View from India: Working towards a Digital Budget
Finance Minister Nirmala Sitharaman has presented the Union Budget 2021-22 in Parliament on 1 February. Here are some highlights.
Sitharaman described this as a digital Budget. There has been a manifold increase in digital payments in the recent past. To give a further boost to digital transactions, a sum of Rs 1,500 crore (15bn rupees, £150m) has been earmarked for a proposed scheme that will provide financial incentive to promote digital modes of payment. Let’s hope this becomes a positive step towards realising a cashless economy.
Also on the agenda is the National Language Translation Mission (NTLM). The upcoming project is to make Internet-based governance-and-policy related knowledge available in major Indian languages.
The Government of India (GoI) plans to amend the 2016 National Apprenticeship Promotion Scheme to further enhance apprenticeship opportunities for the youth. The existing National Apprenticeship Training Scheme (NATS) will be realigned to include post-education apprenticeship, besides training graduates and diploma holders in Engineering. Over Rs 3,000 crore will be set aside for this initiative.
A press note from apex body NASSCOM states, “Keeping in mind the unprecedented times the world and the country have been witnessing the past one year, it is commendable for the government for creating a comprehensive budget with a sharp focus on sustaining economic activity and investment in key sectors like healthcare, fintech, education, infrastructure, R&D, start-ups and manufacturing.”
The Budget has other dimensions, and one that stands out is a relief measure for the auto sector. A separate voluntary vehicle scrapping policy will be announced to phase out old and unfit vehicles. This will help in encouraging fuel-efficient, environment-riendly vehicles, thereby reducing vehicular pollution and oil import bills. Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles. Details of the scheme will be separately shared by the Ministry.
“As the first budget during recovery of the pandemic, we are optimistic that the slew of measures announced on healthcare and infrastructure will provide impetus to the economy. The agenda to focus on the six pillars including infrastructure, innovation and R&D clearly sets India on a path of recovery,” explained Suman Reddy, managing director, Pega India.
Domestic electronic manufacturing has grown rapidly, as mobiles and chargers are being exported to various countries. “For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil’ rate to a moderate 2.5 per cent,” the finance minister (FM) highlighted.
The Budget Speech of July 2019 had already decided to boost research by announcing the establishment of the National Research Foundation (NRF). A move in this direction is that the modalities of NRF have been worked out. The outlay will be Rs 50,000 crore spread over five years. It will ensure that the overall research ecosystem of the country is strengthened with focus on identified national-priority thrust areas. “Enhancing the digital backbone of the country, the announcement on the fintech hub at the GIFT-IFSC and R&D investment of Rs 50,000 crore over five years will ensure that the overall research ecosystem of the country is strengthened with a focus on identified national priority thrust areas,” reasoned Reddy. GIFT-IFSC is Gandhinagar Gujarat International Finance Tec-City and International Financial Services Centre. This will be the platform for fintech startups that will expand globally.
As a Covid-related outcome, an amount of Rs 35,000 crore has been allocated for Covid-19 vaccine in the budgetary expenditure of 2021-22. “The Pneumococcal Vaccine, a Made in India product, is presently limited to only five states will be rolled out across the country. This will avert more than 50,000 child deaths annually,” assured the FM.
The Budget has outlined Atmanirbhar Bharat or Self Reliant India as an expression of 130 crore Indians who have full confidence in their capabilities and skills. To that extent, the country is already part of international groupings such as the G20 and BRICS. The Coalition for Disaster Resilient Infrastructure and the International Solar alliance are realities today due to India’s efforts.
The Government’s Atmanirbhar package focuses on increasing spend towards the creation of jobs and rural development, generous allocations for development schemes, handing more monetary benefits to the common man, and easing rules to attract foreign investments. “With a significant increase in capex (capital expenditure) from 4.39 lakh crore [4.39 trillion] to 5.54 lakh crore, the Atmanirbhar Bharat Initiative will be strengthened with more focus on domestic manufacturing and production, laying the foundation for the five-trillion-dollar economy by 2030,” said Balajee Sowrirajan, managing director, Samsung Semiconductor R&D (SSIR).
Space exploration has been a concern area for the country. The New Space India Limited (NSIL), a PSU (public sector undertaking) under the Department of Space will execute the PSLV-CS51 launch, carrying the Amazonia satellite from Brazil, along with a few smaller Indian satellites. As part of the Gaganyaan mission activities, four Indian astronauts are being trained on generic space flight aspects in Russia. The first unmanned launch is slated for December 2021.
Besides space, the Budget is also looking closely at oceanic opportunities. This is understandable, as the oceans are a storehouse of living and non-living resources. For better clarity, GoI will launch a Deep Ocean Mission. This mission will cover deep ocean survey exploration and projects for the conservation of deep sea bio-diversity. It will be backed by a budget outlay of more than Rs 4,000 crore over five years.
At a time when Covid-19 has disrupted our lives, the FM has allotted budgetary expenditure for various verticals. “We are very optimistic with the focus given on innovation and R&D being identified as one of the key pillars, I believe 'Design for India' will gain momentum and localisation of product designs will lead towards an aspirational and innovative India,” summed up Sowrirajan. These will lead to the next phase of inclusive growth with increased emphasis on skilling and job creation.
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