister Nirmala Sitharaman had got mixed reviews across the country. Every person in his own capacity is analyzing the rationale behind some announcements, whereas some say there are areas that could have been addressed through the Budget 2022 by the government.

The Union Government, through Budget 2022, has laid down a post COVID -19 pandemic recovery plan for the country with a focus on creating infrastructure for future, employment, sustainable development, greater boost for digitalization and also preparations for new-age technologies such as digital rupee, 5G mobile services, E Passports and push for digital education. 

While there is no change in the present income tax slabs in the individual income tax category and in the standard deduction limit as was anticipated by many, the FM has extended the tax benefit window of startups by a year. The PM Modi-led government with its belief of considering IT, startups and digitalization as major constituents of the economy and GDP has announced many positives for them in the budget.

Like the announcement of capping of tax surcharge on long-term capital gains tax at 15 per cent for all listed and unlisted companies. The FM has not only addressed the demand of the new-age startups that wanted their share sales of unlisted firms to be taxed on par with the listed ones, but also provides benefit to start-ups and investors at large. However, the tax rate remains the same at 20 percent while the surcharge on unlisted share sales will be reduced.

With many young startups coming into action in India, the holders of the employee stock options and equity in such unlisted startups will get benefit of lower tax surcharge. 

The budget has also provided a greater push for ‘Made in India’ initiatives by earmarking 68% of capital procurement of defence budget for the domestic industry, thereby reducing the dependence on imports.

It will not only provide much needed boost to domestic defence production but will lead to atmanirbharta (self-reliance) in defence manufacturing with the creation of large employment opportunities for youth.

While announcing about the digital rupee, 5G roll out, battery swapping policy, setting up more charging stations for electric vehicles (EV), issuance of sovereign green bonds for green infra and allocation for production linked incentives for manufacturing modules stressing on carbon neutral economy, the government has aimed at clean energy, green economy with focus on technology-driven inclusive digital economy. The government’s proactive approach towards futuristic digital technologies and other emerging technologies will accelerate the innovation and R&D process in the IT domain and will be a catalyst for future growth and economy.

The launching of National Digital Health Ecosystem will lead the digital transformation of many processes in healthcare sector. It would consist of digital registries of health providers and health facilities, unique health identity number and universal access to health facilities, and can be a game changer provided the large number of population of the country and can lead to universal health care. 

The launch of National Tele Mental Health Programme for better access to quality mental health counseling is a good step considering the difficulties and issues faced by the people during the COVID-19 pandemic.

With many good things to happen, there are many which didn’t happen. While some credited the FM for not increasing the tax burden post pandemic, it was also highly expected that the minimum tax exemption, which currently stands at Rs 2.5 lakh, would have increased along with the standard deduction at Rs 50K.

The startups have welcomed all the announcements but had expected some more clarity on foreign direct listing, rules for which are highly anticipated along with the relaxation in some eligibility criteria for being a startup approved by DPIIT for availing the income tax and other benefits.

There were many demands of the hospitality and tourism sector, which could have got place in the budget but didn’t. While the focus of the budget was more on infrastructure development, it has to be seen how many from the young workforce could be accommodated in this growth trajectory.

While there can be a long debate on what was announced and what could have been announced by the FM in the budget, we can only believe that whatever is announced is duly backed by a proper implementation plan that is executed in a timely manner so that the targets expressed can be achieved in the future to come.

The writer is a columnist and a finance professional. He has keen interest in international affairs, politics, economy and law.

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