Finance Minister Nirmala Sitharaman has announced a forward-looking budget with a clear focus on bridging the digital divide. Contrary to an expectation that the Central government would be emphasizing on poll-bound States, including Goa, the finance minister steered away from the exigencies of elections and presented a broad roadmap for a "futuristic India" with the spotlight on digitalization.
While there's nothing much to cheer for the salaried class with tax slabs remaining unchanged, there is a consolation with taxpayers allowed to file updated returns within two years in a one-time window.
The biggest surprise however was the announcement that RBI would introduce its digital currency in the form of a digital rupee, a move that is seen by stakeholders as granting legality to private cryptos. On the flip side, there is a rude shock for crypto-currency investors with an introduction of a 30 per cent tax on income from the sale or acquisition of digital assets. Another big move towards digitalization is the introduction of e-passports with embedded chips. The digital banking push with 75 units okayed for 75 districts in commemoration of 75 years of India's independence is a welcome step in taking digital banking to citizens, in addition to the move of making internet banking available across all post offices.
Sitharaman's announcement of spectrum auction for 5G and 100 per cent fiberisation under the PPP model raises new hopes for States like Goa which have been facing network outages and pathetic bandwidth even under the 4G regime. The FM’s initiative of introducing 5G services with fibre optic cabling to villages and remote areas of rural India is big news for Goa which is falling way short in the online world. Let's not forget the horror stories of students wandering across hills and isolated areas in search of networks. While there was a lot of promise when 4G was introduced, the introduction of 5G and the new network plan could usher in a change.
One of the biggest takeaways from the budget is that Capex has been hiked by 35 per cent to Rs 7.50 lakh crore, with Rs 1 lakh crore assistance announced for States. The investment in infrastructure development is the testimony of the government's commitment to boosting economic growth. However, while the government has touched upon Vikas and Vishwas, the budget has failed to deal with one of the greatest issues that India is facing in recent times, i.e unemployment. The target of creating 60 lakh jobs in the next five years is not convincing because it entirely relies on the PM Gati Shakti project to open up more jobs and opportunities. This is against the background that similar logic has failed in the previous years despite the considerable hikes in capital expenditure. Last year was no exception.
Infrastructure development does not provide direct solutions to unemployment. The government should have had a concrete plan on job creation, instead of resting its case on the development plan. Surprisingly, the rural employment budget has been slashed by 25 per cent, even though there are over 2.7 crore households seeking jobs, a figure which has seen a jump from 2.4 crore households in the previous financial year.
There is still a lot of clarity needed in the finer detailing of the budget. On the outside, the second budget during the pandemic has set the groundwork for India to take a giant leap in the digital world. However, the devil is in the details, and it is to be seen how the fine-print unfolds.
