Abhimanini Singh Sawhney-
India’s Finance Minister Nirmala Sitharaman Feb 1 attempted to set a roadmap for what she described as ‘Amrit Kaal’, the 25-year transition from India@75 to India@100, while presenting the Union budget for 2022-23.
The minister projected the budget as a document that would pave the way for policy over the next quarter-century and laid out certain key objectives. These include matching the level of focus on growth at the macroeconomic level with a focus on all-inclusive welfarism at the microeconomic level; a progression of the prime minister’s focus on digitization by promoting the digital economy, FinTech, technology-driven development and climate action; and a new reliance on and acceptance of private investment alongside public efforts.
The ‘new and innovative ways of financing public projects by allowing private capital to supplement public resources indicate greater room for action for private players. This is not only evident in new opportunities in state-sponsored projects, but also in the proposed scaling up of venture capital and private equity players and the opening up of new avenues in defense research and development, artificial intelligence, geospatial systems, and clean mobility. All of these point to a large degree of blended finances and higher levels of cooperation between the public and private sectors.
To facilitate these changes, the finance minister proposed to simplify the system and make it easier for players to operate under ‘Ease of Doing Business 2.0’ – a slew of new measures designed to revive the business and economic environments.
Examples include the integration of three different digital platforms used by MSMEs (medium- and small-scale enterprises) and other businesspersons into one common database and destination for information and the creation of a single point of access for all citizen services.
Also important is the emphasis on improving the multimodal movement of people and goods for increased efficiency by improving logistics. Four contracts for public-private partnership-supported multimodal logistics parks are expected to be issued in the next financial year.
On the entrepreneurial side, the minister proposed an extension of the tax incentives for start-ups to promote more such business ventures. This comes immediately after the recognition of start-ups as ‘engines of growth’, and her speech contained several announcements regarding sectors where the government is willing to support private players to build capacity.
Meanwhile, the changes in tax and customs duty indicate a continuing shift toward promoting the ‘Make in India’ movement. A gradual phasing-out of import duty concessions and an application of 7.5 percent tariff and removal of 350 entries from the customs exemption list testify to this. The reduction in export duty on products made in India will further reduce the burden on Indian manufacturers.
Other measures of importance include:
- The creation of e-passports from 2022-23, with chips and futuristic technology, to ease the burden on Indians traveling abroad;
- The launch of a new National Tele Mental Health Program in the wake of the stress caused by COVID-19;
- Taxation of virtual digital assets that are moved using online platforms;
- The introduction of a digital rupee by the Reserve Bank of India, the country’s central bank, for those trading in the digital space;
- The issuance of ‘green bonds’ to fund green infrastructure projects and facilitate further investment in the green economy;
- The launch of 75 digital banking units in various parts of the country to bring digital banking into scheduled banks and make them more easily accessible globally;
- The crowdsourcing of suggestions on digital payments infrastructure and FinTech (though the means for accomplishing this were not mentioned).
