Budget 2022 affect on product What gets cheaper, what’s costlier

On Tuesday, Feb 1, 2022, Honourable Finance Minister Nirmala Sitharaman announced various proposals in the Fiscal Budget 2022-23. India is the third-largest emerging economy from the Asian pack of countries. Keeping that in mind, the FM conveyed that the budget has been drafted to prepare the nation by laying a solid foundation for economic growth.

The Union Government has figured out one way of doing that by inviting public investment in government undertakings by divesting the stake but the primary focus remained infrastructure development.

What are the factors affecting prices?

While infrastructure was under the limelight of the Budget 2022, there are other elements to the Finance Minister’s speech and in the detailed documents of the Budget that affect the prices of various goods and services, which in turn impact your spending.

The Finance Minister proposed to hike the rate of customs duty on import of parts. This, in turn, directly impacts the prices of some products. As the importers will pay more for the parts purchased from outside India, the ultimate burden of increased duty falls on the consumer.

Custom duty on polished and cut diamonds and gemstones has been reduced to 5%. The duty exemption on over 350 categories has also been phased out.

To promote agriculture, the exemption of customs duty on import of certain tools and equipment have been extended. The supplies used for agricultural purposes were already under the exemption as far as customs duty on their import was concerned. These items will remain cheaper.

Budget 2022 Highlights – What got cheaper and What got costlier?

So we have boiled down the amendments in the form of a list of items and segregated them into products that demand more cash out of your pockets on one hand and the goods that will demand less on the other.

Here’s the full list of costlier items

Here’s the full list of cheaper items

FAQs

What changes have been brought in Customs Law in the Budget 2022?

In Budget 2022, Finance Minister Nirmala Sitharaman has brought changes in customs law by rejigging the structure. The Finance Ministry plans to phase out concessional rates for capital goods and project imports. To bring about this change, the Union Government has begun the process by imposing a 7.5% tariff on them.

What changes have been made to boost the gems industry in the Budget 2022 announcement?

To boost the gems and jewelry industry, the Finance Budget 2022-23 has proposed to lower the customs duty on polished diamonds and gems to 5%. Simply sawn diamond will not attract any customs duty. Imitation jewelry, on the other hand, will have to carry a duty of at least 400 per kg.

What was the rationale behind customs law rejig in the Budget?

In her Budget speech on Feb 1, 2022, FM Nirmala Sitharaman said that the local manufacturers from transmission projects, power generation and distribution projects, metro and rail projects, and coal mining projects lacked a level playing field. Along with that, the Ministry believes that the changes brought by the Finance Budget will provide a suitable environment for the promotion of local industries.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.