The Winners and the Losers of Union Budget 2022

The budget outlines policy goals that benefit a number of business segments as well as regions.

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The Union Budget for financial year 2022-23 comes at the tail end of the COVID-19 third wave driven by the Omicron variant, and more importantly, at a time when India’s consumption appetite is being wrecked by high inflation as well as rampant unemployment.

Given the larger macro-economic picture, finance minister Nirmala Sitharaman has presented a Union Budget that ratchets up India’s total spending kitty to Rs 39.5 lakh crore, stressing that the budget is looking to lay the foundation for an ‘Amrit Kaal’ of 25 years that is to follow. Whether the ‘Amrit Kaal’ does arrive or not, one major caveat to bear in mind while accepting budgetary figures at face value is that many are often dramatically revised in subsequent years indicating that funds promised in the budget often remain unallocated and consequently, schemes and policies remain unimplemented.

Meanwhile, the budget outlines policy goals that benefit a number of business segments as well as regions. These include: 

Gems and Jewellery

Customs duty on cut and polished diamonds and gemstones will be reduced to 5%. Simply sawn diamond would attract nil customs duty. To facilitate the export of jewellery through e-commerce, a simplified regulatory framework will be implemented by June this year. To disincentivise the import of undervalued imitation jewellery, the customs duty on imitation jewellery is being prescribed in a manner that a duty of at least Rs 400 per kg is paid on its import.

Tax incentives to IFSC

Income of a non-resident from offshore derivative instruments, or over the counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC shall be exempt from tax.


Eligible start-ups, established before March 31, 2022, had been provided with a tax incentive for three consecutive years out of ten years from incorporation. The tax incentive from the period of incorporation has been extended by one more year, that is, those established by March 31, 2023, will also be able to receive this incentive.

Reduced alternate minimum tax rate and surcharge for cooperatives

Currently, cooperative societies are required to pay an alternate minimum tax at the rate of 18.5%. However, companies pay the same tax at the rate of 15%. The budget has levelled the playing field between cooperative societies and companies by reducing this rate for the cooperative societies to 15%.

Also read: Snapshot in Eight Charts: Key Sector Allocation in Union Budget 2022

Hospitality and related services

Over 13 million medium- and small-sized enterprises (MSMEs) have received some aid from the Emergency Credit Line Guarantee Scheme (ECLGS). Micro and small enterprises in the hospitality and related services – given that they are yet to recover fully – will be extended the ECLGS up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to a total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality sector.

Cement and construction companies

The government has earmarked Rs 48,000 crore for the allocation to the PM Awas Yojana. The finance minister said that around 80 lakh houses will be completed in FY23.

The Northeastern states

An initial allocation of Rs 1,500 crore will be made to the Prime Minister’s Development Initiative for North East Region (PM-DevINE).  The scheme will be implemented through the North Eastern Council. The scheme aims to enable “livelihood activities for youth and women”.

At the same time, there are other sections whose interests have been actively hurt or alternatively no positive action has been chalked out in their favour.

Cryptocurrency investors

Cryptocurrency investors got the rough end of the stick as all their profits will be taxed at 30%. While this does rule out the possibility of a complete ban on digital assets, it will still sour investors’ appetite and erode their speculative earnings.

No action against inflation

The budget disappoints as it failed to address inflation. The word did not even figure in the finance minister’s speech and no roadmap or blueprint has been laid out as far as dealing with massive price rise of everyday products is concerned.

Income tax payers

No changes or concessions have been made in the existing income tax slabs.