Budget 2022 expectations: Massive spending, focus on electoral states

Union Budget 2022: Finance Minister Nirmala Sitharaman presents the 2022-23 budget

New Delhi:
Finance Minister Nirmala Sitharaman announces the 2022 budget. She is expected to increase infrastructure spending, but budget constraints leave little room for concessions for households affected by the pandemic.

Here is your 10-point guide to this story:

  1. The budget for the fiscal year beginning April 1 is expected to announce measures to lift growth above 2019 levels as the economy recovers from the worst recession since independence.

  2. It is unclear whether Nirmala Sitharaman will tinker with income tax rates, but many hope the exemption limit of Rs 2.5 lakh will be raised amid rising prices of everyday items.

  3. A day before the budget, the government’s annual economic survey said India would lead the world in economic growth at 8-8.5% and concluded it had room to spend more. .

  4. The budget comes days before elections in Uttar Pradesh and four other states, raising expectations of increased rural and agricultural spending.

  5. Asia’s third-largest economy is expected to grow 9.2% in the fiscal year ending in March, following a 7.3% contraction in the previous one, but the recovery now appears to be running out of steam .

  6. To grow the economy to $5 trillion by 2025, Ms Sitharaman should continue to push for large-scale spending in hopes of accelerating investment and jobs.

  7. Under plans to spend more on infrastructure, experts expect to see a higher allocation for roads, railways and water.

  8. Ease of tax compliance, simplification and digitization as well as ease of doing business should be a focus, as should support measures for small businesses.

  9. Healthy tax revenues and an ambitious divestment plan could help contain the budget deficit to 5% next year.

  10. This year, the budget deficit is expected to be 6.3%, below the projection of 6.8%, due to buoyant tax revenues, restrained spending and higher nominal GDP growth.