Union Budget 2k22 – Part 01

The annual budget is a financial statement of the estimated receipts and expenditure of the government for the financial year. The Constitution of India provides the provision for the annual budget under article 112. The Department of Economic Affairs, housed within the Ministry of Finance is the main body that is responsible for the annual budget each year.

Moving ahead from its 75^th independence that India would be celebrating this year (2022), this year’s annual budget strives to focus more on the long-term aspect, i.e., for the next 25 years, post which our country will celebrate its 100^th Independence Day. The budget this year provided impetus for growth based on four different priorities:

• PM Gati-Shakti
• Inclusive Development
• Productivity enhancement and investment; Sunrise opportunities, Energy transition and Climate action
• Financing of investments

Background and real time figures:

Before we take a look at the real time figures of this year’s budget, allow me to give you a brief background about the same.

Our budget is known to comprise of:

1.  Revenue budget

2.  Capital budget

Both revenue and capital budgets have expenditure and receipt components respectively. A detailed illustration of the receipt component of both, revenue budget and capital budget, has been provided below:

As for the expenditure component, it must be noted, that the forms of expenses do not lead to any form of asset creation for the government, for eg: administration expenses, subsidies provided by the government, salaries and pensions of government officers form the revenue expenditure component whereas the expenses that lead to asset creation for the government, eg: expenses in infrastructure constitute the capital expenditure component.

Following are some of the real time figures pertaining to the union budget:

Now, let us take a look at the four pillars of this year’s Union budget, two of which I shall elaborate here, while the remaining two shall be elaborated in my next blog piece:

PM Gati-Shakti National Master Plan:

The scope of PM Gati-Shakti National Master plan will encompass the seven engines (Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure) for economic transformation, seamless multi-modal connectivity and logistics efficiency, which, eventually is meant to increase India’s exports and increase the country’s profit margins.

This plan is intended to promote multi-modal connectivity. The projects pertaining to the aforesaid 7 engines in the National Infrastructure Pipeline is slated to be aligned with the PM Gati-Shakti framework.

Besides the aforementioned, several other infrastructural projects have been taken into consideration, for example:

The National Ropeways Development Program, Parvatmala is to be undertaken in a Public-Private-partnership (PPP) mode.

The same can be said for the construction of multi-modal logistics parks. Contracts are to be awarded through PPP mode in 2022-23 for their implementation, at four strategically important locations.

As far as railways are concerned, the government has proposed that One Station One Product concept will help local businesses and supply chains.

2000 km of railway network has been proposed to be brought under Kavach – the indigenous world class technology and capacity augmentation in 2022-23.

400 new generation Vande Bharat Trains to be manufactured during the course of the next three years.

In the spirit of PM-Gati-Shakti, it must also be mentioned that the government has come up with PM’s Development Initiative for North East Region (PM-DevINE) scheme for infrastructural and developmental projects, especially for the north eastern fringes of our country.

Inclusive Development:

From the agricultural aspect, Rs. 2.37 lakh crores of direct payment is to be made to 1.63 crore farmers for procurement of wheat and paddy.

Chemical-free natural farming is to be promoted throughout the country. The initial focus would be on farmers’ lands in 5km wide corridors alongside the river Ganga.

National Bank for Agricultural and Rural Development (NABARD) is to facilitate funds with blended capital to finance start-ups for agricultural and rural enterprises.

Kisan Drones for assessment of crops, digitization of land records, spraying of insecticides and nutrients have been proposed as well.

130 lakh MSMEs have been provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS).

Raising and Accelerating MSME performance (RAMP) programme with an outlay of Rs. 6000 crores is to be rolled out.

Digital Ecosystem for Skilling and Livelihood scheme is slated to be launched to empower citizens to skill/re-skill and upskill.

From the health perspective, “National Tele Mental Health Programme” for quality mental health counselling and care services is to be launched.

It is to be noted in this context that the union budget of India is an elaborate and an information intensive document that strives to rake up the economic condition of our country through various schemes/incentives and programmes.

Stay tuned for the second part of this blog piece!

 

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