Budget 2022-2023
Speech of
Nirmala Sitharaman
Minister of Finance
February 1, 2022
Hon’ble Speaker,
I present the Budget for the year 2022-23.
Introduction
1. At the outset, I want to take a moment to express my empathy for those who had to bear adverse health and economic effects of the pandemic.
2. The overall, sharp rebound and recovery of the economy is reflective
of our country’s strong resilience. India’s economic growth in the current
year is estimated to be 9.2 per cent, highest among all large economies.
3. I recognise we are in the midst of an Omicron wave, with high
incidence, but milder symptoms. Further, the speed and coverage of our
vaccination campaign has helped greatly. With the accelerated
improvement of health infrastructure in the past two years, we are in a
strong position to withstand challenges. I am confident that with Sabka
Prayas we will continue our journey of strong growth.
4. Hon’ble Speaker, we are marking Azadi ka Amrit Mahotsav, and
have entered into Amrit Kaal, the 25-year-long leadup to India@100.
Hon’ble Prime Minister in his Independence Day address had set-out the
vision for India@100.
5. By achieving certain goals during the Amrit Kaal, our government
aims to attain the vision. They are:
Complementing the macro-
economic level growth focus with a
micro-economic level all-inclusive welfare focus,
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Promoting digital economy & fintech, technology enabled
development, energy transition, and climate action, and
Relying on virtuous cycle starting from private investment with
public capital investment helping to crowd-in private
investment.
6. Since 2014 our government’s focus has been on empowerment of
citizens, especially the poor and the marginalised. Measures have included
programmes that have provided housing, electricity, cooking gas, and
access to water. We also have programmes for ensuring financial inclusion
and direct benefit transfers. We are committed to strengthening the
abilities of the poor to tap all opportunities. Our government constantly
strives to provide the necessary ecosystem for the middle classes – a vast
and wide section which is populated across various middle-income brackets
– to make use of the opportunities they so desire.
7. This Budget seeks to lay the foundation and give a blueprint to steer
the economy over the Amrit Kaal of the next 25 years – from India at 75 to
India at 100. It continues to build on the vision drawn in the Budget of 2021-
22. Its fundamental tenets, which included transparency of financial
statement and fiscal position, reflect the government’s intent, strengths,
and challenges. This continues to guide us.
8. The initiatives of the last year’s Budget have seen significant
progress and have been provided with adequate allocations in this Budget
as well.
9. The strengthening of health infrastructure, speedy implementation
of the vaccination programme, and the nation-wide resilient response to
the current wave of the pandemic, are evident for all.
10. The Productivity Linked Incentive in 14 sectors for achieving the
vision of AtmaNirbhar Bharat has received excellent response, with
potential to create 60 lakh new jobs, and an additional production of ` 30
lakh crore during next 5 years.
11. Towards implementation of the new Public Sector Enterprise policy,
the strategic transfer of ownership of Air India has been completed. The
strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been
selected. The public issue of the LIC is expected shortly. Others too are in
the process for 2022-23.3
12. The National Bank for Financing Infrastructure and Development
(NaBFID) and National Asset Reconstruction Company have commenced
their activities.
13. Hon'ble Speaker sir, Budget 2021-22 had provided a sharp increase
in provision for public investment or capital expenditure. Throughout the
year, with the Hon'ble Prime Minister, guiding the implementation, our
economic recovery is continuing to benefit from the multiplier effect.
14. This Budget continues to provide impetus for growth. It lays a
parallel track of (1) a blueprint for the Amrit Kaal, which is futuristic and
inclusive. This will directly benefit our youth, women, farmers, the
Scheduled Castes and the Scheduled Tribes. And (2) big public investment
for modern infrastructure, readying for India at 100. This shall be guided by
PM GatiShakti and be benefited by the synergy of multi-modal approach.
Moving forward, on this parallel track, we lay the following four priorities:
PM GatiShakti
Inclusive Development
Productivity Enhancement & Investment, Sunrise
Opportunities, Energy Transition, and Climate Action
Financing of Investments
PM GatiShakti
15. PM GatiShakti is a transformative approach for economic growth
and sustainable development. The approach is driven by seven engines,
namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and
Logistics Infrastructure. All seven engines will pull forward the economy in
unison. These engines 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.
PM GatiShakti National Master Plan
16. The scope of PM GatiShakti National Master Plan will encompass the
seven engines for economic transformation, seamless multimodal
connectivity and logistics efficiency. It will also include the infrastructure
developed by the state governments as per the GatiShakti Master Plan. The
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focus will be on planning, financing including through innovative ways, use
of technology, and speedier implementation.
17. The projects pertaining to these 7 engines in the National
Infrastructure Pipeline will be aligned with PM GatiShakti framework. The
touchstone of the Master Plan will be world-class modern infrastructure
and logistics synergy among different modes of movement – both of people
and goods – and location of projects. This will help raise productivity, and
accelerate economic growth and development.
Road Transport
18. PM GatiShakti Master Plan for Expressways 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. ` 20,000
crore will be mobilized through innovative ways of financing to complement
the public resources.
Seamless Multimodal Movement of Goods and People
19. The data exchange among all mode operators will be brought on
Unified Logistics Interface Platform (ULIP), designed for Application
Programming Interface (API). This will provide for efficient movement of
goods through different modes, reducing logistics cost and time, assisting
just-in-time inventory management, and in eliminating tedious
documentation. Most importantly, this will provide real time information to
all stakeholders, and improve international competitiveness. Open-source
mobility stack, for organizing seamless travel of passengers will also be
facilitated.
Multimodal Logistics Parks
20. Contracts for implementation of Multimodal Logistics Parks at four
locations through PPP mode will be awarded in 2022-23.
Railways
21. Railways will develop new products and efficient logistics services
for small farmers and Small and Medium Enterprises, besides taking the
lead in integration of Postal and Railways networks to provide seamless
solutions for movement of parcels.
22. ‘One Station-One Product’ concept will be popularized to help local
businesses & supply chains.
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23. As a part of Atmanirbhar Bharat, 2,000 km of network will be
brought under Kavach, the indigenous world-class technology for safety and
capacity augmentation in 2022-23. Four hundred new-generation Vande
Bharat Trains with better energy efficiency and passenger riding experience
will be developed and manufactured during the next three years.
24. One hundred PM GatiShakti Cargo Terminals for multimodal logistics
facilities will be developed during the next three years.
Mass Urban Transport including Connectivity to Railways
25. Innovative ways of financing and faster implementation will be
encouraged for building metro systems of appropriate type at scale.
Multimodal connectivity between mass urban transport and railway
stations will be facilitated on priority. Design of metro systems, including
civil structures, will be re-oriented and standardized for Indian conditions
and needs.
Parvatmala: National Ropeways Development Programme
26. As a preferred ecologically sustainable alternative to conventional
roads in difficult hilly areas, National Ropeways Development Programme
will be taken up on PPP mode. The aim is to improve connectivity and
convenience for commuters, besides promoting tourism. This may also
cover congested urban areas, where conventional mass transit system is not
feasible. Contracts for 8 ropeway projects for a length of 60 km will be
awarded in 2022-23.
Capacity Building for Infrastructure Projects
27. With technical support from the Capacity Building Commission,
central ministries, state governments, and their infra-agencies will have
their skills upgraded. This will ramp up capacity in planning, design,
financing (including innovative ways), and implementation management of
the PM GatiShakti infrastructure projects.
Inclusive Development
Agriculture
28. The procurement of wheat in Rabi 2021-22 and the estimated
procurement of paddy in Kharif 2021-22 will cover 1208 lakh metric tonnes
of wheat and paddy from 163 lakh farmers, and ` 2.37 lakh crore direct
payment of MSP value to their accounts.
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29. Chemical-free Natural Farming will be promoted throughout the
country, with a focus on farmers’ lands in 5-km wide corridors along river
Ganga, at the first stage.
30. 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.
31. To reduce our dependence on import of oilseeds, a rationalised and
comprehensive scheme to increase domestic production of oilseeds will be
implemented.
32. For delivery of digital and hi-tech services to farmers with
involvement of public sector research and extension institutions along with
private agri-tech players and stakeholders of agri-value chain, a scheme in
PPP mode will be launched.
33. Use of ‘Kisan Drones’ will be promoted for crop assessment,
digitization of land records, spraying of insecticides, and nutrients.
34. States will be encouraged to revise syllabi of agricultural universities
to meet the needs of natural, zero-budget and organic farming, modern-day
agriculture, value addition and management.
35. A fund with blended capital, raised under the co-investment model,
will be facilitated through NABARD. This is to finance startups for
agriculture & rural enterprise, relevant for farm produce value chain. The
activities for these startups will include, inter alia, support for FPOs,
machinery for farmers on rental basis at farm level, and technology
including IT-based support.
Ken Betwa project and Other River Linking Projects
36. Implementation of the Ken-Betwa Link Project, at an estimated cost
of ` 44,605 crore will be taken up. This is aimed at providing irrigation
benefits to 9.08 lakh hectare of farmers’ lands, drinking water supply for 62
lakh people, 103 MW of Hydro, and 27 MW of solar power. Allocations of `
4,300 crore in RE 2021-22 and ` 1,400 crore in 2022-23 have been made for
this project.
37. Draft DPRs of five river links, namely Damanganga-Pinjal, Par-Tapi-
Narmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been
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finalized. Once a consensus is reached among the beneficiary states, the
Centre will provide support for implementation.
Food Processing
38. For farmers to adopt suitable varieties of fruits and vegetables, and
to use appropriate production and harvesting techniques, our government
will provide a comprehensive package with participation of state
governments.
MSME
39. Udyam, e-Shram, NCS and ASEEM portals will be interlinked. Their
scope will be widened. They will now perform as portals with live, organic
databases, providing G2C, B2C and B2B services. These services will relate
to credit facilitation, skilling, and recruitment with an aim to further
formalise the economy and enhance entrepreneurial opportunities for all.
40. Emergency Credit Line Guarantee Scheme (ECLGS) has provided
much-needed additional credit to more than 130 lakh MSMEs. This has
helped them mitigate the adverse impact of the pandemic. The hospitality
and related services, especially those by micro and small enterprises, are
yet to regain their pre-pandemic level of business. Considering these
aspects, the ECLGS will be extended up to March 2023 and its guarantee
cover will be expanded by ` 50,000 crore to total cover of ` 5 lakh crore,
with the additional amount being earmarked exclusively for the hospitality
and related enterprises.
41. Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE)
scheme will be revamped with required infusion of funds. This will facilitate
additional credit of ` 2 lakh crore for Micro and Small Enterprises and
expand employment opportunities.
42. Raising and Accelerating MSME Performance (RAMP) programme
with outlay of ` 6,000 crore over 5 years will be rolled out. This will help the
MSME sector become more resilient, competitive and efficient.
Skill Development
43. Skilling programmes and partnership with the industry will be
reoriented to promote continuous skilling avenues, sustainability, and
employability. The National Skill Qualification Framework (NSQF) will be
aligned with dynamic industry nee8
44. Digital Ecosystem for Skilling and Livelihood – the DESH-Stack e-
portal – will be launched. This aims to empower citizens to skill, reskill or
upskill through on-line training. It will also provide API-based trusted skill
credentials, payment and discovery layers to find relevant jobs and
entrepreneurial opportunities.
45. Startups will be promoted to facilitate ‘Drone Shakti’ through varied
applications and for Drone-As-A-Service (DrAAS). In select ITIs, in all states,
the required courses for skilling, will be started.
Universalization of Quality Education
46. Due to the pandemic-induced closure of schools, our children,
particularly in the rural areas, and those from Scheduled Castes and
Scheduled Tribes, and other weaker sections, have lost almost 2 years of
formal education. Mostly, these are children in government schools. We
recognise the need to impart supplementary teaching and to build a
resilient mechanism for education delivery. For this purpose, ‘one class-one
TV channel’ programme of PM eVIDYA will be expanded from 12 to 200 TV
channels. This will enable all states to provide supplementary education in
regional languages for classes 1-12.
47. In vocational courses, to promote crucial critical thinking skills, to
give space for creativity, 750 virtual labs in science and mathematics, and 75
skilling e-labs for simulated learning environment, will be set-up in 2022-23.
48. High-quality e-content in all spoken languages will be developed for
delivery via internet, mobile phones, TV and radio through Digital Teachers.
49. A competitive mechanism for development of quality e-content by
the teachers will be set-up to empower and equip them with digital tools of
teaching and facilitate better learning outcomes.
Digital University
50. A Digital University will be established to provide access to students
across the country for world-class quality universal education with
personalised learning experience at their doorsteps. This will be made
available in different Indian languages and ICT formats. The University will
be built on a networked hub-spoke model, with the hub building cutting
edge ICT expertise. The best public universities and institutions in the
country will collaborate as a network of hub-spokes.
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Ayushman Bharat Digital Mission
51. An open platform, for the National Digital Health Ecosystem will be
rolled out. It will consist of digital registries of health providers and health
facilities, unique health identity, consent framework, and universal access
to health facilities.
National Tele Mental Health Programme
52. The pandemic has accentuated mental health problems in people of
all ages. To better the access to quality mental health counselling and care
services, a ‘National Tele Mental Health Programme’ will be launched. This
will include a network of 23 tele-mental health centres of excellence, with
NIMHANS being the nodal centre and International Institute of Information
Technology-Bangalore (IIITB) providing technology support.
Mission Shakti, Mission Vatsalya, Saksham Anganwadi & Poshan 2.0
53. Recognizing the importance of Nari Shakti as the harbinger of our
bright future and for women-led development during the Amrit Kaal, our
government has comprehensively revamped the schemes of the Ministry of
Women & Child Development. Accordingly, three schemes, namely,
Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were
launched recently to provide integrated benefits to women and
children. Saksham Anganwadis are a new generation anganwadis that have
better infrastructure and audio-visual aids, powered by clean energy and
providing improved environment for early child development. Two lakh
anganwadis will be upgraded under the Scheme.
Har Ghar, Nal Se Jal
54. Current coverage of Har Ghar, Nal Se Jal is 8.7 crores. Of this 5.5
crore households were provided tap water in last 2 years itself. Allocation of
` 60,000 crore has been made with an aim to cover 3.8 crore households in
2022-23.
Housing for All
55. In 2022-23 80 lakh houses will be completed for the identified
eligible beneficiaries of PM Awas Yojana, both rural and urban. ` 48,000
crore is allocated for this purpose.
56. The Central Government will work with the state governments for
reduction of time required for all land and construction related approvals,
for promoting affordable housing for middle class and Economically Weaker
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Sections in urban areas. We shall also work with the financial sector
regulators to expand access to capital along with reduction in cost of
intermediation.
Prime Minister’s Development Initiative for North East Region (PM-
DevINE)
57. A new scheme, Prime Minister’s Development Initiative for North-
East, PM-DevINE, will be implemented through the North-Eastern Council. It
will fund infrastructure, in the spirit of PM GatiShakti, and social
development projects based on felt needs of the North-East. This will
enable livelihood activities for youth and women, filling the gaps in various
sectors. It will not be a substitute for existing central or state schemes.
While the central ministries may also pose their candidate projects, priority
will be given to those posed by the states. An initial allocation of ` 1,500
crore will be made, and the initial list of projects is given in Annexure-1.
Aspirational Blocks Programme
58. Our vision to improve the quality of life of citizens in the most
backward districts of the country through Aspirational Districts Programme
has been translated into reality in a short span of time. 95 per cent of those
112 districts have made significant progress in key sectors such as health,
nutrition, financial inclusion and basic infrastructure. They have surpassed
the state average values. However, in those districts, some blocks continue
to lag. In 2022-23, the programme will focus on such blocks in those
districts.
Vibrant Villages Programme
59. Border villages with sparse population, limited connectivity and
infrastructure often get left out from the development gains. Such villages
on the northern border will be covered under the new Vibrant Villages
Programme. The activities will include construction of village infrastructure,
housing, tourist centres, road connectivity, provisioning of decentralized
renewable energy, direct to home access for Doordarshan and educational
channels, and support for livelihood generation. Additional funding for
these activities will be provided. Existing schemes will be converged. We will
define their outcomes and monitor them on a constant basis.
Anytime – Anywhere Post Office Savings
60. In 2022, 100 per cent of 1.5 lakh post offices will come on the core
banking system enabling financial inclusion and access to accounts through
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net banking, mobile banking, ATMs, and also provide online transfer of
funds between post office accounts and bank accounts. This will be helpful,
especially for farmers and senior citizens in rural areas, enabling inter-
operability and financial inclusion.
Digital Banking
61. In recent years, digital banking, digital payments and fintech
innovations have grown at a rapid pace in the country. Government is
continuously encouraging these sectors to ensure that the benefits of digital
banking reach every nook and corner of the country in a consumer-friendly
manner. Taking forward this agenda, and to mark 75 years of our
independence, it is proposed to set up 75 Digital Banking Units (DBUs) in 75
districts of the country by Scheduled Commercial Banks.
Digital Payments
62. The financial support for digital payment ecosystem announced in
the previous Budget will continue in 2022-23. This will encourage further
adoption of digital payments. There will also be a focus to promote use of
payment platforms that are economical and user friendly.
Productivity Enhancement & Investment, Sunrise Opportunities, Energy
Transition, and Climate Action
Productivity Enhancement & Investment
Ease of Doing Business 2.0 & Ease of Living
63. In recent years, over 25,000 compliances were reduced and 1486
Union laws were repealed. This is the result of our government’s strong
commitment for ‘minimum government & maximum governance’, our trust
in the public, and ease of doing business (EODB).
64. For the Amrit Kaal, the next phase of Ease of Doing Business EODB
2.0 and Ease of Living, will be launched. In our endeavour to improve
productive efficiency of capital and human resources, we will follow the
idea of ‘trust-based governance’.
65. This new phase will be guided by an active involvement of the
states, digitisation of manual processes and interventions, integration of the
central and state-level systems through IT bridges, a single point access for
all citizen-centric services, and a standardization and removal of
overlapping compliances. Crowdsourcing of suggestions and ground level
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assessment of the impact with active involvement of citizens and businesses
will be encouraged.
Green Clearances
66. A single window portal, PARIVESH, for all green clearances was
launched in 2018. It has been instrumental in reducing the time required for
approvals significantly. The scope of this portal will now be expanded, to
provide information to the applicants. Based on location of units,
information about specific approvals will be provided. 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
67. The 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
68. By the time of India @ 100, nearly half our population is likely to be
living in urban areas. To prepare for this, orderly urban development is of
critical importance. This will help realize the country’s economic potential,
including livelihood opportunities for the demographic dividend. For this, on
the one hand we need to nurture the megacities and their hinterlands to
become current centres of economic growth. On the other hand, we need
to facilitate tier 2 and 3 cities to take on the mantle in the future. This
would require us to reimagine our cities into centres of sustainable living
with opportunities for all, including women and youth. For this to happen,
urban planning cannot continue with a business-as-usual approach. We plan
to steer a paradigm change.
69. 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
70. For urban capacity building, support will be provided to the states.
Modernization of building byelaws, Town Planning Schemes (TPS), and
Transit Oriented Development (TOD) will be implemented. This will
facilitate reforms for people to live and work closer to mass transit systems.
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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.
71. For developing India specific knowledge in urban planning and
design, and to deliver certified training in these areas, up to five existing
academic institutions in different regions will be designated as centres of
excellence. These centres will be provided endowment funds of ` 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
72. We will promote a shift to use of public transport in urban areas.
This will be complemented by clean tech and governance solutions, special
mobility zones with zero fossil-fuel policy, and EV vehicles.
Battery Swapping Policy
73. Considering the constraint of space in urban areas for setting up
charging stations at scale, a battery swapping policy will be brought out and
inter-operability standards will be formulated. The private sector will be
encouraged to develop sustainable and innovative business models for
‘Battery or Energy as a Service’. This will improve efficiency in the EV eco-
system.
Land Records Management
74. Efficient use of land resources is a strong imperative. States will be
encouraged to adopt Unique Land Parcel Identification Number to facilitate
IT-based management of records. The facility for transliteration of land
records across any of the Schedule VIII languages will also be rolled out.
75. The adoption or linkage with National Generic Document
Registration System (NGDRS) with the ‘One-Nation One-Registration
Software’ will be promoted as an option for uniform process for registration
and ‘anywhere registration’ of deeds & documents.
Insolvency and Bankruptcy Code
76. Necessary amendments in the Code will be carried out to enhance
the efficacy of the resolution process and facilitate cross border insolvency
resolution.
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Accelerated Corporate Exit
77. Several IT-based systems have been established for accelerated
registration of new companies. Now the 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
78. Government rules have recently been modernized for the needs the
Amrit Kaal. The new rules have benefitted from the inputs from various
stakeholders. The modernised rules allow use of transparent quality criteria
besides cost in evaluation of complex tenders. Provisions have been made
for payment of 75 per cent of running bills, mandatorily within 10 days and
for encouraging settlement of disputes through conciliation.
79. As a further step to enhance transparency and to reduce delays in
payments, a completely paperless, end-to-end online e-Bill System will be
launched for use by all central ministries for their procurements. The
system will enable the suppliers and contractors to submit online their
digitally signed bills and claims and track their status from anywhere.
80. 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. Business such as gold imports may also find
this useful. IRDAI has given the framework for issue of surety bonds by
insurance companies.
AVGC Promotion Task Force
81. The animation, visual effects, gaming, and comic (AVGC) sector
offers immense potential to employ youth. An AVGC promotion task force
with all stakeholders will be set-up to recommend ways to realize this and
build domestic capacity for serving our markets and the global demand.
Telecom Sector
82. Telecommunication in general, and 5G technology in particular, can
enable growth and offer job opportunities. Required spectrum auctions will
be conducted in 2022 to facilitate rollout of 5G mobile services within 2022-
23 by private telecom providers.
83. A scheme for design-led manufacturing will be launched to build a
strong ecosystem for 5G as part of the Production Linked Incentive Scheme.
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84. To enable affordable broadband and mobile service proliferation in
rural and remote areas, five per cent of annual collections under the
Universal Service Obligation Fund will be allocated. This will promote R&D
and commercialization of technologies and solutions.
85. Our vision is that all villages and their residents should have the
same access to e-services, communication facilities, and digital resources as
urban areas and their residents. The contracts for laying optical fibre in all
villages, including remote areas, will be awarded under the Bharatnet
project through PPP in 2022-23. Completion is expected in 2025. Measures
will be taken to enable better and more efficient use of the optical fibre.
Export Promotion
86. 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’. This will cover all large existing and new
industrial enclaves to optimally utilise available infrastructure and enhance
competitiveness of exports.
AtmaNirbharta in Defence
87. Our Government is committed to reducing imports and promoting
AtmaNirbharta in equipment for the Armed Forces. 68 per cent of the
capital procurement budget will be earmarked for domestic industry in
2022-23, up from 58 per cent in 2021-22.
88. Defence R&D will be opened up for industry, startups and academia
with 25 per cent of defence R&D budget earmarked. Private industry will
be encouraged to take up design and development of military platforms and
equipment in collaboration with DRDO and other organizations through SPV
model. An independent nodal umbrella body will be set up for meeting
wide ranging testing and certification requirements.
Sunrise Opportunities
89. Artificial Intelligence, Geospatial Systems and Drones,
Semiconductor and its eco-system, Space Economy, Genomics and
Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense
potential to assist sustainable development at scale and modernize the
country. They provide employment opport
unities for youth, and make
Indian industry more efficient and competitive.
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90. Supportive policies, light-touch regulations, facilitative actions to
build domestic capacities, and promotion of research & development will
guide the government’s approach. 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
91. The risks of climate change are the strongest negative externalities
that affect India and other countries. As Hon’ble Prime Minister said at the
COP26 summit in Glasgow last November, “what is needed today is mindful
and deliberate utilisation, instead of mindless and destructive
consumption.” The low carbon development strategy as enunciated in the
‘panchamrit’ that he announced is an important reflection of our
government’s strong commitment towards sustainable development.
92. This strategy opens up huge employment opportunities and will take
the country on a sustainable development path. This budget proposes
several near-term and long-term actions accordingly.
Solar Power
93. To facilitate domestic manufacturing for the ambitious goal of 280
GW of installed solar capacity by 2030, an additional allocation of ` 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
94. The Circular Economy transition is expected to help in productivity
enhancement as well as creating large opportunities for new businesses and
jobs. The action plans for ten sectors such as electronic waste, end-of-life
vehicles, used oil waste, and toxic & hazardous industrial waste are ready.
The focus now 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
95. Five to seven per cent biomass pellets will be co-fired in thermal
power plants resulting in CO2 savings of 38 MMT annually. This will also
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provide extra income to farmers and job opportunities to locals and help
avoid stubble burning in agriculture fields.
96. Saving energy is an important aspect of energy management. Hence,
energy efficiency and savings measures will be promoted. This will be done
in large commercial buildings through the Energy Service Company (ESCO)
business model. It will facilitate capacity building and awareness for energy
audits, performance contracts, and common measurement & verification
protocol.
97. Four 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.
98. The 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.
Financing of Investments
Public Capital Investment
99. Capital investment holds the key to speedy and sustained economic
revival and consolidation through its multiplier effect. Capital investment
also helps in creating employment opportunities, inducing enhanced
demand for manufactured inputs from large industries and MSMEs, services
from professionals, and help farmers through better agri-infrastructure. The
economy has shown strong resilience to come out of the effects of the
pandemic with high growth. However, we need to sustain that level to
make up for the setback of 2020-21.
100. As outlined in para 5 earlier, the virtuous cycle of investment
requires public investment to crowd-in private investment. At this stage,
private investments seem to require that support to rise to their potential
and to the needs of the economy. Public investment must continue to take
the lead and pump-prime the private investment and demand in 2022-23.
101. Considering the above imperative, the outlay for capital expenditure
in the Union Budget is once again being stepped up sharply by 35.4 per cent
from ` 5.54 lakh crore in the current year to ` 7.50 lakh crore in 2022-23.
This has increased to more than 2.2 times the expenditure of 2019-20. This
outlay in 2022-23 will be 2.9 per cent of GDP.
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Effective Capital Expenditure
102. With this investment taken together with the provision made for
creation of capital assets through Grants-in-Aid to States, the ‘Effective
Capital Expenditure’ of the Central Government is estimated at ` 10.68 lakh
crore in 2022-23, which will be about 4.1 per cent of GDP.
Green Bonds
103. 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
104. 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 free from domestic regulations,
except those by IFSCA to facilitate availability of high-end human resources
for financial services and technology.
105. An International Arbitration Centre will be set up in the GIFT City for
timely settlement of disputes under international jurisprudence.
106. Services for global capital for sustainable & climate finance in the
country will be facilitated in the GIFT City.
Infrastructure Status
107. Data Centres 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
108. Venture Capital and Private Equity invested more than ` 5.5 lakh
crore last year facilitating one of the largest start-up and growth ecosystem.
Scaling up this investment requires a holistic examination of regulatory and
other frictions. An expert committee will be set up to examine and suggest
appropriate measures.
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Blended Finance
109. Government backed Funds NIIF and SIDBI Fund of Funds have
provided scale capital creating a multiplier effect. For encouraging
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 share being limited to 20
per cent and the funds being managed by private fund managers.
Financial Viability of Infrastructure Projects
110. For financing the infrastructure needs, the stepping-up of public
investment will need to 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. Enhancing financial viability shall also be obtained by adopting
global best practices, innovative ways of financing, and balanced risk
allocation.
Digital Rupee
111. Introduction of Central Bank Digital Currency (CBDC) will give a big
boost to digital economy. Digital currency will also lead to a more efficient
and cheaper currency management system. It is, therefore, proposed to
introduce Digital Rupee, using blockchain and other technologies, to be
issued by the Reserve Bank of India starting 2022-23.
Financial Assistance to States for Capital Investment
112. Reflecting the true spirit of cooperative federalism, the Central
Government is committed to bolstering the hands of the states in
enhancing their capital investment towards creating productive assets and
generating remunerative employment. The ‘Scheme for Financial Assistance
to States for Capital Investment’ has been extremely well received by the
states. In deference to the requests received during my meeting with Chief
Ministers and state Finance Ministers, the outlay for this scheme is being
enhanced from ` 10,000 crore in the Budget Estimates to ` 15,000 crore in
the Revised Estimates for the current year.
113. For 2022-23, the allocation is ` 1 lakh crore to assist the states in
catalysing overall investments in the economy. These fifty-year interest
free loans are over and above the normal borrowings allowed to the states.
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114. This allocation will be used for PM GatiShakti related and other
productive capital investment of the states. It will also include components
for:
Supplemental funding for priority segments of PM Gram Sadak
Yojana, including support for the states’ share,
Digitisation of the economy, including digital payments and
completion of OFC network, and
Reforms related to building byelaws, town planning schemes,
transit-oriented development, and transferable development
rights.
115. In 2022-23, in accordance with the recommendations of the 15th
Finance Commission, the states will be allowed a fiscal deficit of 4 per cent
of GSDP of which 0.5 per cent will be tied to power sector reforms, for
which the conditions have already been communicated in 2021-22.
Fiscal Management
116. As against a total expenditure of ` 34.83 lakh crore projected in the
Budget Estimates 2021-22, the Revised Estimate is ` 37.70 lakh crore. The
Revised Estimate of capital expenditure is ` 6.03 lakh crore. This includes an
amount of ` 51,971 crore towards settlement of outstanding guaranteed
liabilities of Air India and its other sundry commitments.
117. Coming to the Budget Estimates, the total expenditure in 2022-23 is
estimated at ` 39.45 lakh crore, while the total receipts other than
borrowings are estimated at ` 22.84 lakh crore.
118. The revised Fiscal Deficit in the current year is estimated at 6.9 per
cent of GDP as against 6.8 per cent projected in the Budget Estimates. The
Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is
consistent with the broad path of fiscal consolidation announced by me last
year to reach a fiscal deficit level below 4.5 per cent by 2025-26. While
setting the fiscal deficit level in 2022-23, I am conscious of the need to
nurture growth, through public investment, to become stronger and
sustainable.
I will, now, move to Part B of my speech.
