What were the key takeaways from the Union Budget 2022 in terms of macro data?

Here is what you need to know about the macros in the Union Budget 2022.

· As stated in the 07-Jan advance estimates, the GDP growth for FY22 was affirmed at 9.2%. For FY22, the fiscal deficit has been pegged 10 bps higher at 6.9% largely due to slack disinvestment revenues. However, FY23 has fiscal deficit has been dragged down to 6.4%. Even revenue deficit in FY23 is lower by 90 basis points.

· In a nutshell, the government has underplayed disinvestments in the Union Budget. For FY23, the disinvestment revenues have been pegged at just about Rs.65,000 crore, which would be dominated by BPCL. For FY22, divestment target has been cut from Rs.175,000 crore to Rs.78,000 crore, and it looks like LIC IPO size may be pruned.

· There is a shift in spending pattern from revenue spending to capital spending. There is a 35% increase in capital expenditure from Rs.5.5 trillion to Rs.7.5 trillion in FY23. However, this would be largely funded with cuts in the MGNREGA allocation, fertilizer subsidy and food subsidies. COVID related health allocations will also be cut.

· It is official that the RBI will be launching its own digital currency and that is expected to happen in FY23 itself. To distinguish the existing digital virtual currencies from the RBI currency, these existing crypto / virtual assets will be taxed on their gains at 30%. TDS will be charged at 1% of consideration to ensure audit trail and compliance.

· Finally, a look at the agriculture sector. Year 2022-23 will be declared the year of the Millet to ensure calibrated crop diversification. Budget 2022 has given a push to integrating the Indian agriculture sector with new age start-up ideas that are making a big difference to farming. A dedicated allocation is being made for use of Kisan drones for spraying pesticides and for mapping crops; apart from digitizing land records.