Finance Minister Nirmala Sitharaman´s Union Budget for 2022 has proposed several steps for a more digital India, keeping in mind the challenges being faced by the country in the ongoing crisis. The Budget has been praised for its potential for blockchain adoption as fintech takes priority through the digital Rupee and taxed crypto and NFTs.
HIGHLIGHTS
- Digital banking by post offices
- Digital payments: Scheduled commercial banks to set up 75
- Digital banking units in 75 districts
- Introduction of digital Rupee by RBI starting 2022-23
- Introduction of a central bank digital currency (RBI Crypto)
- 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
- Digital ecosystem for skilling and livelihood
- National Digital Health Ecosystem will be rolled out
- National Tele Mental Health Programme will be launched
- 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
The Tech Panda gathered the reactions, both positive and negative, of several experts to find out how digital the budget is.
Bhaskar Majumdar, Managing Partner, Unicorn India Ventures
At the macro level, this tech enablement as an integral part of governance will be a boost for all new age tech companies and would further enhance the environment of new age digital and tech companies
“This budget shows that technology enablement for transparency and roll-out at scale remains at the heart of the government. Every aspect of the Budget speech has this aspect in mind. At the macro level, this tech enablement as an integral part of governance will be a boost for all new age tech companies and would further enhance the environment of new age digital and tech companies.
“Drones have now become an Integral part of the implementation of schemes be it in agtech, in defence and other areas. Creation of Nabard Agritech Fund for Kisan Drones shows the government recognition of a new view on how to upgrade the farming.
“Recognition of digital assets and bringing them under the tax structure is an excellent initiative as this would bring these in the mainstream. The tax on crypto/ NFTs will now make it legalised and users won’t be able to circumvent tax and other financial regularities.
“In addition to this, Defence, Artificial Intelligence (AI), geospatial systems, drones, space economy, genomics & pharmaceuticals and clean mobility have immense potential to achieve sustainable development and offer employment to millions. The government will enable development in these sectors through the startup community. This is a long term directional growth budget and can be called the “digital future growth budget”.”
Prashanto Das, Founder, Hyperstate Technologies
Further, we see many opportunities esp with humanisation of assets that can help small businesses grow exponentially in building duniya ki apni dukan without a significant expense in infrastructure
“This is the big tech push budget- a recognition of breakthrough tech and all that it contributes to the growing digital consumption economy. No code tech platforms like Kappa that democratise tech for a larger mass can help the larger population become more tech savvy in a shorter time, creating new employment opportunities.
“Further, we see many opportunities esp with humanisation of assets that can help small businesses grow exponentially in building duniya ki apni dukan without a significant expense in infrastructure. For a country hungry to grow quickly, the FM’s words resonate with our outlook.”
Kanika Agarrwal, Co-founder, Upside AI
Moves like addressing crypto uncertainty, digital Rupee, investment in green energy, committee for startups, limiting surcharge on LTCG are all positive not just for the policies themselves but also for the signal the government is giving us
“This budget was great because it spoke the language of new India and looks to the future. Plenty of buzzwords – drones, blockchain, crypto, green energy, startups. But it was more than just lip service as the FM’s speech relays the government’s willingness to work with emerging sectors.
“Moves like addressing crypto uncertainty, digital Rupee, investment in green energy, committee for startups, limiting surcharge on LTCG are all positive not just for the policies themselves but also for the signal the government is giving us.
“Focus on infrastructure, the LIC IPO, updating the IBC are continuing themes from last year. We hope to see more execution on these this year. Overall, budget continued to signal intent and direction for the government which was positive. Negative was the lack of tax cuts or relief for consumers and businesses who have suffered greatly in the last two years.”
Suman Singh, CEO, Cyborgintell
We anticipate traditional financial institutes forge deeper partnerships with technology forward startups to lay down new digital rails within the traditional frameworks that exist in the financial services industry
“The budget of 2022 is an encouraging one for deep tech and innovation forward startups as we move towards fulfilling the digital India vision. The announcement of the digital currency is a move in the right direction, and we anticipate traditional financial institutes forge deeper partnerships with technology forward startups to lay down new digital rails within the traditional frameworks that exist in the financial services industry.
“The extension on the tax rebate too is a welcome move by the government as young startups such as ours double down on delivering innovation to traditional industries and can infuse capital in sharper product development that can create a win-win for startups as well as the legacy enterprises across key sectors such as financial services, manufacturing, logistics among others that are poised to push growth for the economy in the years to come.”
Sumit Sethi, Chief Operations Officer, eInfochips
The budget presented by FM gives a good fillip to digital India with the focus on 5G, data centres, digital currency and digital banking
“The budget presented by FM gives a good fillip to digital India with the focus on 5G, data centres, digital currency and digital banking. Further push on design-led manufacturing and EV policy will boost the economy along with creating jobs. The industry is also gearing up for 5G as it offers plenty of potential. 5G, in conjunction with IoT and other digital technologies such as digital twins, edge computing and artificial intelligence, can transform the way industries and businesses operate. With ultra-high speeds and low latency, 5G will help promote greater efficiencies, improve productivity, and deliver a superior customer experience.”
Shalu Jha, Co-founder & Director, PRandit Solution
Despite tech-enabled development being announced as one of the key focus areas of this year’s Budget, it was disappointing to note that no major announcements were made with regards to technology proliferation and promotion in the media or media-tech segments of the country
“Despite tech-enabled development being announced as one of the key focus areas of this year’s Budget, it was disappointing to note that no major announcements were made with regards to technology proliferation and promotion in the media or media-tech segments of the country. The Budget was also mostly silent on the communications-oriented service sectors – which also shocked us.
“However, the FM’s announcement on the extension of existing tax benefits for startups by one more year is a welcome move and comes as a big relief for startups that are still bearing the brunt of the ongoing pandemic. I am also happy to note that the incentivization and encouragement for the digital economy continues with this year’s Budget announcements.”
Ambarish Parekh, CXO, Paycraft
The government focus on better infrastructure and technology for Rail & Metro network and seamless experience for users will not only increase the digital footprint, but also the digital penetration
“The budget showcases a strong intent to continue driving a less-cash ecosystem considering the rapid growth in the digital payment sector. The Government has introduced 75 digital banks across 75 districts to promote economical and user friendly payment gateways.
“The government focus on better infrastructure and technology for Rail & Metro network and seamless experience for users will not only increase the digital footprint, but also the digital penetration.”
Arvind Singhatiya, Founder & CEO, LegalKart
The contracts for laying optical fibre in villages including remote areas will be awarded under Bharat net. This will increase the users of digital platforms and thereby, legal services operating digitally will have an indirect as well as a direct impact on its workings
“As per the union budget 2022, there have been no specific inclusions having a direct impact on the legal services but as far as the MSMEs are concerned, the central government has announced many concessions and schemes formulations to enhance the operation of legal services indirectly.
“The contracts for laying optical fibre in villages including remote areas will be awarded under Bharat net. This will increase the users of digital platforms and thereby, legal services operating digitally will have an indirect as well as a direct impact on its workings. Similarly, blending udyam, e-sharam, NCS & Aseem portals will help in enhancing entrepreneurialism and opportunities for small businesses.
“For startups fraternity specifically, the budget was in favour of incentivising funding of the startups. It’s heartening to see the capital gains exemption extended by another year.”
Pankit Desai, Co-founder & CEO, Sequretek
The one-year extension of tax incentives for startups, as well as the launch of the e-stack portal, which encourages a digital ecosystem for skilling and finding relevant jobs and entrepreneurial opportunities, will encourage a stronger entrepreneurial culture in India and position India as the global hub for technological innovation
“Agriculture, healthcare, and digital banking have all received significant boosts in the Budget 2022-23. The one-year extension of tax incentives for startups, as well as the launch of the e-stack portal, which encourages a digital ecosystem for skilling and finding relevant jobs and entrepreneurial opportunities, will encourage a stronger entrepreneurial culture in India and position India as the global hub for technological innovation.
“The FM stated that startups will be encouraged to facilitate drones by developing various applications and providing drones as a service. The allocation of 25% of India’s defence R&D budget to private industry, startups, and academia is a positive step.
“The FM also mentioned formalising cryptocurrency, 30% tax on income from transfer of virtual digital assets, and announcement of a blockchain-based and RBI-backed Central Bank Digital Currency (CBDC). With tech advancement, innovation and widespread adoption of digital payments, the government should also focus on raising awareness and education around the importance of cybersecurity, privacy and data security among businesses and consumers for sustainable growth.”
