Historic day for the Indian Digital journey: Union Budget 2022-23

The budget highlights the Governments' focus on digital inclusion and technology led provisioning of services to vulnerable sections. The budget shows the government wants RBI to promote digital currency, central Bank digital currency (CBDC) and kill all other currencies, just like China is doing. The government said RBI will launch digital rupee and announced a 30% tax on income from transfer of virtual digital assets. This is a very positive aspect. This is a progressive move that will give a big boost to India's digital economy. We believe digital literacy will be the key to realizing India's 5 trillion-dollar economy dream.

To create a digital ecosystem for skilling and focus on digital inclusion through 5G and investment in technologies such as Artificial Intelligence and infrastructure, the government will continue strengthening the development of entrepreneurship, productivity, and quality of IT talent in the country, thereby scaling the adoption of new-age technologies across industries. Budget proposes to extend the existing tax benefits for startups by 1 more year – a promising and welcome move that will support the startup ecosystem in the country. The government’s funding support to sunrise sectors such as climate action, deep tech, digital economy and Agri tech is also welcoming.

Secondly, the Government has made a strong economic statement with its focus on public investments to spur growth. Forward looking and catering to an aspirational Digital India the budget once again lays its emphasis on technology with the launch of Digital Currency using blockchain, Digital University for education in different Indian languages, roll out of 5G and boost to Start-ups.

At the same time, the government looks unlikely to offer any major relief measures to struggling consumers, focusing instead on beefing up spending on transport and healthcare networks, which analysts estimate could rise between 12% and 25% in the next fiscal year. The budget brings a relief to the investors invested into Crypto. It was a big day for the whole crypto industry and sends a positive signal about building in India. For the first time ever, the Indian government has passed regulatory guidelines for cryptocurrencies and this is a huge step forward for the industry. It has been recognised as the asset class of the future, with more than 20 million Indians adding it to their financial portfolio in 2021.

The global technology shift towards the metaverse, Web 3.0, NFTs and many more innovations powered by blockchain is clear proof that crypto is well and truly on the rise. The regulatory guidance on tax from the government furthers the mainstreaming of this emerging asset class with over $6 bn worth of investments in India. Finally, the government's decision to introduce RBI’s own Central Bank Digital Currency (CBDC) to accelerate digitization is also welcomed.

S Mohini Ratna, Editor, VARINDIA