Three years into the pandemic, amidst the Omicron wave, the Indian Union Budget 2022 promises resiliency, growth momentum, and long-term sustainability measures. At a 9.2% GDP, India projected the highest growth rate among world economies. Great stat to start the budget highlights with right?
Digital Focus
The key focus areas of the budget were digital and technology for the next 25 years. The Finance Minister’s budget speech promoted digital and technological innovation across industries. It offered a sharp increase in public investment and capital expenditure provision that is expected to aid future growth and help businesses recover from the pandemic-induced slump.
Initiatives focused on ‘accelerated growth’ for technology-led development, energy transition, and climate action while balancing the needs of an inclusive welfare society.
Fintech Impetus
For the financial services industry, this budget promises greater investments, is fintech-friendly and pro-financial inclusion.
Honoring India’s 75th year of independence, the Finance Minister announced the establishment of 75 Digital Banking Units (DBUs) across 75 districts in India. This move is expected to extend financial inclusion and fintech services to remote areas.
Initiatives are also underway to make the cashless payments ecosystem safe and seamless for consumers and businesses by enlarging digital infrastructure, boosting internet access, expanding touchpoints, and enhancing cybersecurity. The Finance Minister also stated that financial support for the digital payment ecosystem announced in the 2021–22 budget would continue in 2022–23.
Other Highlights
Budgetary Allocation
- 6.4% fiscal deficit is projected for India in FY23
- Revised fiscal deficit estimated at 6.9% of GDP
- Rs 1 lakh crore as 50-year interest-free loans allocated to states to help fund PM Gati Shakti-related investments
- Rs 10.68 lakh crore effective capital expenditure is expected in 2022–23, which is about 4.1% of GDP
- 35.4% rise in outlay for capital expenditure is estimated — from Rs 4.54 lakh crore earlier to Rs 7.50 lakh crore in 2022–23
Venture Capital Investment
- Regulatory framework for Venture Capital to be reviewed by an expert committee
Digital Currency on Blockchain
- Reserve Bank of India (RBI) to introduce the digital rupee using blockchain in 2022–23
Digital Banking
- Launch of online bill system to reduce delays in payment for all central ministries
- Credit growth increased by Rs 5.4 lakh crore this year, the highest in several years
Crypto Tax
- Cryptocurrencies and NFT will be taxed at 30%
So, what do you think of the budget? Let us know in the comments below.
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