The long awaited Union Budget 2022 has been out and the people have spoken.
Finance Minister Nirmala Sitharaman´s Union Budget for 2022 has proposed many changes, keeping in mind the challenges being faced by farmers. The Budget has been praised to favour the agri sector focusing on infusing the area with technology such as drones and hi tech services. Digital progress also fares as well as special allocation for the Northeast.
ALLOCATION
- Ministry of rural development: INR 138203.63
- Ministry of agriculture and farmers’ welfare: INR 132513.62
- Ministry of chemicals and fertilisers: INR 107715.38
- Development initiatives in the Northeast INR 1,500 crores
HIGHLIGHTS
- Economic growth in FY22 to be pegged at 9.2%
- Introduction of a central bank digital currency (RBI Crypto)
- Creation of 60 lakh jobs
- Push for infrastructure development under PM Gati Shakti
- Startups in agriculture sector encouraged with commitment to provide support for FPOs, technology including IT based support
- Startups to be promoted to create Drone-shakti. Government to promote Drone-as-a-service
- E-passports to be rolled out
- An open platform for the National Digital Health Ecosystem will be rolled out
- Push for Electric Vehicles, battery-swapping policy with interoperability standards to boost EV eco system
- Data centers to get Infra Status
- Income from digital asset transfers to be taxed at 30% giving it a legal status in India
- Period of incorporation for eligible startups to claim tax benefits extended by 1 year
The Tech Panda gathered the reactions, both positive and negative, of several experts to find out how the budget has fared in the eyes of the business people.
Kulin Shah, Co-Founder & COO, Onsurity
It will be interesting to see what the government has planned for the National Digital Health Ecosystem, we look forward to its alignment to the Universal Health Coverage and aim to support the initiative with our technology and services
“FM’s budget speech addressed the much needed impetus for promoting digital economy and fintech with the GOI committed to strengthening the abilities of the poor. The opportunity for correcting tax errors for up to 2 years and support to startups are also welcome decisions.
“We also welcome the move to have a national telehealth program in light of the mental health crisis induced by the pandemic. It will be interesting to see what the government has planned for the National Digital Health Ecosystem, we look forward to its alignment to the Universal Health Coverage and aim to support the initiative with our technology and services.”
Sahil Dharia, Founder & CEO, Soothe Healthcare
The finance minister has incorporated the much-needed inclusions that will give pace to businesses and hope to build a US$10 trillion economy
“The Union Budget 2022-23 is a ‘Practical Budget’ giving a runway to long term growth. The finance minister has incorporated the much-needed inclusions that will give pace to businesses and hope to build a US$10 trillion economy. The encouraging parameters in the Union Budget 2022 are:
“Enhancement in the digital ecosystem for skilling and livelihood through online training programs will also enable more upskilled and employable ready people to enter the workforce.
“Infrastructure and capacity building of India in roads, highways will put the money in the hands of the working class and serve to boost the consumption economy.
“A digital Rupee and digital banking at all the post offices will facilitate trade and grow consumption at grassroot level.”
Shashank Khade, Co-founder & Director, Entrust Family Office
This is a Budget that is focused on prioritising capital expenditure as a key lever for growth, which we endorse as an approach given the multiplier effect of many of these investments. In that sense, the budget augurs well for the economy
“This is a Budget that is focused on prioritising capital expenditure as a key lever for growth, which we endorse as an approach given the multiplier effect of many of these investments. In that sense, the budget augurs well for the economy and the continuing decline in revenue expenditure as a share of total expenditure towards capital expenditure improves quality of expenditure.
“To put it in context, the 35% increase in capital expenditure, 55% increase in road sector allocation and 17% increase in railways are significant numbers. On top of this is support to state governments towards capex. Of course, execution of projects in these areas and in urban infrastructure is key towards enjoying the full benefits of this expenditure.
“The other point to note is that a larger share of defense capital expenditure is targeted to domestic procurement that could also have second order implications for R&D and multiplier effects in the economy.
“The Budget is extremely future-oriented. Emphasis on digitisation of government processes, incentives for startups enabling flow of capital (lower capital gains for venture investments), clean energy enablers for fundraising and PLI, categorising data centres and energy storage systems as infrastructure, recognising gaming as an area of potential, and a general focus on sunrise sectors is evidence of this. Impact of this will be felt over the next decades and not in the short term. The taxation on cryptocurrency while at the same time talking about a digital rupee indicates the government’s recognition of block chain as an important future technology to enable.
“The gross market borrowing through G-secs for 22-23 at INR 14.95 lakh crores is higher than the amount expected by the market and has led to sharp increase in G-Sec yields. However, tax buoyancy is very high and could well surprise on the upside thereby leading to lower fiscal deficit in the current and coming year than forecasted.
“However, what quantum of issuance would be issued as sovereign green bonds and whether it shall be issued to a new set of investors (viz Foreign Institutions) is a key part we can watch out for. Overall, the credibility of numbers is very high as is evident in the tax growth rates and PSU divestment numbers being very moderate. Indicative of an intent to under promise and over deliver.”
Ankit Poddar, Director, Candle Partners
This will augur an increase in investment and spending
“Increased capital expenditure by 35.4% from INR 5.45 lakh crore in fiscal year 2021-22 to INR7.05 lakh crore in the next fiscal year is a very positive announcement, this will augur an increase in investment and spending.
Sushant Gupta, Founder & CEO of SG Analytics
I wholeheartedly welcome the decision regarding the provision of green jobs and the acknowledgment of new-age entrepreneurship and its drivers
“The Union budget 2022 is certainly growth-oriented and futuristic as it covers different facets of technology and embraces digital adoption widely. Whether it is the introduction of a new digital Rupee or Central Bank Digital Currency (CBDC), legitimizing private cryptocurrencies and NFT (with 30% tax imposition on virtual assets), digital universities, or digitization of post offices, the list is ambitious and futuristic. The thrust and focus on digital technology are certainly welcomed and appreciated.
“Also, very timely and heartening is the focus on inclusive development, energy transition, and climate action as three of the four pillars of development. I wholeheartedly welcome the decision regarding the provision of green jobs and the acknowledgment of new-age entrepreneurship and its drivers.
Tapan Mishra, Founder, Seniority & Evergreen Club
The budget is a blend between a welfare and a reformist budget
“The budget is a blend between a welfare and a reformist budget. It is a delight to see the announcement of National Tele Mental Health Programme. A step forward for tackling issues less talked about. This gives me hope, that soon enough, govt will also recognise the challenges specifically faced by the older adults.
“Certain state govts have already supported and recognised the plight of the elders of the country. Further, with initiatives like Ease of Doing Business 2.0 with One nation One registration and PM GatiShakti, we can see the commitment of the govt to work towards the issues faced by businesses and startups specifically.”
Dibyendu Bindal, Founder & CEO, MIGHTY Foods
It’s very heartening to see the government’s focus towards a sustainable future
“It’s very heartening to see the government’s focus towards a sustainable future, EV segment etc. The push the government is giving towards new startups will motivate new and young entrepreneurs.”
Rajat Singhania, Founder of HyLyt by SocioRAC
Lots has been done, more needs to be done for sure but this is surely a step in that direction
“I welcome this budget, which is keeping up with the need of the times (data centers now counted as infrastructure, crypto holding accepted as legal, e-passports, National Digital Health system); leverages India’s strength (push to agro startups, using drones to solve india specific problems); progressive (job creation, economic growth at more than 9%); and innovative (PM Gati Shakti, EV battery swapping policy). Lots has been done, more needs to be done for sure but this is surely a step in that direction.”
Ajay Ramasubramaniam, Co-Founder & CEO, Startup Reseau
India @75 is setting up a massive road map for India @100 to be a technology powerhouse in infrastructure, financial services, agriculture and national defense
“Wearing a startup enabler lens, what is noteworthy is the mention of technologies ranging across AI, IOT, Blockchain and digital across core sectors of the economy. India @75 is setting up a massive road map for India @100 to be a technology powerhouse in infrastructure, financial services, agriculture and national defense.
“Setting up a roadmap for adoption of CBDC and making digital and fintech as the priority of the govt. stands out in the Budget 2022 announcement. Allocation of INR 1,500 crores for development initiatives in the Northeast is another big one, that should see the startup ecosystem grow in the region.”
