ECONOMIC SURVEY AND BUDGET 2022 – AT A GLANCE

[Dr. Sanjiv Agarwal]

The Economic Survey for the fiscal 2021-22 was presented in Parliament on 31^st January, 2022, the first day of ongoing Budget session. The growth has been hit by pandemic. It focuses on need to have capital expenditure by Government and hopes for private spending as well. The fiscal space also allow for more capex. The Survey estimates that the GDP growth in 2020-21 is pegged at 6.6% (earlier projected @ 7.3%) whereas GDP is expected to grow @ 8-8.5% in 2022-23 (slightly less than earlier estimate of 9-9.2%. The growth in core sectors is @ 8.4%. Various agencies have been forecasting growth ranging from 7% to 9% including Reserve Bank and World Bank.

The Survey is quite optimistic that overall macro-economic stability indicators suggest that the Indian economy is well placed to take on the challenges of 2022-23 and one of the reasons that the Indian economy is in good position is its unique response strategy.

The Union Budget 2022-23 and the Finance Bill, 2022 has been laid before the Parliament today, 1^st February, 2022 by the Finance Minister. This year’s Budget is the second Budget amid Covid pandemic and the ongoing present Omicron wave. It revolves around the vision of  complementing the macro-economic level growth focus with a micro-economic level all-inclusive welfare focus, 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.

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.

In her speech, the FM complimented the tax payers but did not do much for them in the form of tax reliefs. She talked of trustworthy tax regime and to further simplify the tax system, promote voluntary compliance by tax payers and reduce litigation.

On indirect taxes front, it has been recognized that GST has been a landmark reform of Independent India showcasing the spirit of Cooperative Federalism. While aspirations were high, there were huge challenges too. These challenges were overcome deftly and painstakingly under the guidance and oversight of the GST Council.  We can now take pride in a fully IT driven and progressive GST regime that has fulfilled the cherished dream of India as one market- one tax. There are still some challenges remaining and we aspire to meet them in the coming year. The right balance between facilitation and enforcement has engendered significantly better compliance. GST revenues are buoyant despite the pandemic.   Taxpayers deserve applause for this growth. Not only did they adapt to the changes but enthusiastically contributed to the cause by paying taxes. 

Certain changes have been made in the GST Acts and the IGST Act on the basis of recommendations made by the GST Council. These changes will come into effect from the date to be notified. These changes broadly relates to facilitation/simplification and for improving compliance. These changes include rationalisation of return filing procedure, sequential filing of GSTR-1, cancellation of registration of return non-filers/ stop-filers, doing away with two-way communication process in return filing and consequent changes related thereto, certain conditional restrictions on utilisation of input tax credit, allowing transfer in electronic cash ledger of a distinct person, extending the relevant date for rectification of errors, availing input tax credits, issuance of credit or debit note pertaining to a financial year till 30th November of following financial year, etc. Also, section 50 of the CGST Act has been amended to prescribe, with effect from 1st July, 2017, levy of interest on wrongly availed ITC only if it is utilised. Certain other changes have been made in relation to SEZ and Customs including exemptions, tariff rates etc.

For the year 2022-23, GST’s contribution is expected to be 16% and Union Excise Duties at 7% in total revenue.

GST collection in the month of December 2021 have once again shown buoyancy. GST collections have crossed ₹ 1.30 lakh crore. This was updated by the Finance Minister to ₹ 140.984 lakh crore during the Budget speech.

The gross GST revenue collected in the month of January 2022 till 3PM on 31.01.2022 is ₹ 1,38,394 crore of which CGST is ₹ 24,674 crore, SGST is ₹ 32,016 crore, IGST is ₹ 72,030 crore (including Rs 35,181 crore collected on import of goods) and cess is ₹ 9,674 crore (including Rs 517 crore collected on import of goods). The highest monthly GST collection has been Rs 1,39,708 crore in the month of April 2021. Total number of GSTR-3B returns filed upto 30th January 2022 is 1.05 crore that includes 36 lakh quarterly returns.

This is for the fourth time GST collection has crossed Rs 1.30 lakh crore mark. 6.7 crore e-way bills were generated in the month of December 2021 which is 14% higher than 5.8 crore e-way bills generated in the month of November 2021. Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalization measures undertaken by the Council to correct inverted duty structure. It is expected that the positive trend in the revenues will continue in the coming months as well.