The Union Budget for 2022-23 is different from its previous avatars. This is possibly the first Budget in the country’s history to have delineated a vision for the country for the next 25 years. A futuristic Nirmala Sitharaman, the Finance Minister, claims in the 75th year of India’s independence that we have set foot in the Amrit Kaal and envisions a holistic picture for India @100. This year’s Budget focuses a lot on long-term growth and building a stable economy with a strong emphasis on domestic manufacturing, digitization, rural upliftment and planned urbanization.

The embedded policy framework gives importance to addressing both supply and demand-side constraints and adopting an agile policy response to the unprecedented challenges posed by the ongoing pandemic for sustainable development and job creation.

On the economic front, India is expected to play an increasingly important role as one of the major growth engines. According to the first advance estimate of GDP in 2021, India’s GDP is valued at USD 3.27 trillion. Tax receipts as a percentage of GDP, which was declining since 2017-18, has increased to 11.4% due to high revenue collection in the current year.

Budget proposals, including regulated digital currency and the issuance of sovereign green bonds, are welcome. It is progressive to harness blockchain technology for regulated digital currencies. However, the issue of sovereign green bonds could be a key enabler for entities in the public sector to increase their efforts to reduce oil imports and decarbonize their energy usage.

In addition, the allocation of INR 195 billion as part of the Product-Linked Incentives (PLI) scheme for the production of high-efficiency modules for solar power would contribute to the energy transition and climate action aspects of India’s commitment to becoming Net-Zero by 2070.

More than 28 per cent of India’s GDP comes from the MSME sector, comprising 6.3 million units and employing over 11 crore Indians. This Budget offers several sops to the MSME sector, focusing on factors such as raw material costs and access to credit, assisting in developing infrastructure and skills, and facilitating ease of doing business.

Continuing from last year’s vision, the Union Budget 2022-23 continues to build on it. As infrastructure is undoubtedly the engine of economic growth, this year’s announcements are extremely transformational. Infrastructure development creates jobs and synergizes people and goods movement for enhanced productivity and economic growth. Many of the initiatives announced are geared towards achieving this goal.

Public capital expenditures have been increased without hesitation by the government. From Rs 5.54 lakh crore in the previous Budget, an increase of 35.4%, to peg it at Rs 7.50 lakh crore, we will see a lot of momentum in employment generation, along with benefits to large-scale manufacturing, micro, small and medium enterprises (MSMEs), infrastructure and the services sector.

In light of the announcement of sovereign green bonds, the focus on green infrastructure deserves special attention. In addition to promoting sustainability, these bonds will fund environmental benefit projects. However, this requires a more profound financial market readiness and acceptance from institutions.

Of course, the big takeaway of the Budget is its thrust on digitalization. The government sees digital technologies as the gateway to economic resurgence, whether agriculture or education. The mention of Kisan drones for crop assessment, land records digitization and spraying of insecticides will significantly empower the farmers and pace up the adoption of Agriculture 4.0 practices. Moreover, the government has shown the right intent to make available hi-tech and digital services to the farmers by roping in support of public research institutions, AgriTech players and other stakeholders and to make this a reality; a framework will be done on the PPP mode. Then, the Ayushman Bharat Digital Mission talks of creating integrated digital registries. This initiative promises to enhance healthcare quality and help governments inch closer to the avowed Mission of ‘Universal and Affordable Healthcare for All’.

In the announcements made by the government, its intention to foster digital governance, transparency, and encouragement to the start-up community was evident. Start-ups in agri-tech, space-tech, and drone-tech should be encouraged to spur innovation in these spheres. The concept of e-Passports has been mentioned, which will apply embedded technology. Under PM e-Vidya, supplementary education will be available in regional languages in classes 1 to 12 under the concept of one class, one TV channel. Additionally, a digital university will be established for inculcating and honing digital skills.

Overall, this is a Budget that is balanced, farsighted and realistic. It articulates the true vision of a resurgent India.

Editorial By – Dibyajit Sahu, Group Editor, Interview Times

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