Budget 2022 is a huge leap towards digital transformation and finance

Providing structural and policy support to the fintech industry will add more people to the formal economy

With the unveiling of Budget 2022, a number of industries are smiling. The education sector, MSMEs, start-ups and fintech sectors were the main beneficiaries of this budget. A budget with a short-term recovery and long-term growth outlook was expected as the economy slowly returned to the path of revival, leaving behind the dark memories of Covid-19. The budget did not disappoint. The budget, introduced by social, digital and financial inclusion, connects points to meet both short-term and long-term needs.

This budget pushes towards the digital economy, it would not be an exaggeration to say so. With the establishment of 75 digital banks, banking services will reach the doorsteps of millions of people. The more people participate in the formal economy, the faster it is bound to expand. This will be extremely beneficial for the digital lending sector. The introduction of digital currency will further accelerate migration towards the digital economy. Many also see the introduction of virtual assets under the taxation system as a gradual change in the government’s attitude towards legalizing cryptocurrencies.

The announcement of a tax incentive for start-ups by March 2023 is a key step forward for the start-up ecosystem. Start-ups have driven growth over the past few years, employing thousands of people and launching a new line of solution-driven businesses. The move will encourage more start-ups to improve and become important 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 increasing capital access to small and medium enterprises, the announcement will help them become more competitive and recover faster from the Covid-19 shock. Extending the 15 per cent rebate tax rate for new manufacturing units for another year would have far-reaching positive effects on the country’s manufacturing sector. Promoting drone service will open new avenues for start-ups. It will encourage new research and development and innovation in the sector.

Digital education has been another focus of government for several years. This year too, various provisions for online education have been included in the budget. Establishing a digital university is a landmark step. The government has also announced to expand the program of 1 Class 1 channel to 200 TV channels. The program will also feature regional language learning. The Digital Education 5G auction and the Optical Fiber Network project will greatly benefit from BharatNet. The country-stack e-portal will help build skilled professionals to continuously feed India’s growing resources with talent. The Vibrant Village program will increase Doordarshan’s penetration in rural areas and further contribute to digital education. The great education divide that exists in the country has intensified during the epidemic and some corrections are needed to deal with both short-term and long-term responses. The intent with which this year’s budget has been formulated reflects social inclusion.

Financial inclusion and sustainable growth were the guiding principles of Budget 2022. With the right intervention in the right place, almost all the relevant problems facing the economy in the budget have been solved. Providing structural and policy support to the fintech industry will involve many more people in the formal economy. Digital education and skills development will continue to fill the country’s talent pool and the shortage of skilled manpower will never hinder the growth and sustainability of the country’s industry. The Fintech sector will make full use of the various initiatives taken and the incentives provided in the budget and will soon be the flag bearer of the transformation of the country into a digital economy.

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