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Budget gives renewed thrust to new-age businesses for $5 tn economy

Sensing immense opportunities in new-age businesses, startups, and local manufacturing amid the pandemic-induced digital transformation, the government on Tuesday outlined a tech-driven Union Budget to fast-track the goal of achieving a $5 trillion economy by 2025.

From cracking down on private cryptocurrencies along with a soon-to-be-launched digital rupee by the RBI to announcing a 5G spectrum auction this year and more allocations under the PLI scheme, the government went ballistic on its digital-driven ‘Atmanirbhar Bharat’ agenda.

In a significant move to bring cryptocurrencies and non-fungible tokens (NFTs) under a tax net, Finance Minister Nirmala Sitharaman announced a 30 percent tax on any income from the transfer of virtual digital assets, specifying that no deductions and exemptions will be allowed.

There will also be a 1 percent tax deducted at source (TDS) on the payments made for the transfer of digital assets.

The government also announced to bring India’s own digital currency by the RBI next year that will be based on Blockchain technology, while the much-expected Cryptocurrency Bill is yet to see the light of the day.

“Digital rupee to be issued using Blockchain and other technologies by the RBI starting 2022-23. This will give a big boost to the economy,” said Sitharaman in her Union Budget 2022-23 speech in Parliament.

The Reserve Bank of India (RBI) has already been deliberating upon various aspects relating to the central bank digital currency and private cryptocurrencies.

Already late on riding the global 5G bandwagon, the government said it will soon launch a scheme for design-led manufacturing to build a strong ecosystem for 5G in the country. Part of the Production Linked Incentive (PLI) scheme, it will enable growth and offer job opportunities, said Sitharaman.

“A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme,” she said during her Union Budget 2022-23 speech in Parliament.

“Required spectrum auction will be conducted in 2022 to facilitate the rollout of 5G mobile services within 2022-23 by private telecom providers,” she added.

The Finance Minister said 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 fiber 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 the optical fiber,” Sitharaman added.

To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for the Production Linked Incentive (PLI) for the manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.

The Finance Minister said that the PLI scheme across 14 sectors, including IT hardware manufacturing, has the potential to generate at least 60 lakh new job opportunities.

“The Production Linked Incentive (PLI) scheme for achieving Aatmanirbhar Bharat has received an excellent response, with potential to create 60 lakh new jobs,” she said.

The PLI schemes may invite additional production of Rs 30 lakh crore during the next five years, the finance minister added.

In order to ensure seamless 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. Open-source mobility stack, for organizing seamless travel of passengers will also be facilitated,” said Sitharaman.

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