Analysis of Union Budget 2022-2023 - PART 1
CONTENTS
- Introduction
- PM GatiShakti
- Inclusive Development
- Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition & Climate Action
- Financing of Investments
- Fiscal Management
Introduction
Finance Minister Nirmala Sitharaman is set to present her fourth Union Budget today at a time when India’s economic recovery faces fresh challenges. Follow this article for analysis.
The overall, sharp rebound and recovery of the economy are reflective of our country’s strong resilience. India’s economic growth in the current year is estimated to be 9.2 per cent, the highest among all large economies.
This Union Budget seeks to lay foundation & give a blueprint of the economy over ‘Amrit Kal’ of next 25 years - from India at 75 to India at 100: FM Nirmala Sitharaman
By achieving certain goals during the Amrit Kaal, the government aims to attain the vision. They are:
- Complementing the macro-economic level growth focus with a microeconomic level all-inclusive welfare focus.
- Promoting digital economy & fintech, technology-enabled development, energy transition, and climate action, and
- Relying on a virtuous cycle starting from private investment with public capital investment helps to crowd-in private investment.
Since 2014 our government’s focus has been on the empowerment of citizens, especially the poor and the marginalised. Measures have included programmes that have provided housing, electricity, cooking gas and access to water. Govt also have programmes for ensuring financial inclusion and direct benefit transfers. Govt are committed to strengthening the abilities of the poor to tap all opportunities. The government constantly strives to provide the necessary ecosystem for the middle classes – a vast and wide section that is populated across various middle-income brackets – to make use of the opportunities they so desire.
The initiatives of the last year’s Budget have seen significant progress and have been provided with adequate allocations in this Budget as well.
This year govt strengthening of health infrastructure, speedy implementation of the vaccination programme, and the nationwide resilient response to the current wave of the pandemic are evident for all.
The Productivity Linked Incentive in 14 sectors for achieving the vision of AtmaNirbhar Bharat has received an excellent response, with the potential to create 60 lakh new jobs, and additional production of 30 lakh crore during the next 5 years.
Towards implementation of the new Public Sector Enterprise policy, the strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected. The IPO of the LIC is expected shortly. Others too are in the process for 2022-23.
The National Bank for Financing Infrastructure and Development (NaBFID) and National Asset Reconstruction Company have commenced their activities.
This Budget continues to provide the impetus for growth. It lays a parallel track of (1) a blueprint for the Amrit Kaal, which is futuristic and inclusive. This will directly benefit our youth, women, farmers, the Scheduled Castes and the Scheduled Tribes. And (2) big public investment for modern infrastructure, readying for India at 100. This shall be guided by PM GatiShakti and be benefit by the synergy of the multi-modal approach. Moving forward, on this parallel track, we lay the following four priorities:
- PM GatiShakti
- Inclusive Development
- Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition, and Climate Action
- Financing of Investments
PM GatiShakti
PM GatiShakti is a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely,
- Roads,
- Railways,
- Airports,
- Ports,
- Mass Transport,
- Waterways, and
- Logistics Infrastructure.
All seven engines will pull forward the economy in unison. These engines are supported by the complementary roles of Energy Transmission, IT Communication, Bulk Water & Sewerage, and Social Infrastructure. Finally, the approach is powered by Clean Energy and Sabka Prayas – the efforts of the Central Government, the state governments, and the private sector together – leading to huge job and entrepreneurial opportunities for all, especially the youth.
PM GatiShakti National Master Plan
The scope of PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency. It will also include the infrastructure developed by the state governments as per the GatiShakti Master Plan.
The focus will be on planning, financing including through innovative ways, use of technology, and speedier implementation.
The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with the PM GatiShakti framework. The touchstone of the Master Plan will be world-class modern infrastructure and logistics synergy among different modes of movement – both of people and goods – and the location of projects. This will help raise productivity and accelerate economic growth and development.
Road Transport
PM GatiShakti Master Plan for Expressways will be formulated in 2022-23 to facilitate faster movement of people and goods. The National Highways network will be expanded by 25,000 km in 2022-23. ` 20,000 crores will be mobilized through innovative ways of financing to complement the public resources.
Seamless Multimodal Movement of Goods and People
The data exchange among all mode operators will be brought on Unified Logistics Interface Platform (ULIP), designed for Application Programming Interface (API). This will provide for efficient movement of goods through different modes, reducing logistics cost and time, assisting just-in-time inventory management, and eliminating tedious documentation. Most importantly, this will provide real-time information to all stakeholders, and improve international competitiveness. An open-source mobility stack, for organizing seamless travel of passengers will also be facilitated.
Multimodal Logistics Parks
Contracts for implementation of Multimodal Logistics Parks at four locations through PPP mode will be awarded in 2022-23.
Railways
Railways will develop new products and efficient logistics services for small farmers and Small and Medium Enterprises, besides taking the lead in the integration of Postal and Railways networks to provide seamless solutions for the movement of parcels.
‘One Station-One Product’ concept will be popularized to help local businesses & supply chains.
As a part of Atmanirbhar Bharat, 2,000 km of the network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23. Four hundred new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.
One hundred PM GatiShakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.
Mass Urban Transport including Connectivity to Railways
Innovative ways of financing and faster implementation will be encouraged for building metro systems of appropriate type at scale. Multimodal connectivity between mass urban transport and railway stations will be facilitated on priority. The design of metro systems, including civil structures, will be re-oriented and standardized for Indian conditions and needs.
Parvatmala: National Ropeways Development Programme
As a preferred ecologically sustainable alternative to conventional roads in difficult hilly areas, National Ropeways Development Programme will be taken up on PPP mode. The aim is to improve connectivity and convenience for commuters, besides promoting tourism. This may also cover congested urban areas, where a conventional mass transit system is not feasible. Contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23.
Capacity Building for Infrastructure Projects
With technical support from the Capacity Building Commission, central ministries, state governments, and their infra-agencies will have their skills upgraded. This will ramp up capacity in planning, design, financing (including innovative ways), and implementation management of the PM GatiShakti infrastructure projects.
OPEN ZERODHA ACCOUNT FOR INVESTING
Inclusive Development
Agriculture
The procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will cover 1208 lakh metric tonnes of wheat and paddy from 163 lakh farmers, and ` 2.37 lakh crore direct payment of MSP value to their accounts.
Chemical-free Natural Farming will be promoted throughout the country, with a focus on farmers’ lands in 5-km wide corridors along river Ganga, at the first stage.
2023 has been announced as the International Year of Millets. Support will be provided for post-harvest value addition, enhancing domestic consumption, and branding millet products nationally and internationally.
To reduce our dependence on the import of oilseeds, a rationalised and comprehensive scheme to increase domestic production of oilseeds will be implemented.
For the delivery of digital and hi-tech services to farmers with the involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of the agri-value chain, a scheme in PPP mode will be launched.
Use of ‘Kisan Drones’ will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients.
States will be encouraged to revise syllabi of agricultural universities to meet the needs of natural, zero-budget and organic farming, modern-day agriculture, value addition and management.
A fund with blended capital, raised under the co-investment model, will be facilitated through NABARD. This is to finance startups for agriculture & rural enterprise, relevant for farm produce value chain. The activities for these startups will include, inter alia, support for FPOs, machinery for farmers on a rental basis at farm level, and technology including IT-based support.
Ken Betwa project and Other River Linking Projects
Implementation of the Ken-Betwa Link Project, at an estimated cost of ` 44,605 crores will be taken up. This is aimed at providing irrigation benefits to 9.08 lakh hectares of farmers’ lands, drinking water supply for 62 lakh people, 103 MW of Hydro, and 27 MW of solar power. Allocations of ` 4,300 crores in RE 2021-22 and ` 1,400 crores in 2022-23 have been made for this project.
Draft DPRs of five river links, namely Damanganga-Pinjal, Par-Tapi Narmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been finalized. Once a consensus is reached among the beneficiary states, the Centre will provide implementation support.
Food Processing
For farmers to adopt suitable varieties of fruits and vegetables, and to use appropriate production and harvesting techniques, our government will provide a comprehensive package with the participation of state governments.
MSME
Udyam, e-Shram, NCS and ASEEM portals will be interlinked. Their scope will be widened. They will now perform as portals with live, organic databases, providing G2C, B2C and B2B services. These services will relate to credit facilitation, skilling, and recruitment with an aim to further formalise the economy and enhance entrepreneurial opportunities for all.
Emergency Credit Line Guarantee Scheme (ECLGS) has provided much-needed additional credit to more than 130 lakh MSMEs. This has helped them mitigate the adverse impact of the pandemic. The hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business. Considering these aspects, the ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by ` 50,000 crores to the total cover of ` 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.
Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with the required infusion of funds. This will facilitate additional credit of ` 2 lakh crore for Micro and Small Enterprises and expand employment opportunities.
Raising and Accelerating MSME Performance (RAMP) programme with an outlay of ` 6,000 crores over 5 years will be rolled out. This will help the MSME sector become more resilient, competitive and efficient.
OPEN ZERODHA ACCOUNT FOR INVESTING
Skill Development
Skilling programmes and partnerships with the industry will be reoriented to promote continuous skilling avenues, sustainability, and employability. The National Skill Qualification Framework (NSQF) will be aligned with dynamic industry needs.
Digital Ecosystem for Skilling and Livelihood – the DESH-Stack e portal – will be launched. This aims to empower citizens to skill, reskill or upskill through online training. It will also provide API-based trusted skill credentials, payment and discovery layers to find relevant jobs and entrepreneurial opportunities.
Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS). In select ITIs, in all states, the required courses for skilling will be started.
Universalization of Quality Education
Due to the pandemic-induced closure of schools, our children, particularly in the rural areas, those from Scheduled Castes and Scheduled Tribes, and other weaker sections, have lost almost 2 years of formal education. Mostly, these are children in government schools. We recognise the need to impart supplementary teaching and to build a resilient mechanism for education delivery. For this purpose, the ‘one class-one TV channel’ programme of PM eVIDYA will be expanded from 12 to 200 TV channels. This will enable all states to provide supplementary education in regional languages for classes 1-12.
In vocational courses, to promote crucial critical thinking skills, to give space for creativity, 750 virtual labs in science and mathematics, and 75 skilling e-labs for the simulated learning environment, will be set up in 2022-23.
High-quality e-content in all spoken languages will be developed for delivery via the internet, mobile phones, TV and radio through Digital Teachers.
A competitive mechanism for the development of quality e-content by the teachers will be set up to empower and equip them with digital tools of teaching and facilitate better learning outcomes.
Digital University
A Digital University will be established to provide access to students across the country for world-class quality universal education with a personalised learning experience at their doorsteps. This will be made available in different Indian languages and ICT formats. The University will be built on a networked hub-spoke model, with the hub building cutting edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hub-spokes.
Ayushman Bharat Digital Mission
An open platform, for the National Digital Health Ecosystem, will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.
National Tele Mental Health Programme
The pandemic has accentuated mental health problems in people of all ages. To better access quality mental health counselling and care services, a ‘National Tele Mental Health Programme’ will be launched. This will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre and the International Institute of Information Technology-Bangalore (IIITB) providing technical support.
Har Ghar, Nal Se Jal
The current coverage of Har Ghar, Nal Se Jal is 8.7 crores. Of this 5.5 crore households were provided tap water in the last 2 years itself. Allocation of ` 60,000 crores has been made with an aim to cover 3.8 crore households in 2022-23.
Housing for All
In 2022-23 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban. ` 48,000 crores is allocated for this purpose. 56. The Central Government will work with the state governments for a reduction of time required for all land and construction-related approvals, for promoting affordable housing for the middle class and Economically Weaker Sections in urban areas. We shall also work with the financial sector regulators to expand access to capital along with the reduction in the cost of intermediation.
OPEN ZERODHA ACCOUNT FOR INVESTING
Prime Minister’s Development Initiative for North East Region (PM DevINE)
A new scheme, Prime Minister’s Development Initiative for North East, PM-DevINE, will be implemented through the North-Eastern Council. It will fund infrastructure, in the spirit of PM GatiShakti, and social development projects based on the felt needs of the North-East. This will enable livelihood activities for youth and women, filling the gaps in various sectors. It will not be a substitute for existing central or state schemes. While the central ministries may also pose their candidate projects, priority will be given to those posed by the states. An initial allocation of ` 1,500 crores will be made, and the initial list of projects is given in Annexure-1.
Aspirational Blocks Programme
Our Govt’s vision to improve the quality of life of citizens in the most backward districts of the country through the Aspirational Districts Programme has been translated into reality in a short span of time. 95 per cent of those 112 districts have made significant progress in key sectors such as health, nutrition, financial inclusion and basic infrastructure. They have surpassed the state average values. However, in those districts, some blocks continue to lag. In 2022-23, the programme will focus on such blocks in those districts.
Vibrant Villages Programme
Border villages with a sparse population, limited connectivity and infrastructure often get left out from the development gains. Such villages on the northern border will be covered under the new Vibrant Villages Programme. The activities will include the construction of village infrastructure, housing, tourist centres, road connectivity, provisioning of decentralized renewable energy, direct to home access for Doordarshan and educational channels, and support for livelihood generation. Additional funding for these activities will be provided. Existing schemes will be converged. We will define their outcomes and monitor them on a constant basis.
Anytime – Anywhere Post Office Savings
In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs, and also providing online transfer of funds between post office accounts and bank accounts. This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion.
Digital Banking
In recent years, digital banking, digital payments and fintech innovations have grown at a rapid pace in the country. The government is continuously encouraging these sectors to ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner. Taking forward this agenda, and to mark 75 years of our independence, it is proposed to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.
Digital Payments
The financial support for the digital payment ecosystem announced in the previous Budget will continue in 2022-23. This will encourage further adoption of digital payments. There will also be a focus to promote the use of payment platforms that are economical and user friendly.
Productivity Enhancement & Investment, Sunrise Opportunities, Energy
Transition, and Climate Action
Green Clearances
A single window portal, PARIVESH, for all green clearances was launched in 2018. It has been instrumental in reducing the time required for approvals significantly. The scope of this portal will now be expanded, to provide information to the applicants. Based on the location of units, information about specific approvals will be provided. It will enable application for all four approvals through a single form, and tracking of the process through Centralized Processing Centre-Green (CPC-Green).
e-Passport
The issuance of e-Passports using embedded chips and futuristic technology will be rolled out in 2022-23 to enhance convenience for the citizens in their overseas travel.
Urban Development
By the time of India nearly half, of the population is likely to be living in urban areas. To prepare for this, orderly urban development is of critical importance. This will help realize the country’s economic potential, including livelihood opportunities for the demographic dividend. For this, on the one hand, we need to nurture the megacities and their hinterlands to become current centres of economic growth. On the other hand, we need to facilitate tier 2 and 3 cities to take on the mantle in the future. This would require us to reimagine our cities into centres of sustainable living with opportunities for all, including women and youth. For this to happen, urban planning cannot continue with a business-as-usual approach. We plan to steer a paradigm change.
A high-level committee of reputed urban planners, urban economists and institutions will be formed to make recommendations on urban sector policies, capacity building, planning, implementation and governance.
Urban Planning Support to States
For urban capacity building, support will be provided to the states. Modernization of building bye-laws, Town Planning Schemes (TPS), and Transit-Oriented Development (TOD) will be implemented. This will facilitate reforms for people to live and work closer to mass transit systems.
The Central Government’s financial support for mass transit projects and the AMRUT scheme will be leveraged for the formulation of action plans and their implementation for facilitating TOD and TPS by the states.
For developing India specific knowledge in urban planning and design, and to deliver certified training in these areas, up to five existing academic institutions in different regions will be designated as centres of excellence. These centres will be provided endowment funds of ` 250 crores each. In addition, AICTE will take the lead to improve syllabi, quality and access to urban planning courses in other institutions.
Clean & Sustainable Mobility
Our Govt will promote a shift to the use of public transport in urban areas. This will be complemented by cleantech and governance solutions, special mobility zones with zero fossil-fuel policy, and EV vehicles.
Battery Swapping Policy
Considering the constraint of space in urban areas for setting up charging stations at scale, a battery swapping policy will be brought out and interoperability standards will be formulated. The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service. This will improve efficiency in the EV ecosystem.
OPEN ZERODHA ACCOUNT FOR INVESTING
Land Records Management
Efficient use of land resources is a strong imperative. States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records. The facility for transliteration of land records across any of the Schedule VIII languages will also be rolled out.
The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’ will be promoted as an option for a uniform process for registration and ‘anywhere registration’ of deeds & documents.
Insolvency and Bankruptcy Code
Necessary amendments in the Code will be carried out to enhance the efficacy of the resolution process and facilitate cross border insolvency resolution.
AVGC Promotion Task Force
The animation, visual effects, gaming, and comics (AVGC) sector offer immense potential to employ youth. An AVGC promotion task force with all stakeholders will be set up to recommend ways to realize this and build domestic capacity for serving our markets and the global demand.
Telecom Sector
Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities. Required spectrum auctions will be conducted in 2022 to facilitate the rollout of 5G mobile services within 2022- 23 by private telecom providers.
A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme.
To enable affordable broadband and mobile service proliferation in rural and remote areas, five per cent of annual collections under the Universal Service Obligation Fund will be allocated. This will promote the R&D and commercialization of technologies and solutions.
Govt’s vision is that all villages and their residents should have the same access to e-services, communication facilities, and digital resources as urban areas and their residents. The contracts for laying optical fibre in all villages, including remote areas, will be awarded under the Bharatnet project through PPP in 2022-23. Completion is expected in 2025. Measures will be taken to enable better and more efficient use of optical fibre.
AtmaNirbharta in Defence
The government is committed to reducing imports and promoting AtmaNirbharta in equipment for the Armed Forces. 68 per cent of the capital procurement budget will be earmarked for the domestic industry in 2022-23, up from 58 per cent in 2021-22.
Defence R&D will be opened up for industry, startups and academia with 25 per cent of the defence R&D budget earmarked. Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through the SPV model. An independent nodal umbrella body will be set up for meeting wide-ranging testing and certification requirements.
Sunrise Opportunities
Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country. They provide employment opportunities for youth and make Indian industry more efficient and competitive.
Supportive policies, light-touch regulations, facilitative actions to build domestic capacities, and promotion of research & development will guide the government’s approach. For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry and public institutions, government contribution will be provided.
Energy Transition and Climate Action
The risks of climate change are the strongest negative externalities that affect India and other countries. As Hon’ble Prime Minister said at the COP26 summit in Glasgow last November, “what is needed today is mindful and deliberate utilisation, instead of mindless and destructive consumption.” The low carbon development strategy as enunciated in the ‘panchamrit’ that he announced is an important reflection of our government’s strong commitment to sustainable development.
This strategy opens up huge employment opportunities and will take the country on a sustainable development path. This budget proposes several near-term and long-term actions accordingly.
Solar Power
To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of ` 19,500 crores for Production Linked Incentive for the manufacture of high-efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.
Circular Economy
The Circular Economy transition is expected to help in productivity enhancement as well as create large opportunities for new businesses and jobs. The action plans for ten sectors such as electronic waste, end-of-life vehicles, used oil waste, and toxic & hazardous industrial waste is ready. The focus now will be on addressing important cross-cutting issues of infrastructure, reverse logistics, technology up-gradation and integration with the informal sector. This will be supported by active public policies covering regulations, extended producers’ responsibilities framework and innovation facilitation.
Transition to Carbon Neutral Economy
Five to seven per cent biomass pellets will be co-fired in thermal power plants resulting in CO2 savings of 38 MMT annually. This will also provide extra income to farmers and job opportunities to locals and help avoid stubble burning in agriculture fields.
Saving energy is an important aspect of energy management. Hence, energy efficiency and savings measures will be promoted. This will be done in large commercial buildings through the Energy Service Company (ESCO) business model. It will facilitate capacity building and awareness for energy audits, performance contracts, and common measurement & verification protocols.
Four pilot projects for coal gasification and conversion of coal into chemicals required for the industry will be set up to evolve technical and financial viability.
The policies and required legislative changes to promote agroforestry and private forestry will be brought in. In addition, financial support will be provided to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry.
OPEN ZERODHA ACCOUNT FOR INVESTING
Financing of Investments
Public Capital Investment
Capital investment holds the key to speedy and sustained economic revival and consolidation through its multiplier effect. Capital investment also helps in creating employment opportunities, inducing enhanced demand for manufactured inputs from large industries and MSMEs, services from professionals, and helping farmers through better agri-infrastructure. The economy has shown strong resilience to come out of the effects of the pandemic with high growth. However, we need to sustain that level to make up for the setback of 2020-21.
As outlined in para 5 earlier, the virtuous cycle of investment requires public investment to crowd-in private investment. At this stage, private investments seem to require that support to rise to their potential and to the needs of the economy. Public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23.
Considering the above imperative, the outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from ` 5.54 lakh crore in the current year to ` 7.50 lakh crore in 2022-23. This has increased to more than 2.2 times the expenditure of 2019-20. This outlay in 2022-23 will be 2.9 per cent of GDP.
Effective Capital Expenditure
With this investment taken together with the provision made for the creation of capital assets through Grants-in-Aid to States, the ‘Effective Capital Expenditure’ of the Central Government is estimated at ` 10.68 lakh crore in 2022-23, which will be about 4.1 per cent of GDP.
Green Bonds
As a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
GIFT-IFSC
World-class foreign universities and institutions will be allowed in the GIFT City to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics free from domestic regulations, except those by IFSCA to facilitate the availability of high-end human resources for financial services and technology.
An International Arbitration Centre will be set up in the GIFT City for the timely settlement of disputes under international jurisprudence. 106. Services for global capital for sustainable & climate finance in the country will be facilitated in the GIFT City.
Infrastructure Status
Data Centres and Energy Storage Systems including dense charging infrastructure and grid-scale battery systems will be included in the harmonized list of infrastructure. This will facilitate credit availability for digital infrastructure and clean energy storage.
Venture Capital and Private Equity Investment
Venture Capital and Private Equity invested more than ` 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystems. Scaling up this investment requires a holistic examination of regulatory and other frictions. An expert committee will be set up to examine and suggest appropriate measures.
Blended Finance
Government-backed Funds NIIF and SIDBI Fund of Funds have provided scale capital creating a multiplier effect. For encouraging important sunrise sectors such as Climate Action, Deep-Tech, Digital Economy, Pharma and Agri-Tech, the government will promote thematic funds for blended finance with the government share being limited to 20 per cent and the funds being managed by private fund managers.
Financial Viability of Infrastructure Projects
For financing the infrastructure needs, the stepping-up of public investment will need to be complemented by private capital at a significant scale. Measures will be taken to enhance the financial viability of projects including PPP, with technical and knowledge assistance from multi-lateral agencies. Enhancing financial viability shall also be obtained by adopting global best practices, innovative ways of financing, and balanced risk allocation.
Digital Rupee
The introduction of Central Bank Digital Currency (CBDC) will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system. It is, therefore, proposed to introduce Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23.
Financial Assistance to States for Capital Investment
Reflecting the true spirit of cooperative federalism, the Central Government is committed to bolstering the hands of the states in enhancing their capital investment towards creating productive assets and generating remunerative employment. The ‘Scheme for Financial Assistance to States for Capital Investment’ has been extremely well received by the states. In deference to the requests received during my meeting with Chief Ministers and state Finance Ministers, the outlay for this scheme is being enhanced from ` 10,000 crores in the Budget Estimates to ` 15,000 crores in the Revised Estimates for the current year.
For 2022-23, the allocation is ` 1 lakh crore to assist the states in catalysing overall investments in the economy. These fifty-year interest-free loans are over and above the normal borrowings allowed to the states.
This allocation will be used for PM GatiShakti related and other productive capital investments of the states. It will also include components for:
- Supplemental funding for priority segments of PM Gram Sadak Yojana, including support for the states’ share,
- Digitisation of the economy, including digital payments and completion of OFC network, and
- Reforms related to building bylaws, town planning schemes, transit-oriented development, and transferable development rights.
In 2022-23, in accordance with the recommendations of the 15th Finance Commission, the states will be allowed a fiscal deficit of 4 per cent of GSDP of which 0.5 per cent will be tied to power sector reforms, for which the conditions have already been communicated in 2021-22.
Fiscal Management
As against a total expenditure of ` 34.83 lakh crore projected in the Budget Estimates 2021-22, the Revised Estimate is ` 37.70 lakh crore. The Revised Estimate of capital expenditure is ` 6.03 lakh crore. This includes an amount of ` 51,971 crores towards the settlement of outstanding guaranteed liabilities of Air India and its other sundry commitments.
Coming to the Budget Estimates, the total expenditure in 2022-23 is estimated at ` 39.45 lakh crore, while the total receipts other than borrowings are estimated at ` 22.84 lakh crore.
The Revised Fiscal Deficit in the current year is estimated at 6.9 per cent of GDP as against 6.8 per cent projected in the Budget Estimates. The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by me last year to reach a fiscal deficit level below 4.5 per cent by 2025-26. While setting the fiscal deficit level in 2022-23, will help nurture growth, through public investment, to become stronger and more sustainable.
PART 2 COMING SOON !!
THANK YOU
Disclaimer: We make all articles for educational purposes. We don't give any buy/sell recommendations. Before investing in any stock do your own research and then invest in the long term.
Comments
Post a Comment