Budget 2022: A Giant Leap Towards Digital Transformation And Financial Inclusiveness

Providing structural and policy support to the fintech industry will include a lot more people in the formal economy

As the budget 2022 unfolded, the smiles on the faces of several industries broadened. The education sector, MSMEs, start-ups, and the fintech sector were some of the key gainers in this budget. As the economy gradually returns to the path of revival, leaving the dark memories of Covid-19 behind, a budget with a vision for recovery in the short term and growth in the long run, was expected. The budget did not disappoint. Ushered by the Social, Digital and Financial inclusiveness the budget has connected the dots to address both short-term and long-term requirements.

It would not be an overstatement to say that this budget gives a strong push towards the digital economy. The establishment of 75 digital banks will take banking to the doorsteps of millions of underbanked people. As more people will participate in the formal economy, it is bound to expand rapidly. This will be extremely beneficial to the digital lending sector. The launch of digital currency will further expedite the migration towards the digital economy. Bringing virtual assets under the taxation regime is also being seen by many as the gradual shift in the government’s attitude towards legalising cryptocurrency. 

The announcement of tax incentives for start-ups to be established by March 2023 is the key takeaway for the start-up ecosystem. Start-ups have driven growth, provided employment to thousands of people, and started a new line of solutions-driven businesses in the past several years. This move will encourage more start-ups to flourish and become significant contributors to the economy. The extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 is another encouraging sign for the MSME sector. By enhancing the capital access to the small and medium enterprises, this announcement will help them become more competitive and recover faster from the Covid-19 shock. The extension of the concessional tax rate of 15 percent for the new manufacturing units by one more year will have far-reaching positive implications on the manufacturing sector of the country. The promotion of drone-as-a-service will open new avenues for start-ups. This will also encourage new R&D and innovations in the sector. 

Digital education has been another one of the focus areas of the government for several years now. This year too, the budget includes various provisions for online education. The establishment of a digital university is a landmark step. The government also announced the expansion of the 1 class 1 channel program to 200 TV channels. This program will also feature learning in regional languages. Digital education will benefit greatly from the 5G auction and the optical fibre network project Bharatnet. The Desh-Stack e-portal will be instrumental in creating skilled professionals to keep the ever-growing India incorporation continuously fed with talent. The Vibrant Villages program will increase the penetration of Doordarshan in rural areas and further aid in digital learning. The Great Education Divide which exists in the country aggravated during the Pandemic and required some corrections to combat both short term and long-term repercussions. The intent with which this year's budget is devised manifests social inclusiveness.

Financial inclusion and sustainable growth were the guiding principles of the budget 2022. With the right intervention at the right places, the budget has addressed almost all the relevant issues faced by the economy. Providing structural and policy support to the fintech industry will include a lot more people in the formal economy. Digital education and skill development will continuously replenish the talent pool of the country and never let the shortage of skilled personnel hamper the growth and sustenance of industries in the country. The Fintech sector will make full use of various initiatives taken and incentives provided in the budget and will be the flag bearer of the nation’s transformation to a digital economy sooner than anticipated. 

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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