Budget 2022 Reaction: How The Economy of India Is On The Growth Path?

Nirmala Sitharaman, the Finance Minister, introduced her fourth Union Budget to Parliament today. Several major announcements have been made, and experts from a range of sectors have weighed in on this growth-oriented budget.

Mr. Rajeev Sharma, Chief Strategy Officer, Mitsubishi Electric India Pvt. Ltd has said "This is a growth-oriented Budget, I am sure that stepping up the capital expenditure sharply by 35.4% will have an incremental effect on the overall growth of the economy. It is good that the policymakers understand that nearly half of our population is likely to be living in urban areas by 2047 when India is at 100. The announcement for urban capacity building like mass transit, planning help, etc. would act as a good principle for the development of the country. The budget has demonstrated a good balance between today's needs and the future's demand."

Vikas Singhania, CEO of TradeSmart has claimed that "A short and sweet budget by the finance minister with no tweaks on taxes but a lot of measures to promote overall economic activity. The budgetary CAPEX has been increased by 19% while at the same time providing impetus to EVs, solar power and renewable energy, agriculture, blending of fuels, startups, the introduction of digital currency, giving legitimacy to cryptocurrencies and green bonds all point towards the government sticking to the growth path." On a variety of fronts, he has stated his views, which are summarised below.

EV Sector: He has said that "The EV sector received a boost with cities being encouraged to introduce zero-fossil fuel policies and urban residents encouraged to increase ridership on public transport and use of electric mobility. The private sector has been encouraged to build business models for battery-as-a-service. To encourage the use of EVs, battery swapping and charging infrastructure will be scaled up and interoperability standards formulated. The steps will go a long way in promoting EV sales in the country."

National Highways: Vikas Singhania has stated "Road construction given a boost by increasing the target to 25,000 km of National Highways construction. Comparing this to the current construction of around 13,000 km the target is almost double the current level. Also, bringing all key transport ministries under the Gati Shakti plan is a positive step for the logistics sector."

Cryptocurrency + Taxation: He has added that "Legalising cryptocurrencies the finance minister has imposed a 30% tax on cryptocurrencies and NFTs brings it at par with those charged on speculative income. Thought on the higher side, traders can now trade in these assets without fear of government intervention. The Budget has removed the legal uncertainty on Crypto Currency trading. People can trade in Crypto but they will have to pay tax. It is to be checked in fine prints, that if corporates trade in crypto then, the corporate tax is applicable or 30% or whichever is higher."

On the subject of cryptocurrency and taxation, Archit Gupta, Founder and CEO, ClearTax has said "Government has brought in 30% tax on cryptos income, where no deduction for any expenses except cost of acquisition shall be allowed. Gift of virtual assets shall also be taxed for the recipient. This clears the air on taxes for cryptos, however, there are several types of incomes people earn from cryptos and hopefully more clarity will be available in the Budget documents."

The Finance Minister, Nirmala Sitharaman, has announced a new provision that would allow taxpayers to file an amended ITR. Commenting on the same Archit Gupta has further said that "If the time for revising ITR has passed or it has already been assessed, a taxpayer could no longer amend and pay additional taxes. (Earlier time period was end of AY). If the taxpayer wants to pay additional taxes and amend an already-filed return, it can be done now, within 2 years from the end of the relevant assessment year. The intention is to allow taxpayers an opportunity to pay any unpaid taxes without severe consequences, in case they have made a mistake at the time of filing and return is already processed."

On the healthcare sector front, Prabhdeep Singh, Founder and CEO, StanPlus has stated that "The upcoming launch of an open platform for the National Digital Health Ecosystem is exciting news for us. It will include digital registries of health providers and facilities, a unique health identity, and universal access to health facilities, all of which will aid us in saving lives by allowing us access to contextual health information in quick time, enabling faster and better medical response in emergencies."

On the subject of housing and real estate, Priyadarshi Mishra, CEO/Founder Design & Construct has said "The inception of dedicated institutes for urban planning in real estate sector will help to maximize the urban development as well as minimize the complexities in urban planning. The budget is a great initiative to make housing affordable for a large section of the country."

Owing to the government's focus on Startups, Priyadarshi Mishra further added that "With the announcement of Union Budget 2022 by honorable Finance Minister, the budget has focussed more on the Made in India initiative to minimize the dependency. To encourage the start-up ecosystem government has relaxed the tax and introduced flexible policies to help start-ups in the country. With an expected growth of 9.27% percent the budget has given enough flexibility for startups which will help to create new job prospects. The use of drones for startups will push the start-ups for excellence. The promotion of fintech and technology-based development will help the economy gain a pace as well as create a better job prospect for individuals."

Priyadarshi Mishra also commented on infrastructural expenditures that "Infra spends in PPP mode seem to be the thrust of the Union Budget 2022. Start-ups in the agriculture sector are encouraged with a commitment to provide support for FPOs, technology including IT-based support. ECLGS extended up to March 2023 to aid MSME sector financing needs. The support for agriculture startup in the union budget will make FPO's stronger as well as strengthen the IT support."

In her budget statement today, the Finance Minister also announced that the ECLGS plan will be extended till March 2023, with a total cover of Rs 5 lakh crore. SMOOR's Founder-Director and CEO, Vimal Sharma expressed that "We are grateful to the honorable Finance Minister for extending the ECLG scheme to the MSME sector. This will help us access the capital needed for growth and deploy efficiently."