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Future Forward Budget Fostering Digital Economy
The Union Budget 2022 looks to build a digitally adept and buoyant economy through well-concerted efforts from all sections of the society - ‘Sabka Prayas’. This budget is pivoted on India’s vision, 100 years after independence
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The Finance Minister specifically stated that the government is focused on supplementing macroeconomic growth trajectories of the country with a micro and comprehensive welfare strategy. This would play an instrumental role in catapulting the digital economy, where the fintech sector would get its place in the sun. The budget also emphasised the significance and need for tech-enabled holistic development, energy transition and climate action.
Financial Inclusion is Key
The Finance Minister announced its plans to bring in 100 per cent of all 1.5 lakh post offices under the core banking system. The initiative is undertaken to provide the much-needed fillip to financial inclusivity, through a cashless economy. The government opined that enabling seamless access to bank accounts through internet banking, mobile banking, ATMs, and facilitating the online transfer of funds between post office accounts and bank accounts can play a decisive role in fostering financial inclusion, greatly benefiting the senior citizens and farmers residing in rural regions of the country.
Digital Economy, a Great Leveller
Recognising the contribution of fintech companies towards making digital payments a success story in the country. The Government provided a fiscal stimulus of Rs 1500 crore in the digital payments space, between 2022 and 2023. The government also reiterated that people in rural regions should have affordable access to all digital tools that are available to people in urban areas. The launch of the digital rupee through secure blockchain technology would be a ground-breaking step in catalysing digital infrastructure in the country.
Mobile Connectivity, the Limelight
There is no doubt that internet and mobile connectivity is absolutely indispensable for a vibrant digital economy and digital payments ecosystem to flourish in the country. Towards this objective, the government already fast-tracked spectrum auction for the rollout of 5G mobile services by private telecom operators in 2022. Design-led manufacturing towards 5G would be encompassed as part of the Production Linked Incentive scheme towards aiding affordable broadband and mobile communication in rural and remote regions with 5 per cent of annual collection under USOs fund to be apportioned as financial assistance.
Credit Facilities for Entrepreneurship
We all know that the availability of adequate and ready capital can greatly benefit businesses, especially startups. In this budget, the government has reiterated its focus on making credit available to entrepreneurs and small business setups. Strengthening the Credit Guarantee Trust for Micro and Small Enterprises scheme by pushing in additional funds would grow the credit line up to Rs 2 lakh crore. This would also have a positive ripple effect on employment opportunities. The Emergency Credit Line Guarantee Scheme has provided timely credit to more than 130 lakh MSMEs, helping them wade through the crisis caused by the pandemic.
Financial discipline is Imperative
The Government has committed to reducing the fiscal deficit of 6.4 per cent of GDP in FY2022-23 to 4.5 per cent by FY2025-26. With a growth estimate amounting to 9.2 per cent in 2022, the Indian economy is now poised to tide over challenges, including events as crippling as the pandemic.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
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