Green, digital blueprint for the 100-year mark
3 min read . Updated: 02 Feb 2022, 12:28 AM IST
PremiumThe budget has taken some key measures to take digital payments forward
The Union Budget 2022-23 is a clear directional statement setting the tone for India@100; it talks about building a digital and green India along with development of infrastructure and rural areas in a blueprint for India’s Amrit Kal of the next 25 years.
The growth target of 8-8.5% for the coming year seems ambitious, but achievable, given the state of the economy. Although the fiscal deficit target was missed at 6.9%, the government has come close to the estimated FD of 6.8% for the year. Next year’s FD target of 6.4%, though ambitious, shows the government’s resilience to recover from the situation and push for growth. This will be led by the Prime Minister’s Gati Shakti masterplan—a transformative approach for economic growth and sustainable development driven by the seven engines: roads, railways, airports, ports, mass transport, waterways and logistics infrastructure. The plan, which will focus on economic transformation, seamless multimodal connectivity and logistics efficiency, is designed to propel India ahead in the next two decades.
There are several positive aspects in the budget which will help realize the growth vision for India@100. This is led by an expansion of capital expenditure by 34.5%; the government will invest ₹7.5 trillion as capital expenditure next year, a sharp jump from ₹5.54 trillion in FY22. This will help in building infrastructure and provide the much-needed capital inflow for development areas and infrastructure projects.
Growth in digital payments is a big achievement in the pandemic years. The budget recognizes the importance of digital payments and has taken measures to take it forward. This year’s focus on establishing 75 digital payment banks across 75 districts over the next three years, along with the inclusion of post offices in the core banking system, will help the retail sector in a big way as it will strengthen the payments infrastructure, particularly in rural areas.
The proposal for a master plan for expressways and expanding highways by 25,000 km in the coming year will increase connectivity, especially with rural areas and increase mobility which will in turn help retail trade. The government has announced a production-linked incentive (PLI) scheme in 14 sectors, which is expected to create six million jobs. Additionally, the proposal to introduce 400 new trains under the Vande Bharat Mission over the next three years will increase connectivity with rural areas.
One of the most welcome aspects of the budget was the strong focus on the MSME sector, which has been the worst hit by the pandemic. The increase in the emergency credit line guarantee scheme by ₹50,000 crore and its extension by a year will help MSMEs in a big way, and take care of the requisite working capital requirements in the form of term loans. Besides, the Raising and Accelerating MSME Performance (RAMP) programme of ₹6,000 crore for five years will revitalize the MSME and hospitality sectors and improve competitiveness and productivity of MSMEs.
The proposal to introduce a Digital Ecosystem for Skilling and Livelihood – the DESH-Stack e-portal will bring in the much-needed online training and skilling of MSMEs, as well as help find relevant employment and entrepreneurial opportunities. This will help in upskilling and training kirana and small retail players, especially in Tier II-III and rural areas. Furthermore, in this age of startups, this segment needs a lot of impetus. The tax concession period extended by a year for startups along with the reduction in surcharge for startups from 28.5% to 23% will provide the requisite stimulus to the startup ecosystem and encourage entrepreneurship. The reduction of 25,000 compliances and repeal of 1,486 union laws in recent years reiterates the government’s maximum governance and trust. Along with this, expanding the scope of the single-window portal, PARIVESH, for all green clearances will also enhances the ease of doing business significantly.
Overall, the all-inclusive Budget will provide the right stimulus to generate employment opportunities and provide the requisite momentum to help the economy’s revival from the clutches of the pandemic.
Arvind Mediratta is MD & CEO, Metro Cash & Carry India
Views are personal.
