AIR Discussions (February 1st Week)

AIR SPOTLIGHT: HIGHLIGHTS OF THE UNION BUDGET 2022-23

PART A

India’s economic growth estimated at 2%to be the highest among all large economies.
60 lakh new jobsto be created under the productivity linked incentive scheme in 14 sectors.
PLI Schemes have the potential to create an additional production of Rs 30 lakh crore.
Entering Amrit Kaal, the 25 year-long lead up to India @100, the budget provides impetus for growth along four priorities:

PM GatiShakti
Inclusive Development
Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action.
Financing of investments

PM GatiShakti

The seven engines that drive PM GatiShakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure.
National Highways Network to be expanded by 25000 Km in 2022-23.
Rs 20000 Crore to be mobilized for National Highways Network expansion.
Contracts to be awarded through PPP mode for implementation of Multimodal Logistics Parks at four locations.
One Station One Product concept to help local businesses & supply chains.
2000 Km of railway network to be brought under Kavach.
400 new generation Vande Bharat Trains to be manufactured during the next three years.
100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.
National Ropeways Development Program, Parvatmala to be taken up on PPP mode.
Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 Km length.

Inclusive Development

2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat and paddy.
Chemical free Natural farming to be promoted throughout the county.
NABARD to facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
‘Kisan Drones’ for crop assessment, digitization of land records, spraying of insecticides and nutrients.
1400 crore outlay for implementation of the Ken – Betwa link project.
Udyam, e-shram, NCS and ASEEM portals to be interlinked.
ECLGS to be extended up to March 2023.
Guarantee cover under ECLGS to be expanded by Rs 50000 Crore to total cover of Rs 5 Lakh Crore.
Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under CGTMSE.
Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs 6000 Crore to be rolled out.
Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched
Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).
‘One class-One TV channel’ programme of PM eVIDYA to be expanded to 200 TV channels.
Virtual labs and skilling e-labs to be set up
Digital University for world-class quality universal education with personalised learning experience to be established.
An open platform for National Digital Health Ecosystem to be rolled out.
‘National Tele Mental Health Programme’ to be launched.
A network of 23 tele-mental health centres of excellence will be set up.
Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
Two lakh anganwadis to be upgraded to Saksham Anganwadis.
60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar, Nal se Jal.
48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana.
New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.

Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action.

100 per cent of 1.5 lakh post offices to come on the core banking system.
Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.
e-Passports with embedded chip and futuristic technology to be rolled out.
Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD)
Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.
Unique Land Parcel Identification Number for IT-based management of land records.
Centre for Processing Accelerated Corporate Exit (C-PACE) for speedy winding-up of companies.
An animation, visual effects, gaming, and comic (AVGC) promotion task force to be set-up
Scheme for design-led manufacturing to be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.
Special Economic Zones Act to be replaced with a new legislation
68% of capital procurement budget earmarked for domestic industry in 2022-23.
Government contribution to be provided for R&D in Sunrise Opportunities
Additional allocation of Rs. 19,500 crore for PLI for manufacture of high efficiency solar modules
Five to seven per cent biomass pellets to be co-fired in thermal power plants:
Four pilot projects to be set up for coal gasification and conversion of coal into chemicals for the industry
Financial support to farmers belonging to SC/ST, who want to take up agro-forestry.

Financing of investments

‘Effective Capital Expenditure’ of Central Government estimated at Rs. 10.68 lakh crore in 2022-23, 4.1% of GDP.
Outlay for capital expenditure stepped up sharply by 35.4% to Rs. 7.50 lakh crore in 2022-23 (2.9% of GDP)
World-class foreign universities and institutions to be allowed in the GIFT City.
An International Arbitration Centre to be set up
Data Centres and Energy Storage Systems to be given infrastructure status.
Blended funds to be promoted for sunrise sectors.
Sovereign Green Bonds to be issued for mobilizing resources for green infrastructure.
Introduction of Digital Rupee by the Reserve Bank of India starting 2022-23.
Enhanced outlay for ‘Scheme for Financial Assistance to States for Capital Investment’:

From Rs. 10,000 crore in Budget Estimates to Rs. 15,000 crore in Revised Estimates for current year

Allocation of Rs. 1 lakh crore in 2022-23 to assist the states in catalysing overall investments in the economy

In 2022-23, States will be allowed a fiscal deficit of 4% of GSDP, of which 0.5% will be tied to power sector reforms

Fiscal Management

Budget Estimates 2021-22: Rs. 34.83 lakh crore
Revised Estimates 2021-22: Rs. 37.70 lakh crore
Total expenditure in 2022-23 estimated at Rs. 39.45 lakh crore
Total receipts other than borrowings in 2022-23 estimated at Rs. 22.84 lakh crore
Fiscal deficit in current year: 6.9% of GDP (against 6.8% in Budget Estimates)
Fiscal deficit in 2022-23 estimated at 6.4% of GDP

PART B

DIRECT TAXES

To take forward the policy of stable and predictable tax regime:

Provision to file an Updated Return on payment of additional tax. Can be filed within two years from the end of the relevant assessment year.
Alternate Minimum Tax paid by cooperatives brought down from 18.5 per cent to 15 per cent.
Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crores.
Payment of annuity and lump sum amount from insurance scheme to be allowed to differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardian attaining the age of 60 years.
Tax deduction limit increased from 10 per cent to 14 per cent on employer’s contribution to the NPS account of State Government employees.
Period of incorporation extended by one year, up to 31.03.2023 for eligible start-ups to avail tax benefit.
Last date for commencement of manufacturing or production under section 115BAB extended by one year
Any income from transfer of any virtual digital asset to be taxed at the rate of 30 per cent.
In cases where question of law is identical to the one pending in High Court or Supreme Court, the filing of appeal by the department shall be deferred till such question of law is decided by the court.
Subject to specified conditions, the following to be exempt from tax
- Income of a non-resident from offshore derivative instruments.
- Income from over the counter derivatives issued by an offshore banking unit.
- Income from royalty and interest on account of lease of ship.
- Income received from portfolio management services in IFSC.
Surcharge on AOPs (consortium formed to execute a contract) capped at 15 per cent.
Surcharge on long term capital gains arising on transfer of any type of assets capped at 15 per cent.
Any surcharge or cess on income and profits not allowable as business expenditure.
Benefits passed on to agents as business promotion strategy taxable in hands of agents.

INDIRECT TAXES

Customs Administration of SEZs to be fully IT driven and function on the Customs National Portal – shall be implemented by 30^thSeptember 2022.
Gradually phasing out of the concessional rates in capital goods and project imports; and applying a moderate tariff of 7.5 percent – conducive to the growth of domestic sector and ‘Make in India’.
More than 350 exemption entries proposed to be gradually phased out
Simplifying the Customs rate and tariff structure
Electronics: Customs duty rates to be calibrated, Duty concessions to parts of transformer of mobile phone chargers and camera lens of mobile camera module
Gems and Jewellery: Customs duty on cut and polished diamonds and gemstones being reduced to 5 per cent; A simplified regulatory framework, Customs duty of at least Rs 400 per Kg to be paid on imitation jewellery import
Chemicals: Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining being reduced; Duty is being raised on sodium cyanide.
MSME: Customs duty on umbrellas being raised to 20 per cent. Exemption being rationalised on implements and tools for agri-sector which are manufactured in India. Customs duty exemption given to steel scrap last year extended for another year. Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked
Exports: exemptions being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes. Duty being reduced on certain inputs required for shrimp aquaculture.
Unblended fuel to attract an additional differential excise duty of Rs 2/ litre

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1794165

NEWS IN BRIEF: PRELIMS SPECIAL

46th Raising day of Indian Coast Guard

The year 2022 marks the 46th Raising Day of the Indian Coast Guard which was founded on the 1st of February, 1978.
Unlike the Indian navy which is responsible for securing the freedom of India on waters through maintaining, training, and equipping combat-ready naval forces capable of winning wars, deterring aggression, and maintaining freedom of the seas; the Indian Coast Guard is into law enforcement, search and rescue in the sea.
It was established by the Coast Guard Act, 1978. It performs non-military functions.
It operates under the Ministry of Defence.
It has jurisdiction over the territorial waters of India including contiguous zone and exclusive economic zone.
It is responsible for marine environment protection in maritime zones of India and is a coordinating authority for response to oil spills in Indian waters.

https://newsonair.gov.in/News?title=Indian-Coast-Guard-to-celebrate-its-46th-Raising-Day-on-Feb-1&id=434537

‘Vagir’: The Fifth Scorpene Submarine

The sea trials for the fifth scorpene submarine of Project 75 commenced after which it will be named ‘Vagir’.
Vagir is the fifth Scorpene (Kalvari) class submarine constructed by Mazagon Dock Shipbuilders Limited in collaboration with the Naval Group of France.
It is equipped with advanced acoustic techniques.
The submarine was named after INS Vagir which was a Russian Vela-class submarine that served in the Navy for a long time.
This is capable of undertaking missions like anti-surface warfare, anti-submarine warfare, intelligence gathering, mine laying and area surveillance.
Scorpene type submarine is a conventional submarine designed by the Naval Group for the export market.

World Wetlands Day

World Wetlands Day (2^nd Feb) celebrated at Sultanpur National Park.
Khijadiya Wildlife Sanctuary in Gujarat and Bakhira Wildlife Sanctuary in UP have been added to the List of Ramsar Sites.
India now has a network of 49 Ramsar sites covering an area of 10,93,636 hectares, the highest in South Asia.

https://newsonair.gov.in/News?title=World-Wetlands-Day%3A-Wetlands-action-for-people-and-planet&id=434669

Chandrayaan 3

Chandrayaan 3 is scheduled to be launched in August 2022 by ISRO.
Chandrayaan 3 spacecraft is the 3^rd lunar exploration expedition, outlined by the Indian Space Research Organisation (ISRO).
ISRO planned this spacecraft to exhibit India’s soft landing proficiency on a stellar body.
It will only consist of a rover and lander and will communicate to the earth via an orbiter from Chandrayaan 2.
India aims to examine the Moon’s surface, especially areas that have not been receiving sunlight in some billion years.
Scientists and astronomers are suspecting the presence of ice and abundant mineral stocks in these darker parts of the lunar surface.
In addition, this exploration will not limit to the surface but aim to study the sub-surface and exosphere.
It will study the surface by taking images at a distance of 100km from the lunar orbit.

https://newsonair.gov.in/News?title=ISRO-to-launch-Chandrayan-3-in-August-this-year&id=434808

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