The Union Budget for 2022-23 is being designed in the context of a substantially different international environment than the preceding decade or so. For the first time in many years, central banks in industrialised nations are being compelled to tighten monetary policy.
Union Finance Minister Nirmala Sitharaman is expected to introduce the Union Budget 2022-23 on February 1, 2022. It should have been highlighted that the government’s primary focus in the previous budget was on health and rural infrastructure development.
This year, the administration is intended to make a number of significant initiatives to boost the economy and empower the ordinary man. Furthermore, the Omicron version of COVID-19 has caused worries in the midst of the economy’s recovery.
Budget 2022: What to Expect
The fourth budget preparation of the Modi 2.0 government began on October 12, 2021. Since then, many have started making Budget 2022 forecasts. Every year, taxpayers place their expectations for a prosperous fiscal year on the Union Budget, which addresses everything from lowering the tax burden to enhancing farmer income. While the recovery from the pandemic remains a top priority, the government may also prioritise infrastructure development, GDP, healthcare, MSMEs, income tax, provident fund, and other vital issues in the forthcoming Budget.
Plan for Economic Growth
While preparing Budget 2022, the government’s primary focus will be on developing a solid growth strategy to rebuild the economy battered by COVID-19. The Indian government’s economic adviser forecasts the country’s growth to range between 7% and 7.5%. However, the council cautioned the administration not to set unrealistic income expectations. Budget 2022 will also feature plans to use more income to create new assets.
MSMEs Get a Break on Compliance It’s no secret that the pandemic has taken a heavy toll on the small business sector. MSMEs are India’s second-largest job creators, employing over 11 crore people. Furthermore, they account for 48% of our country’s exports. MSMEs, which account for 30% of GDP, demand the government to lower the compliance burden in all areas, including taxes, loans, audits, and licencing.
The government is expected to phase away income tax deductions, exemptions, and direct tax
advantages. At the same time, it will rationalise the tax rate. The Finance Ministry is looking for proposals on how to provide compliance relief, provide tax predictability, and reduce litigation. The Ministry also stated that it has not investigated GST-related concerns because they fall under the scope of the GST Council.
Since a significant portion of our population has yet to be vaccinated, the government will continue to invest massive resources in healthcare, which will have an impact on the health insurance business. Our struggle against COVID-19 will continue over the next fiscal year, as new variants emerge all across the world. A road map for universal health care coverage may also be revealed.
Infrastructure improvements are most likely to be prioritised in Budget 2022. It might contain a thorough inventory of assets ranging from public roads to railroads that the government intends to monetize throughout the fiscal year 2022-23. According to reports, it may prioritise motorways and expressways in particular. The following infrastructure ministries are included in this plan:
- Highways and transportation
- Civil Aviation
- Waterways and Shipping Ports
- Natural Gas and Petroleum
- Food Distribution and Public Distribution
Finally, the government should announce plans to improve Internet connectivity infrastructure across the country, ensuring last-mile connectivity, access to inexpensive 5G devices, and, most crucially, assisting E-learning players with strong data protection legislation.
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