FM Sitharaman unveils budget aimed at spurring spending to support growth

Total expenditure in 2022/23 seen at Rs 39.45 trillion

By Alasdair Pal

NEW DELHI (Reuters) -Indian Finance Minister Nirmala Sitharaman on Tuesday unveiled the budget for fiscal 2022-23, that aims to boost growth amid continued disruption from COVID-19 and rising inflation.

These are the highlights from Sitharaman's fiscal 2022-23 budget:

DEFICIT/EXPENDITURE

* Proposes fiscal deficit of 4.5% of GDP by 2025/26

* Projects fiscal deficit of 6.4% of GDP in 2022/23

* Revised fiscal deficit for 2021/22 at 6.9% of GDP

* Total expenditure in 2022/23 seen at 39.45 trillion rupees

* States will be allowed 4% fiscal deficit to GDP in FY23

* 50 year interest free loans over and above normal borrowing allocated to states

 

* Scheme for financial assistance to states for capital investment outlay to be 1 trillion rupees in 2022/23

TAXATION

* Import duty on certain chemicals are being reduced

* Customs duty exemption on steel scrap to be extended for another year for small- and medium-sized businesses

* Customs duty on stainless steel, flat products, high steel bars to be revoked

* Unblended fuel to get additional duty of 2 rupees per litre from October 2022

FINANCE

* Emergency credit line guarantee scheme for small and medium sized businesses to be extended to March 2023

* Energy transition and climate action will be a major government priority

* Public issue of Life Insurance Corporation expected shortly

* Initiatives from last year's budget have been provided adequate allocations in this budget

* Special Economic Zones Act to be replaced with new legislation

* To amend bankruptcy code to speed up resolution process

* Aims to lower winding up of companies to 6 months from 2 years currently

* Long term capital gain surcharge to be capped at 15%

DIGITAL CURRENCY

* To launch digital rupee using blockchain technology starting 2022/23

* To launch scheme for taxation of virtual digital assets

* Losses from sale of virtual digital assets cannot be offset against other income

* Income from virtual digital assets to be taxed at 30%

DEFENCE

* Govt committed to reducing defence imports

INFRASTRUCTURE

* 5G spectrum auctions to be conducted in 2022

* Scheme for design-led manufacturing for 5G will be part of production-linked scheme

* To award contracts to lay optical fibre in rural areas, completion in 2025

* 480 billion rupees set aside for affordable housing in 2022/23

* To allocate additional 195 billion rupees for production-linked incentives towards solar equipment manufacturing

AGRICULTURE

* Domestic scheme introduced to reduce dependence on oilseed imports

* Fund with blended capital raised under co-investment model to finance agriculture startups

* Railways to develop infrastructure for small farmers in 2022/23

TRANSPORT

* 400 energy efficient trains to be manufactured over next three years

* National highways network to be expanded by 25,000km in 2022/23

* Highways expansion to cost 200 billion rupees in 2022/23

* India budget: to bring out battery swapping policy

(Compiled by Alasdair Pal; Editing by Euan Rocha)