Union Budget 2022: Key takeaways under the 4 pillars

1 Feb 2022 , 11:12 AM

Finance Minister Nirmala Sitharaman presented a growth-oriented budget on Tuesday. The Budget was presented in a paperless manner and has eliminated the traditional ‘bahi-khata’ format. She started her speech by showing empathy to those who suffered during the pandemic.
This year, the key budgetary announcements were clubbed under 4 categories or pillars.
1)      PM GatiShakti
2)      Inclusive Development
3)      Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition & Climate Action
4)      Financing of Investments
Let us deep dive into the key announcements under each of these pillars.

Pillar 1: PM GatiShakti

Will encompass the following 7 engines of economic transformation
*  Roads
*  Railways
*  Airports
*  Ports
*  Mass Transport
*  Waterways
*  Logistics infrastructure

Above engines will pull forward the economy in unison and are supported by the complementary roles of Energy Transmission, IT Communication, Bulk Water & Sewerage, and Social Infrastructure. Finally, the approach is powered by Clean Energy and Sabka Prayas — the efforts of the Central Government, the state governments, and the private sector together — leading to huge job and entrepreneurial opportunities for all, especially the youth. This pillar will also include the infrastructure developed by the state governments as per the GatiShakti Master Plan. The focus will be on planning, financing, innovation and speedier implementation.

PM Gati Shakti masterplan for expressway will be formulated in 2022-23 to facilitate faster movement of people and goods. The National Highways network will be expanded by 25,000 km in 2022-23. Also, Rs 20,000 crore will be mobilized through innovative ways of financing to compliment the public resources.

Contracts for implementations of multi-model logistic parks at four locations through PPP mode will be awarded in 2022-23. Railways will develop new products and efficient logistic services for small farmers and small & medium enterprises to provide seamless solutions for movements of parcel. “One station, One product” concept will be popularized to help local businesses and supply chains. 2,000 km of network will brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23.
400 new generation Vande Bharat trains with better energy efficiency & passenger riding experience will be manufactured during the next 3 years. 100 PM GatiShakti Cargo terminals to be developed during the next 3 years.

Innovative ways of financing and faster implementation will be encouraged for building metro systems of appropriate type at scale. Multi-model connectivity between mass urban transport and railway stations will be facilitated at priority.

As a preferred ecologically sustainable alternative to conventional roads in hilly areas, the National Ropeways Development Program will be taken up in PPP mode. The aim is to improve connectivity, convenience for commuters besides promoting tourism. Contracts for 8 ropeway projects for 60 km will be awarded in 2022-23.

Pillar 2: Inclusive Development
Agriculture
·         Chemical free natural farming will be promoted throughout the country with a focus on farmers’ lands in 5 km wide corridor along the river Ganga at the first stage.
·         2023 has been announced as the International Year of Millets. Support will be provided for post-harvest value addition, enhancing domestic consumption, and for branding millet products nationally and internationally.
·         A rationalized and comprehensive scheme to increase domestic production of oil seeds will be implemented
·         For delivery of digital hi-tech services to farmers, a scheme will be launched under the PPP mode
·         Use of Kisan Drones will be promoted for crop assessment, digitization of land records, spraying of insecticides and nutrients
·         States will be encouraged to revise syllabi of agricultural universities to meet needs of natural, zero-budget and organic farming, modern-day agriculture, value addition and management
·         A fund with blended capital raised under co-investment model facilitated through NABARD will be set up to finance start-ups in agriculture and rural enterprises relevant for farm produce value chain.

Ken Betwa project and Other River Linking Projects
·         Ken Betwa Linking project will be started at an estimated cost of Rs 44,605 crore. The project is aimed at providing irrigation benefits to 9 lakh hectare farmers’ land, drinking water to 62 lakh people, 103 MW hydropower and 27 MW solar power.
·         Draft DPRs of 5 river links, namely Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been finalized

Food Processing
·         For farmers to adopt suitable varieties of fruits and vegetables and to use appropriate production and harvesting technique, the government will provide a comprehensive package
 
MSME
·         Udyam, e-Shram, NCS and ASEEM portals will be interlinked and their scope will be widened
·         Emergency Credit Line Guarantee is extended till March 2023. Guarantee cover will be expanded by Rs. 50,000 crore to a total cover of Rs. 5 lakh crore. Additional amount is earmarked exclusively for hospitality and related sectors.
·         Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) to be revamped with required fund infusion. Will facilitate additional credit of Rs. 2 lakh crore for MSMEs.
·         Raising and Accelerating MSME Performance (RAMP) program will be rolled out with outlay of Rs. 6,000 crore over the next five years
 
Skill Development
·         Skilling programs and partnerships with the MSME industry will be reoriented to promote continuous skilling avenues, sustainability and employment
·         Digital ecosystem for skilling and livelihood, the Desh stack e-portal will be launched
·         Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS)

Universalization of Quality Education
·         To enable all states to provide supplementary education in regional languages, to children in classes 1 – 12, “One Class One TV Channel” program of PM eVidya will be expanded from 12 to 200 TV channels
·         750 virtual labs in science and mathematics, and 75 skilling e-labs for simulated learning environment, will be set-up in 2022-23
·         High-quality e-content in all spoken languages will be developed for delivery via internet, mobile phones, TV and radio through Digital Teachers
·         A competitive mechanism for development of quality e-content by the teachers will be set-up

Digital University
·         A Digital University will be established to provide access to students across the country for world-class quality universal education with personalized learning experience at their doorsteps

Ayushman Bharat Digital Mission
·         An open platform, for the National Digital Health Ecosystem will be rolled out
 
National Tele Mental Health Program
·         This program will be launched with a network of 23 tele-mental health centers of excellence
 
Mission Shakti, Mission Vatsalya, Saksham Anganwadi & Poshan 2.0
·         3 schemes, namely, Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were launched recently to provide integrated benefits to women and children

Har Ghar, Nal Se Jal
·         Allocated Rs. 60,000 crore to cover 3.8 crore households in 2022-23

Housing for All
·         Allocated Rs 48,000 crore to complete 80 lakh houses in 2022-23

Prime Minister’s Development Initiative for North East Region (PMDevINE)
·         This new scheme will be implemented through the North Eastern Council, at an initial allocation of Rs 1,500 crore
 
Aspirational Blocks Program
·         95% of those 112 districts have made significant progress in key sectors such as health, nutrition, financial inclusion and basic infrastructure. In 2022-23, the programme will focus on blocks in those districts.
 
Vibrant Villages Program
·         Border villages will be covered under the new Vibrant Villages Program
 
Anytime — Anywhere Post Office Savings
·         In 2022, 100% of 1.5 lakh post offices to come under Core Banking System, enabling financial inclusion
 
Digital Banking
·         Plans to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks
 
Digital Payments
·         Financial support for digital payment ecosystem announced in the previous Budget will continue in 2022-23
 
Pillar 3: Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition & Climate Action
Productivity Enhancement & Investment: Ease of Doing Business 2.0 & Ease of Living
·         In recent years, over 25,000 compliances were reduced and 1,486 Union laws were repealed
·         For the Amrit Kaal, next phase Ease of Doing Business 2.0 and Ease of Living will be launched

Green Clearances
·         Scope of the PARIVESH portal will be expanded, to provide information to the applicants. It will enable application for all four approvals through a single form, and tracking of the process through Centralized Processing Centre-Green (CPC-Green).

e-Passport
·         Issuance of e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23 to enhance convenience for the citizens in their overseas travel

Urban Development
·         A high-level committee of reputed urban planners, urban economists and institutions will be formed to make recommendations on urban sector policies, capacity building, planning, implementation and governance
 
Urban Planning Support to States
·         For urban capacity building, support will be provided to the states. The Central Government’s financial support for mass transit projects and AMRUT scheme will be leveraged for formulation of action plans and their implementation for facilitating TOD and TPS by the states.
·         Up to five existing academic institutions in different regions will be designated as centers of excellence and they will be provided endowment funds of Rs 250 crore each. In addition, AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions
 
Clean & Sustainable Mobility
·         Promote a shift to use of public transport in urban areas
 
Battery Swapping Policy
·         A battery swapping policy will be brought out and inter-operability standards will be formulated.
 
Land Records Management
·         States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records
·         The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’ and ‘anywhere registration’ will be promoted
 
 
Insolvency and Bankruptcy Code
·         Necessary amendments in the Code will be carried out to enhance the efficacy of the resolution process and facilitate cross border insolvency resolution
 
Accelerated Corporate Exit
·         Centre for Processing Accelerated Corporate Exit (C-PACE) with process re-engineering, will be established to facilitate and speed up the voluntary winding-up of these companies from the currently required 2 years to less than 6 months
 
Government Procurement
·         Provisions have been made for payment of 75% of running bills, mandatorily within 10 days and for encouraging settlement of disputes through conciliation
·         A completely paperless, end-to-end online e-Bill System will be launched for use by all central ministries for their procurements
·         To reduce indirect cost for suppliers and work-contractors, the use of surety bonds as a substitute for bank guarantee will be made acceptable in government procurements
 
AVGC Promotion Task Force
·         The animation, visual effects, gaming, and comic (AVGC) promotion task force with all stakeholders will be set-up to make key recommendations
 
Telecom Sector
·         Required spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within 2022-23 by private telecom providers
·         A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme
·         5% of annual collections under the Universal Service Obligation Fund will be allocated to promote R&D and commercialization of technologies and solutions
·         The contracts for laying optical fibre in all villages, including remote areas, will be awarded under the Bharatnet project through PPP in 2022-23
 
Export Promotion
·         The Special Economic Zones Act will be replaced with a new legislation that will enable the states to become partners in ‘Development of Enterprise and Service Hubs’
 
AtmaNirbharta in Defence
·         68% of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58% in 2021-22
·         Defence R&D will be opened up for industry, startups and academia with 25% of defence R&D budget earmarked
 
Sunrise Opportunities
·         Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems will be promoted
·         For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry and public institutions, government contribution will be provided
 
Energy Transition and Climate Action
·         Budget proposes several near-term and long-term actions
 
Solar Power
·         To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of Rs. 19,500 crore for Production Linked Incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.
 
Circular Economy
·         Focus will be on addressing important cross cutting issues of infrastructure, reverse logistics, technology upgradation and integration with informal sector. This will be supported by active public policies covering regulations, extended producers’ responsibilities framework and innovation facilitation.
 
Transition to Carbon Neutral Economy
·         5-7% biomass pellets will be co-fired in thermal power plants resulting in CO₂ savings of 38 MMT annually. This will also provide extra income to farmers and job opportunities to locals and help avoid stubble burning in agriculture fields.
·         Energy efficiency and savings measures will be promoted. This will be done in large commercial buildings through the Energy Service Company (ESCO) business model.
·         4 pilot projects for coal gasification and conversion of coal into chemicals required for the industry will be set-up to evolve technical and financial viability
·         Policies and required legislative changes to promote agro forestry and private forestry will be brought in. In addition, financial support will be provided to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry.
 
Pillar 4: Financing of Investments
Public Capital Investment
·         Public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23
·         Outlay for capital expenditure in the Union Budget is increased 35.4% to Rs 7.50 lakh crore in 2022-23

Effective Capital Expenditure
·         The ‘Effective Capital Expenditure’ of the Central Government is estimated at Rs 10.68 lakh crore in 2022-23, which will be about 4.1% of GDP

Green Bonds
·         As a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.

GIFT-IFSC
·         World-class foreign universities and institutions will be allowed in the GIFT City to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics
·         An International Arbitration Centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence
·         Services for global capital for sustainable & climate finance in the country will be facilitated in the GIFT City

Infrastructure Status
·         Data Centers and Energy Storage Systems including dense charging infrastructure and grid-scale battery systems will be included in the harmonized list of infrastructure. This will facilitate credit availability for digital infrastructure and clean energy storage.
 
Venture Capital and Private Equity Investment
·         An expert committee will be set up to examine and suggest appropriate measures to scale up investments.
 
Blended Finance
·         To encourage important sunrise sectors such as Climate Action, Deep-Tech, Digital Economy, Pharma and Agri-Tech, the government will promote thematic funds for blended finance with the government’s share being limited to 20% and the funds being managed by private fund managers.
 
Financial Viability of Infrastructure Projects
·         Stepping-up of public investment will be complemented by private capital at a significant scale.
·         Measures will be taken to enhance financial viability of projects including PPP, with technical and knowledge assistance from multi-lateral agencies.
·         Enhanced financial viability shall also be obtained by adopting global best practices, innovative ways of financing, and balanced risk allocation.
 
Digital Rupee
·         RBI will introduce Digital Rupee, using blockchain and other technologies, starting 2022-23
 
Financial Assistance to States for Capital Investment
·         Outlay for this scheme is being enhanced from Rs 10,000 crore in the Budget Estimates to Rs 15,000 crore in the Revised Estimates for the current year
·         For 2022-23, the allocation is Rs 1 lakh crore to assist the states in catalysing overall investments in the economy.
In 2022-23, the states will be allowed a fiscal deficit of 4% of GSDP of which 0.5% will be tied to power sector reforms