A 35 per cent increase in capital expenditure of Rs 7.5 lakh crore per government project is expected to have a keyxin effect on employment and income growth in the coming years.
Budget outreach and coverage is very wide. The finance minister has followed a progressive and reformist approach, focusing on ‘all efforts’, pro-infra and pro-growth, a digital currency is expected to give new wings to the Indian economy for the future. Against the backdrop of a strong macroeconomy, the Union Budget 2022 has been tabled to create a new India. Promoting New India through infrastructure, jobs, connectivity, healthcare and digitization. In addition, this budget has given wings to India by focusing on agriculture, business and social sectors, transport and energy.
National master plan aimed at combining the seven engines of roads, railways, airports, ports, public transport, waterways, logistical infrastructure, excellent modern infrastructure and logistics. It will also encourage intermodal transport and interconnection of rivers. It is expected that there will be time gap in investment in infrastructure for further growth in income and employment. In the budget, 400 new Bharat trains have been announced and 100 new cargo terminals have been announced for infrastructure development. Four multi-model logistics parks will be provided through PPP mode. Integration of postal and railway networks to facilitate parcel movement.
A 35 per cent increase in capital expenditure of Rs 7.5 lakh crore per government project is expected to have a keyxin effect on employment and income growth in the coming years. This is also expected to lead to huge growth. The budget has set a target of 9.2 percent economic growth for the current fiscal year, one of the highest economic growth targets in recent years. The increase in tax revenue in the current financial year is expected to be Tk 3-4 lakh crore more than last year.
A digital university will be set up soon in the field of digitalisation. PM e-Vidya will be aired on 200 TV channels. We need to strengthen digital payments and digital banking. Focus on digital payment apps and digital platforms for healthcare. India will launch digital rupee through blockchain. The RBI will launch it soon. Thus, India will have its own digital currency. The budget also focuses on the creation of 75 digital baking units in 75 districts of India by nationalized banks. 1.5 lakh post offices will be connected to the bank. The government will auction 5G spectrum this year.
Providing digital and high-tech services to farmers in PPP mode, launching funds with mixed capital to finance agricultural startups. Digitization of land records drones will be deployed for agricultural monitoring. Digital education to integrate rural areas and digital ecosystems for startups and livelihoods. Digital asset tax has been imposed at 30 percent. Gifts for virtual digital assets will be taxed at 30 percent and digital asset transfers will be taxed. The Tele Mental Health Project will be launched for the National Digital Platform for Quality Counseling and Health Services.
The introduction of cryptocurrency is expected to streamline money market management. So, with the addition of crypto, the macroeconomic equation of the money market fisher will change. This will give economists more legroom to analyze the new equations of the money market to see the impact on the macro-economy. 30 percent tax on cryptocurrency is subject to speculative activity control.
Digitization systems reflect the huge announcements made to promote digitalisation. Digitization has several important effects – due to the introduction of a digital currency by the RBI, it will attract investment and has a greater impact on the Indian currency market which will lead to changes in overall money supply, interest rates and inflation. Digitization will also be expected to reduce the overall transaction cost in the economy to improve the ease of doing business proven in the transaction cost economy.
Despite all the hurdles caused by the global epidemic, India’s BoP has surplus in the last two years. This has helped the RBI to raise foreign exchange reserves, which stood at $ 634 billion as on 31st December 2021. This is equivalent to 13.2 months of imports and more than the country’s external debt, according to the Economic Survey, 2022. India was the fourth largest foreign exchange reserve holder after China, Japan and Switzerland. This leads to improvement in external weakness indicators such as foreign exchange reserves in total foreign debt, short-term debt in foreign exchange reserves.
According to experts, the gray areas of the budget are 28 per cent reduction in fertilizer subsidy, 25 per cent reduction in food subsidy and 11 per cent reduction in petroleum subsidy and 0.8 per cent reduction in health expenditure. Since the epidemic is not over yet, declining health spending could be a cause for concern.
Thus, the Indian economy is on a strong backdrop of macroeconomic stability and this budget is expected to lay new wings to usher in a ‘new India’; Prime Minister Modi’s philosophy as the creator of modern India.