Union Budget 2022 Sectoral Impact: A concrete map for Digital India

Digital India is set to receive a boost

In what seems to be the most prolific budget that hopes to beat the blues of the pandemic, India Inc lauded the digital vision of the current government. Budget 2022 or the term Digital India budget has been coined, as the Finance Minister Nirmala Sitharaman used ‘digital’ atleast 35 times in her budget speech. Amongst the others, artificial intelligence, space imaging, drone technology, and clean mobility were some of the buzzwords in this year’s budget.

She also acknowledged the vital role played by Indian startup firms in the digital revolution of the country by adding conducive policies to aid them.

During the pandemic, the entire country benefited from digital resources provided by private sector players, and the government hopes to join them. As digital payments escalated, the current budget has envisaged a digital currency while keeping a tab on the ever-burgeoning cryptocurrency market.

[box type=”success” align=”” class=”” width=””]Pegged at 9.2% growth rate, the budget hopes to encourage corporate India to take advantage of the digital reforms laid out. The budget also gives more hope to schools impeded by pandemic-induced disruption, as schools are still hesitant to resume in full swing. Equipping the education sector with digital avenues has been the need of hour since the pandemic. [/box]

Overall, the budget seemed to have covered the major aspects of a massive digital overhaul but does give room for some quarters to agree of the lack of changes in the income tax slabs.

We take a quick review of key points in the technology evolution:

Major announcements

  • Enabling AtmaNirbhar Bharat by cutting custom duties and placing India among more competitively in global value chains.
  • Reducing the urban-rural gap by setting up 75 digital banking units across 75 districts in the country to support massive demand in digital payments
  • Digital currency by RBI will be launched in the future. By using blockchain technologies for the continuation of financial support to urban and rural cities. Such digital inclusiveness and support will help drive digital proliferation across the country.
  • DESH-Stack e-portal for upskilling, reskilling, cross-skilling will help place India as a global hub for talent with a special focus on deep tech areas
  • Drone Shakti project gives emphasis to AI or artificial intelligence and deep technology
  • E-passports with electronic chips, national portal for risk-based checks for SEZs to facilitate ease of doing business, interlinking MSME portals including Udyam, e-Shram, NCS and ASEEM to enable G2C, B2C and B2B services are some of the new initiatives.
  • National Digital health platform with digital registries will also be a game changer.
  • Battery swapping sand charging technology will boost EV proliferation within the country.
  • Digital university will be introduced for schools which will develop e-content and expand television channels to 200.
  • 5G Spectrum rollout targeted this year

What does this mean for the sector:

  • Bridging the rural-urban divide with improved supply chain capabilities.
  • Education sector will finally gain from the reforms, as school dropouts increased across the country due to the pandemic.
  • Startups can avail tax benefits by extending the window by a year
  • Capping the tax surcharge at 15% applicable to unlisted equities.
  • A taxation of 30% of income from crypto assets by 30%, will help regulate the flow of income and investments from such financial instruments.
  • Private sector players will benefit from the roll-out of 5G mobile services. This will foster greater competition beginning in the metro cities such as Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Hyderabad, and Ahmedabad will gain from this.
  • Replacing Special Economic Zones with a new proposal.
  • Increase digital literacy, encourage deep tech areas and will help reduce the digital divide in the country across sectors.

 

References: KPMG: https://assets.kpmg/content/dam/kpmg/in/pdf/2022/02/Technology-budget-2022-23.pdf

[author title=”” image=”http://”]-ET Edge Insights[/author]

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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