Current Affairs (February 2- 2022)

Posted On : 2022-03-05 23:07:20

Current Affairs

February 2- 2022

The Hindu Coverage



NOTE: This Document Contains almost all Prospects required to cover Budget, both Objective, Subjective and Critical Analysis. There shall be Pictures, Infographics and Text covered from Various newspapers and articles over Internet. You can keep this document in order to revise and learn.

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  1. Medium Wave (Introductory Article)
  • Union Finance Minister Nirmala Sitharaman, presenting her fourth Budget and the second one in a pandemic-hit economy on Tuesday, largely stuck to the broad script from last year, scaling up the wager on public capital spending to revive private investments and job creation through a virtuous growth cycle, while keeping an eye on the country’s macro fiscal health.


  • Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc. It also includes the expenditure incurred on acquiring fixed assets like land and investment by the government that gives profits or dividend in future.

Understanding capital expenditure

  • Capital spending is associated with investment or development spending, where expenditure has benefits extending years into the future.

Capital expenditure includes money spent on the following:

  • Acquiring fixed and intangible assets
  • Upgrading an existing asset
  • Repairing an existing asset
  • Repayment of loan
  • Why is capital expenditure important?

Capital expenditure, which leads to the creation of assets are long-term in nature and allow the economy to generate revenue for many years by adding or improving production facilities and boosting operational efficiency. It also increases labour participation, takes stock of the economy and raises its capacity to produce more in future.

  • Along with the creation of assets, repayment of loan is also capital expenditure, as it reduces liability.

How is capital expenditure different from revenue expenditure?

  • Unlike capital expenditure, which creates assets for the future, revenue expenditure is one that neither creates assets nor reduces any liability of the government. Salaries of employees, interest payment on past debt, subsidies, pension, etc, fall under the category of revenue expenditure. It is recurring in nature.


  • This Budget, presented in the 75 year of Independence, sets the stage for an Amrit Kaal (time of nectar) over the next 25 years, culminating in a vision for India in 2047 as enunciated by Prime Minister Narendra Modi in his I-Day address last year, she said.
  • The tax proposals for 2022-23 included the levy of a 30% tax on all profits from transactions pertaining to virtual digital assets or crypto assets, bringing some clarity over a grey area for investors even as further regulations are being worked out.
  • The salaried and the middle class, however, got no direct relief in the form of tax breaks to counter inflation and the COVID-hit on incomes and jobs, nor was there any significant nudge to spur private consumption that is likely to end 2021-22 below pre-pandemic levels.
  • Contact-intensive services sectors like hospitality that are also languishing under 2019-20 levels, did get a helping hand with the expansion of the existing ?4.5 lakh crore Emergency Credit Line Guarantee Scheme to ?5 lakh crore, with the window to avail this support extended by a year till March 2023.
  • A fresh push was made on creating liveable cities and a better planning framework for urban areas where half of Indians are expected to live by 2047.
  • On the other hand, without mentioning China, the Budget promised a convergence of existing border area development programmes to provide better physical and digital connectivity to villages with sparse populations on the ‘northern border’.
  • While the economy has shown strong resilience over the past year, the Finance Minister said greater capital spending is needed to sustain the recovery and enhanced the Centre’s capex plan to ?7.50 lakh crore in 2022-23, which she emphasised is over 2.2 times the outlay in 2019-20.
  • Separately, in a move that should also reduce federal friction, she also announced a ?1 lakh crore 50-year interest-free loan for States to pursue critical capital spending projects, aligned with the PM Gati Shakti programme, digitisation or urban reforms.
  • The Minister said the listing of Life Insurance Corporation of India is expected shortly, which may well translate into a lower fiscal deficit than the 6.9% of GDP now projected for 2021-22. However, the ambitious ?1.75 lakh disinvestment target for the year has been pared to ?78,000 crore with the 2022-23 expectations set at a modest ?65,000 crore.
  • Rating agencies, like Moody’s Investors Service, reacted with caution to the Budget math that pegs fiscal deficit in 2022-23 at 6.4% of GDP without any significant revenue generation plans.

5G services to roll out in FY-23

  • Union Finance Minister Nirmala Sitharaman on Tuesday said the government will auction telecom spectrum in 2022, which will facilitate private players to roll out 5G services before March 2023.
  • “Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities. Required spectrum auctions will be conducted in 2022 to facilitate roll-out of 5G mobile services within 2022-23 by private telecom providers,” the Minister announced during the Budget speech.
  • Speaking to reporters post the Budget presentation, Telecom and IT Minister Ashwini Vaishnaw said the Telecom Regulatory Authority of India (TRAI) was working on its recommendations for the spectrum auction and these were expected to come by March. At the same time, the Department of Telecom, he said, was preparing for auctions and readying the NIA (notice inviting applications) and other documents.
  • Further, to enable affordable broadband and mobile service proliferation in rural and remote areas, 5% of annual collections under the Universal Service Obligation Fund (USOF) will be allocated. This will promote R_amp;D and commercialisation of technologies and solutions, she said.
  • “Our vision is that all villages and their residents should have the same access to e-services, communication facilities, and digital resources as urban areas and their residents. The contracts for laying optical fibre in all villages, including remote areas, will be awarded under the BharatNet project through PPP in 2022-23. Completion is expected in 2025. Measures will be taken to enable better and more efficient use of the optical fibre,” Ms. Sitharaman added.
  1. Tax on Cryptocurrency
  • Finance Minister Nirmala Sitharaman on Tuesday proposed a 30% tax on income from virtual digital assets, such as cryptocurrencies and non-fungible tokens (NFTs).
  • “Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%,” Ms. Sitharaman said in her Budget speech.
  • The Minister added there would be no deduction allowed while computing such income except the cost of acquisition.
  • “The government has set a fixed 30% rate to ensure all investors pay a percentage of their gains to the government in the form of taxes,” said Abhinav Soomaney, CEO, Cryptotax Pvt. Ltd.
  • “Most commonly used cryptocurrency tax calculation methods include highest in, first out (HIFO); last in, first out; and highest in, first out,” he said.
  • FM retains tax slabs, allows updated returns
  • The Union Budget 2022-23 has kept income tax slabs unchanged while allowing tax payers an additional two years to update their returns.
  • She introduced the ‘Updated return’ option to provide taxpayers an opportunity to ‘correct errors’ while filing returns or not having reported certain transactions.

‘Trust reposed in payer’

  • To bring parity between employees of State and central governments, she has proposed to increase the tax deduction limit from 10% to 14% on employer’s contribution to the National Pension System (NPS) account of State Government employees as well. This would help in enhancing the social security benefits of State government stff and bring them at par with central government employees.
  • To establish a globally competitive business environment for certain domestic companies, a concessional tax regime of 15% tax was introduced by our government for newly incorporated domestic manufacturing companies.
  • She has also proposed to cap the surcharge on long-term capital gains arising on transfer of any type of assets at 15%, from graded surcharge of up to 37% currently. To track transactions involving businesses passing on benefits to their agents, the budget has proposed to provide for tax deduction by the person giving benefits, if the aggregate value of such benefits exceeds ?20,000 during the financial year.
  • It also proposed to reduce customs duty on cut and polished diamonds and gemstones to 5%. Simply sawn diamonds would attract nil customs duty. To disincentivise import of undervalued imitation jewellery, customs duty on imitation jewellery has been imposed.
  • The Minister proposed to reduce customs duty on methanol, acetic acid and heavy feed stocks for petroleum refining, while duty is being raised on sodium cyanide for which adequate domestic capacity exists. “These changes will help in enhancing domestic value addition,” she said.
  • To incentivise exports, exemptions are being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes that may be needed by bonafide exporters of handicrafts, textiles and leather garments, leather footwear and other goods.
  • Duty is being reduced on certain inputs required for shrimp aquaculture so as to promote its exports.

To encourage the efforts for blending of fuel, unblended fuel shall attract additional differential excise duty of ?2/ litre from the October 1, 2022.

  1. Budget extends more sops for IFSC
  • Taking forward its efforts to further promote the International Financial Services Centre (IFSC) in Gujarat, the government has proposed income tax incentives to promote various business activities such as ship leasing _amp; financing, offshore fund management _amp; offshore banking activities at GIFT City. The union budget has proposed to provide that income of a non-resident from offshore derivative instruments, or over the counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC shall be exempt from tax, subject to specified conditions.
  • Further, it has allowed world-class foreign universities and institutions to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics, free from domestic regulations, except those by IFSCA to facilitate availability of high-end human resources for financial services and technology in GIFT City, Gujarat.
  • “An International Arbitration Centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence,” finance minister Nirmala Sitharaman said in her budget speech. “Services for global capital for sustainable _amp; climate finance in the country will be facilitated in the GIFT City,” she added. Manoj Purohit, Partner _amp; Leader – Financial Services Tax, BDO India said, the move to allow world class Financial Institutions and Universities to set up base free from domestic regulations under IFSCA will give boost to human resources development and expansion in GIFT IFSC.
  • Cooperative societies get tax, surcharge relief
  • The government proposes to reduce the minimum alternative tax (MAT) for cooperative societies from current 18.5% to 15% on a par with private companies, Finance Minister Nirmala Sitharaman said on February 1.
  • Presenting the Budget 2022-23 in the Lok Sabha, she said the government has also proposed to reduce the surcharge on cooperative societies from the present 12% to 7% for those having total income of more than ?1 crore up to ?10 crore.
  • Tax incentive to start-ups extended for a year
  • In a major boost for startups, Union Finance Minister Nirmala Sitharaman has announced extension of tax incentives by another year, till March 31, 2023. The Union government had extended the eligibility for claiming tax holidays last year for startups till March 31, 2022. In view of the COVID-19 pandemic, tax incentives offered to_nbsp;startups for the first three years of their incorporation by the government have been extended by another year.
  • In addition, Sitharaman said that an expert committee will be set up to examine and suggest appropriate measures for boosting venture capital and private equity investments for startups.
  • In another measure to boost startups, the Finance Minister announced that startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS). “In select ITIs, in all states, the required courses for skilling will be started”.
  • Firms’ exit process to get shorter
  • The Union Budget 2022-23 has proposed to establish the Centre for Processing Accelerated Corporate Exit (C-PACE) for speedy winding-up of companies.
  • “Several information technology-based systems have been established for accelerated registration of new companies. Now the Centre for Processing Accelerated Corporate Exit (C-PACE), with process re-engineering, will be established to facilitate and speed up the voluntary winding-up of these companies from the currently required 2 years to less than 6 months,” Finance Minister Nirmala Sitharaman said in her speech.
  • Défense Budget
  • The central government on Tuesday increased the defence budget to ?5.25 lakh crore for 2022-23 from last years allocation of ?4.78 lakh crore with a major push on procurement of weapons and military platforms from domestic manufacturers.
  • Presenting the Union Budget in Parliament, Finance Minister Nirmala Sitharaman said 68% of the outlay for defence procurement will be set aside for buying from domestic industry and that 25% of the allocation for defence research and development (R_amp;D) will be kept for collaboration with the private sector.
  • The overall defence budget of 5,25,166 crore including ?1,19,696 crore for defence pensions is an increase of 9.8% compared to last years total outlay. The defence budget excluding the pension component stands at ?4,05,470 crore.

In the defence budget, the finance minister allocated ?1,52,369 crore for capital expenditure in 2022-23 that includes purchasing new weapons, aircraft, warships and other military hardware.

10. Textile sector allocation to increase 8.1% for FY23

Allocation for the textile sector will see an 8.1% increase in FY23 compared with the revised budget allocation for FY22.

  • According to the Union Budget presented on Tuesday, of the total allocation of ?12,382 crore for the textile sector for next financial year, ?133.83 crore is for Textile Cluster Development Scheme, ?100 crore for National Technical Textiles Mission, and ?15 crore each for PM Mega Integrated Textile Region and Apparel parks scheme and the Production Linked Incentive Scheme.
  • The Centre has also allocated ?105 crore for FY23 towards the Raw Material Supply Scheme.

11. Battery-swapping policy on anvil

  • The Centre is planning to come out with a battery swapping policy with interoperability standards for Electric Vehicles (EVs).
  • Finance Minister Nirmala Sitharaman said that considering space constraints in urban areas for charging stations at scale, a battery swapping policy will be brought out and inter-operability standards will be formulated. The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service’. This will improve efficiency in the EV ecosystem, she said.
  • The budget aimed at strengthening the EV industry ecosystem, which will spur the demand for green vehicles, such as electric 2-wheelers and 3-wheelers, cars and buses, said Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV).
  1. Emergency credit line for MSMEs extended till March 2023
  • The Union Budget for 2022-23 has announced several measures for the micro, small and medium enterprises (MSMEs) sector that included extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023.
  • Union Finance Minister Nirmala Sitharaman, while tabling the Union Budget, said ECLGS had provided much-needed additional credit to more than 130 lakh MSMEs. This helped them mitigate the adverse impact of the COVID-19. Hospitality and related services, especially those provided by micro and small enterprises, were yet to regain their pre-pandemic level of business.
  • Considering these aspects, the government extended the scheme by ?50,000 crore taking the total cover under the scheme to ?5 lakh crore, with the additional amount being earmarked exclusively for hospitality and related enterprises.
  • Further, the Centre said Credit Guarantee Fund Trust for Micro and Small Enterprises scheme will be revamped with the required infusion of funds. This will facilitate additional credit of ?2 lakh crore for Micro and Small Enterprises and expand employment opportunities.
  • To help the MSME sector become more resilient, competitive and efficient, the Centre will roll out Raising and Accelerating MSME Performance (RAMP) programme with an outlay of ?6,000 crore over 5 years.
  • The Budget document also said that Customs-duty exemption given to steel scrap last year was being extended for another year to provide relief to secondary MSME steel producers.
  • Budget gives MEA funds for Taliban-ruled Afghanistan

(Read in IR Pov)

  • The Budget has allocated funds for projects related to Afghanistan. The Ministry of External Affairs (MEA) will have ?200 crore to spend on that country. It will also dedicate ?600 crore for Myanmar, which is currently reeling under civil war since the military coup of February 2021. Bhutan, as usual, has received the biggest allocation with ?2266.24 crore.
  • Noteworthy that India does not have a diplomatic presence in Kabul, where its embassy has remained shut since the Taliban took over in August. Afghanistan has been a steady recipient of India’s grants over the last two decades and the Government of President Ashraf Ghani last year received around ?348 crore. India has showcased its assistance to Afghanistan as aid-oriented, which is focused on development projects on the ground.
  • The allocation for Myanmar continues unchanged as the MEA had received a similar allocation last year for the country. India has maintained diplomatic contacts with the trouble-torn country and Foreign Secretary Harsh Vardhan Shringla visited Myanmar last year and urged for an end to the violence by all sides.
  • The MEA’s allocation for Mongolia, the northern neighbour of China, has significantly increased from ?2 crore to ?12 crore. From promoting traditional Indian medicines to clean energy, the two sides are in talks for several cooperation projects that are likely to receive support from the increased allocation. That apart, ?3100 crores have been allocated for “Special Diplomatic Expenditure”. The South Asian University, a regional university supported by the members of the South Asian Association for Regional Cooperation (SAARC), got a substantial increase from ?94 crore to ?120 crore.
  • The second highest recipient of the allocation will be Mauritius- ?900 crore.
  • The MEA, which is aiming to open new embassies in Africa, has an increased budget of ?250 crore for the continent. The Ministry will get ?300 crore and ?750 crore respectively for Bangladesh and Nepal.
  1. ‘Green bonds’ target carbon neutrality
  • Union Finance Minister Nirmala Sitharaman on Tuesday announced plans to issue sovereign ‘green bonds’, a concept catching up globally, to move towards carbon neutrality.
  • “As part of the government’s overall market borrowings in 2022-23, sovereign ‘green bonds’ will be issued for mobilising resources for green infrastructure,” she said.
  • “The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy,” Ms. Sitharaman said. “The ‘green bond’ market is globally expanding at a fast pace, and this will help India access long-term funds at competitive rates. This will also improve the ESG climate in the country,” said Suman Chowdhury, Chief Analytical Officer, Acuité Ratings _amp; Research.

INSIGHT: What are 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 entitys balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations. ?

Additional Readings: https://www.investopedia.com/terms/g/green-bond.asp

  • 16% hike in healthcare sector allocation
  • In 2021-22, the Budget documents show, the Centre ended up spending ?82,920 crore — nearly ?11,000 crore more — in the last Budget. This was largely in the form of ‘Grant in Aid’ to States.
  • It proposes to spend around the same — ?83,000 crore — over the coming financial year. The 2022 Budget estimate is nearly 16% more than the ?71,000 crore budgeted last year.
  • While allocations haven’t been hiked, the Centre also expects to spend the same as it did last year on health research. In 2021-22, the Centre alloted ?2,663 crore for health research but spent ?3,080 crore. This year, it has budgeted ?3,200 crore.
  • The capital expenditure that the Health Ministry expects to make in the coming year is ?5,632 crore or about ?1,000 crore less than was spent last year. The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) has seen a substantial increase from ?585 crore last year to ?4,177 crore this year.
  • A scheme to improve pandemic preparedness via research and development as well as strengthen “bio security” has also been hiked from ?140 crore to ?690 crore.
  1. Job creation gets fresh impetus
  • Expenditure on Atmanirbhar Bharat Rojgar Yojana (ABRY), aimed at encouraging job creation, and on the ongoing creation of a national database of unorganised workers was proposed to be increased in the Budget Estimate for 2022-2023 on Tuesday.
  • The Budget presented by Union Finance Minister Nirmala Sitharaman proposed increasing the Labour and Employment Ministry’s expenditure from ?13,306.50 crore in BE 2021-2022 to ?16,893.68 crore.
  • For ABRY, which was launched post the COVID-19 lockdown in 2020, the Budget proposed increasing spending from ?3,130 crore in BE 2021-2022 to ?6,400 crore in BE 2022-2023. Under the scheme, the government pays the employees’ share of EPF for new employees with a salary of under ?15,000 a month.
  • The Ministry’s ongoing project to register unorganised sector workers through the e-Shram portal was given an increased outlay from ?150 crore in BE 2021-2011 to ?500 crore in BE 2022-2023.
  • Ayush Ministry receives ?3,050 crore in Budget
  • Cost-effective Ayush services under the National Ayush Mission (NAM) received a major boost in the Budget, the government said in a release.
  • “The total allocation to Ayush Ministry in the past 7 years increased over four times from ?691 crore to ?3,050 crore [in the current Budget],” it noted. The allocation of ?800 crore for NAM will help to upgrade hospitals and dispensaries, support cultivation of medicinal plants and in other areas, including increase in export of value-added items of medicinal plants.
  1. Natural farming finds fertile ground
  • The recent spotlight on zero budget natural farming found an echo in Finance Minister Nirmala Sitharaman’s Budget speech on Tuesday, with the banks of the Ganga identified as the next focal point to promote agricultural practices that eschew chemical fertilizers.
  • “Chemical-free natural farming will be promoted throughout the country, with a focus on farmers’ lands in 5-km wide corridors along the Ganga, at the first stage,” Ms. Sitharaman said.
  • Last month, Prime Minister Narendra Modi called for a zero-budget national farming (ZBNF) method to be adopted as a mass movement across the country. The Centre has sanctioned support for converting four lakh additional hectares of farm land in eight States to use the method.
  • These schemes were sanctioned for financial support under the Paramparagat Krishi Vikas Yojana scheme, meant to promote organic farming and soil health, Vedic farming, ZBNF and a host of other traditional methods.
  • However, documents showed that while the scheme had been allocated Rs. 450 crore under Budget estimates for 2021-22, it had been downgraded to Rs. 100 crore under the revised estimates.
  • In the 2022-23 Budget, the scheme has been submerged into an enlarged Rashtriya Krishi Vikas Yojana scheme.
  • Agri­tech: drones, start-up fund in focus
  • The emerging Agri-tech sector has been enthused by the abundance of digital farming references in the Union Budget speech on Tuesday.
  • “For delivery of digital and hi-tech services to farmers with the involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of agri-value chain, a scheme through PPP [public-private partnership] mode will be launched,” said Finance Minister Nirmala Sitharaman.
  • She added that a fund with blended capital, raised under the co-investment model, would be facilitated through NABARD. “This is to finance start-ups for agriculture and rural enterprise, relevant for farm produce value chain.
  • With a wider focus on drone technology, the Minister promised to promote the use of “kisan drones” for crop assessment, digitisation of land records, and spraying of insecticides and nutrients on fields. In fact, the Budget speech emphasised the efficient use of land resources via technology. “States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records. The facility for transliteration of land records across any of the Schedule VIII languages will also be rolled out,” she said.
  • “The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’, will be promoted as an option for uniform process for registration and ‘anywhere registration’ of deeds and documents,” said Ms. Sitharaman.
  1. Record allocation of ?1.37 lakh cr. for Railways
  • The Union Budget has proposed a record budgetary allocation of ?1.37 lakh crore for the Railways, with a capital expenditure outlay of over ?2.45 lakh crore for the upcoming financial year. With a 14% higher capital expenditure over last year, the national transporter plans to utilise the funds to complete key stalled projects and enhance passenger amenities and safety.
  • Finance Minister Nirmala Sitharaman on Tuesday also announced that 2,000 km network will be brought under Kavach — an indigenous technology developed for safety, in 2022-23, and 400 new-generation Vande Bharat trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.

Vande Bharat trains

  1. Centre to set up high-level panel on urban policies

Modernisation of building bye-laws

  • The proposed high-level committee would comprise urban planners, urban economists and institutions who will make recommendations on policies, capacity-building, planning, implementation and governance.
  • She also proposed the modernisation of building bye-laws, town planning schemes and transit-oriented development.
  • “For developing India-specific knowledge in urban planning and design, and to deliver certified training in these areas, up to five existing academic institutions in different regions will be designated as centres of excellence. These centres will be provided endowment funds of ?250 crore each. In addition, the AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions,” she stated.
  • Proposed funding for housing under the Pradhan Mantri Awas Yojana (Urban) increased from ?8,000 crore in BE 2021-2022 to ?27,000 RE 2021-2022 to ?28,000 in RE 2022-2023. The Budget proposed to increase the grants-in-aid to the State governments from ?18,139.55 crore in BE 2021-2022 to ?37,824.35 crore in 2022-2023.
  • Allocation for construction of non-residential office buildings, including the Central Vista, Parliament and the Supreme Court, for 2022-2023 was proposed at ?2,600.99 crore, an increase from ?1,745.94 in BE 2021-2022.
  1. Road transport sees 68% hike in allocation
  • The allocation for the Ministry of Road Transport and Highways has seen a 68% increase with ?1,99,107.71 crore set aside for it in the Union Budget 2023. This is in line with the massive target Finance Minister Nirmala Sitharaman has set for expanding National Highways network by 25,000 km in 2022-2023.
  • To finance road projects, the government will also mobilise ?20,000 crore through innovative financing to complement public financing. Of the 35 multi-modal logistics parks the government plans across the country, four will be awarded in the next fiscal.
  • The Minister identified the PM Gati Shakti programme — which envisages co-ordinated planning across Ministries and States for development of infrastructure — as one of the four key pillars of the Budget.
  1. Govt. proposes new SEZ law
  • The government on Tuesday proposed to replace the existing law governing special economic zones (SEZs) with a new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.
  • The existing SEZ Act was enacted in 2006 with an aim to create export hubs and boost manufacturing in the country. However, these zones started losing their sheen after imposition of minimum alternate tax and introduction of sunset clause for removal of tax incentives.
  • These zones are treated as foreign entities in terms of provisions related to customs. Industry has time and again demanded continuation of tax benefits provided under the law. Units in SEZs used to enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years and 50% of the ploughed back export profit for another five years.
  • Presenting the Budget 2022-23, Finance Minister Nirmala Sitharaman said: “The Special Economic Zones Act will be replaced with a new legislation that will enable the states to become partners in Development of Enterprise and Service Hubs.” This will cover all large existing and new industrial enclaves to optimally utilise available infrastructure and enhance competitiveness of exports, she noted.
  • The government, she said, will also undertake reforms in customs administration of SEZs with a view to promote ease of doing business.
  • “We will also undertake reforms in Customs Administration of SEZs and it shall henceforth be fully IT driven and function on the Customs National Portal with a focus on higher facilitation and with only risk-based checks,” the Minister said.
  • This reform will be implemented by September 30, 2022.
  1. FM moots ?19,500­cr. push for solar manufacturing
  • The Centre has said it is committed to “facilitate” domestic manufacturing for the solar energy sector by looking to add 2,80,000 MW of installed capacity by 2030. To this end, Finance Minister Nirmala Sitharaman said the government envisioned an “additional allocation” of ?19,500 crore as a “production-linked incentive” for manufacturing solar modules.
  • She referred to Prime Minister Narendra Modi’s statements in Glasgow at the COP 26 last November of India striving to achieve ‘net zero’ carbon emissions by 2070. As part of this, India would increase its non-fossil energy capacity to 5,00,000 MW by 2030 and meet 50% of its energy requirements from renewable energy by 2030.
  • The Central Electricity Authority in its latest assessment has said as of early November, solar accounted for 11.8% of the installed capacity and had increased from 11.3% from four months ago. In the run-up to COP-26, the U.S. and India agreed to collaborate towards installing 4,50,000 MW of renewable energy by 2030.
  • India’s installed power capacity is projected to be 4,76,000 MW by 2021-22 and is expected to rise to at least 8,17,000 MW by 2030.
  1. MGNREGS allocation cut by 25% to ?73,000 cr.
  2. The Centre’s ?73,000 crore allocation for the flagship rural jobs scheme, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), in 2022-23 is 25% lower than the ?98,000 crore revised estimate for the scheme in the current year, reverting to the same insufficient amount allocated in the last budget. In fact, the MGNREGA did not find any mention during the Union Finance Minister’s Budget speech on Tuesday.
  3. MGNREGA is a demand driven scheme, guaranteeing 100 days of unskilled work to any rural household that wants it. During the first COVID-19 lockdown in 2020, when the scheme was ramped up and given its highest-ever budget of ?1.11 lakh crore, it provided a critical lifeline for a record 11 crore workers. In the next financial year 2021-22, the budget allocation dropped to ?73,000 crore, resulting in the scheme running out of funds and putting its balance sheet in negative territory by October.
  1. ‘New-generation anganwadis’ on the cards
  2. Two lakh anganwadis will be upgraded under the Saksham Anganwadis scheme which aims at new generation anganwadis that have better infrastructure and audio-visual aids for early child development, Finance Minister Nirmala Sitharaman said on Tuesday.
  • Presenting the Budget for 2022-23, Sitharaman said recognising the importance of Nari Shakti as the harbinger of Indias bright future and for women-led development during the Amrit Kaal, the government has comprehensively revamped the schemes of the Ministry of Women _amp; Child Development.
  • Accordingly, Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were launched recently to provide integrated benefits to women and children.
  • “Saksham Anganwadis are a new generation anganwadis that have better infrastructure and audio-visual aids, powered by clean energy and providing improved environment for early child development. Two lakh anganwadis will be upgraded under the scheme,” she said.

27. PM Awas Yojana gets an allocation of ?48,000 cr.

  • Finance Minister Nirmala Sitharaman on Tuesday allocated ?48,000 crore towards completion of 80 lakh houses under Prime Minister Awas Yojana (PMAY) in rural and urban areas during 2022-23 while presenting the Union Budget.
  • In 2022-23, 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban and ? 48,000 crore is allocated for this purpose, the finance minister said. The central government will work with state governments to reduce time required for all land and construction-related approvals for promoting affordable housing for the middle class and economically weaker sections in urban areas, Sitharaman says.
  • “Allocation of ?48,000 crore towards completion of 80 lakh homes under PMAY is a welcome step,” says Harshvardhan Patodia, president of the Confederation of Real Estate Developers Associations of India (CREDAI). Launched in 2015, PMAY addresses housing shortage among economically weaker sections including the slum dwellers by ensuring a_nbsp;pucca_nbsp;house to all eligible households by 2022.
  • The finance minister also allocated ?60,000 crore for the Nal Se Jal scheme, meant to expand the network of rural tap water connections, to cover 3.8 crore households in 2022-23. The minister said the tap water scheme, launched in August 2019, now covers around 8.8 crore households.
  • Sitharaman also announced the Vibrant Villages Programme which covers villages along the northern border of the country. “Border villages with sparse population, limited connectivity and infrastructure often get left out from the development gains.
  • Such villages on the northern border will be covered under the new Vibrant Villages Programme. The activities will include construction of village infrastructure, housing, tourist centres, road connectivity, provisioning of decentralized renewable energy, direct to home access for Doordarshan and educational channels, and support for livelihood generation,” she says.
  • Digital varsity and e-content for schools planned
  • A Digital Ecosystem for Skilling and Livelihood, the DESH-Stack e-portal, will be launched to empower citizens to skill, reskill or upskill through online training, Finance Minister Nirmala Sitharaman said on Tuesday. Presenting the Budget 2022-23 in Parliament, across the country with a personalised learning experience at their doorsteps.
  • This will be made available in different Indian languages and ICT (information and communication technology) formats. The university will be built on a networked hub-and-spoke model, with the hub building cutting-edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hubs and spokes, she shared.
  • The National Skill Qualification Framework (NSQF) will be aligned with dynamic industry needs, she added.
  • Sitharaman announced that 750 virtual labs in science and mathematics, as well as 75 skilling e-labs for a simulated learning environment, will be set up in 2022-23 to promote critical thinking skills and to give space for creativity.
  • The finance minister declared that start-ups will be promoted to facilitate Drone Shakti through varied applications and for drone-as-a-service (DrAAS). In select industrial training institutes (ITIs), in all states, the required courses for skilling will be started.
  • For this purpose, one class-one TV channel programme of PM eVIDYA will be expanded from 12 to 200 TV channels. This will enable all states to provide supplementary education in regional languages for classes 1-12, she said.
  • Government subsidies to decline by 39%
  • The governments subsidies on food, fertilizers and petroleum are estimated to decline by 39% to ?4,33,108 crore this fiscal and fall further by 27% to nearly ?3.18 lakh crore in 2022-23.
  • In its Revised Budget estimate for the 2021-22 fiscal, the government has pegged total subsidies at ?4,33,108 crore against the actual Budget Estimate of ?7,07,707 crore in the previous financial year. Out of this, the food subsidy is estimated to decline to ?2,86,469 crore in the current fiscal from ?5,41,330 crore in 2020-21, while petroleum subsidy is estimated to fall to ?6,517 crore from ?38,455 crore in the said period.
  • However, fertilizer subsidy is estimated to increase to ?1,40,122 crore during the ongoing fiscal from ?1,27,922 crore in the previous fiscal.
  • During the current fiscal, the Centre has hiked the subsidy for non-urea fertilizers several times due to a sharp rise in global prices. The move was aimed at ensuring that farmers continue to get di-ammonium phosphate (DAP) and other nutrients under the nutrient-based subsidy (NBS) policy at a reasonable rate.
  • For the next fiscal, the government said total subsidies were estimated to decline further to ?3,17,866 crore.
  • Govt. allocates ?13,134.93 cr. to Social Justice Ministry
  • The Social Justice and Empowerment Ministry was allocated 12% more in the Budget Estimate (BE) for 2022-2023 than 2021-2022 with ?13,134.93 crore for its two departments.
  • The Department of Social Justice and Empowerment, which handles welfare schemes for the Scheduled Castes, drug de-addiction programmes and schemes for senior citizens, among others, was allocated ?11,922.51 crore, up from ?10,517.62 crore in 2021-2022 BE and ?10,180 crore in RE 2021-2022.
  • The allocation for the Department of Empowerment of Persons with Disabilities went up slightly from ?1,171.77 crore in 2021-2022 BE to ?1,212.42 crore in 2022-2023.
  • Some Central schemes of the Department of SJ_amp;E saw a cut including Scholarships for Higher Education for Young Achievers Scheme (SHREYAS) for SCs that had its allocation reduced from ?450 crore in BE 2021-2022 to ?364 crore.
  • The allocation for SHREYAS for the OBCs and the Economically Backward Classes was also reduced from ?130 crore in 2021-2022 to ?80 crore. In total, allocation for the Central sector schemes and projects was reduced from ?1,395 crore in 2021-2022 to ?969.50 crore in 2022-2023 BE.