1. The government’s focus on fintech, financial inclusion climate action find an early mention in Sitharaman’s prefatory remarks.
  2. The finance minister paints a robust picture of the economy as she starts her speech and adds this budget will lay the ground for the next 25 years.
  3. Sitharaman points to some of the government’s disinvestment success — principally, Air India, the country’s legacy flag carrier
  4. Sitharaman says the budget will provide a sharp increase in public expenditure. The next 25 years, the ‘amrut kaal’, will be futuristic and inclusive, she says.
  5. Public issue of LIC is expected shortly, Sitharaman says.
  6. Sitharaman says the goals in her budget include action on climate and transition to clean energy as part of a national master plan that will also lead to logistics efficiency.
  7. The minister talked of PM GatiShakti announced in October last year. The plan is essentially to dismantle silos within the government for seamless building of infrastructure projects and improving ease of doing business. Infrastructure and logistics will be among key areas of focus. India will expand highways by 25,000 kilometers in the financial year starting April 1, Sitharaman says.
  8. Sitharaman says with an accelerated improvement of health infrastructure in the past two years, India is in a strong position to withstand challenges. But the government’s own data shows that health expenditure as a percentage of GDP has been rather stagnant at around 2%, according to the Economic Survey released this week.
  9. Sitharaman announces a project named ‘Parvat Mala’ — meaning a garland of mountains — that aims at building roads and highways in India’s mountainous region stretching from north to north eastern India, that also borders China.
  10. INCLUSIVE DEVELOPMENT – AGRI – Sitharaman announces a plan that would include private partnership in ensuring farmers get access to new technologies in agriculture.
  11. Drones make an appearance — reinforcing a theme — using technology to address the government’s priorities. Sitharaman announces a plan for boost to “drone as a service”. She calls it ‘Drone Shakti”, meaning the power of drones.
  12. Sitharaman announces interlinking five rivers in central and northern India — a part of controversial two-decade old plan that was criticized for possible ecological hazard by environmental activists.
  13. Emergency credit guarantee for MSMEs is being expanded for the hospitality industry and extended until March 2023. This should help delay any sharp uptick in bad loans in the coming fiscal year.
  14. Digital education in a big way. 200 TV and digital channels to support learning in Indian languages, a digital university and other measures to improve online education, the finance minister says
  15. The finance minister recounts three recently launched plans aimed at welfare of women. They aim at making next 25 year an era of women-led development, she says.
  16. Real estate sector. The budget allots 480 billion rupees for a housing plan, including affordable housing, in urban and rural areas.
  17. Sitharaman also announces large allocations in the budget to drinking water.
  18. Sitharaman proposes to start 400 new “Vande Bharat” trains in three years
  19. The budget proposals so far focus on traditional areas — infrastructure, social welfare.
  20. A national tele-mental health program is being announced by the minister. Mental health issues have been exacerbated across the globe due to the pandemic.
  21. India’s post offices will be brought on core banking system for better financial inclusion, a key target for the Modi government. 150,000 post offices will come into the digital financial transaction systems, making the post office account inter-operable with the rest of the fintech system including banks, says Sitharaman. That’s a move toward financial inclusion.
  22. Financial support for digital ecosystem to continue, Sitharaman says
  23. Sitharaman announces plans for roads and communications connectivity to border villages in the northern part of the country. Northern India shares borders mostly with Pakistan and China, where the country has witnessed some hostile atmosphere in the recent past. Connecting border regions with roads is crucial for India’s military preparedness too
  24. The minister speaks about ease of doing business by integration of state and central government systems through IT bridges, standardization and removal of overlap. Ease of doing business continues to remain a key irritant for investors looking to shift supply chains away from China
  25. ‘Ease of Doing Business 2.O’ will be launched, she says. She reads measures such as single window clearances and online applications for approvals. It may be interesting to mention that the World Bank’s annual ‘Doing Business’ reports that made the term popular is now discontinued after it landed in controversy over the data it used for certain countries.
  26. Sitharaman said chemical-free natural farming will be promoted throughout the country. This is one focus area of the government to improve livelihood of farmers. Zero Budget Natural Farming, as the name implies, is a method of farming where the cost of growing and harvesting plants is zero, as the farmers don’t need to purchase fertilizers and pesticides
  27. India will use clean tech in its bid to improve public transport in urban areas, says Sitharaman. The government will promote use of public transport in urban areas through use of electric vehicles and other such measures, says Sitharaman. This is important given India’s commitment to achieve net-zero by 2070.  The finance minister is proposing a big push to urbanization — and urban rejuvenation — centered on transportation infrastructure such as suburban railway networks, EV charging stations etc. Details will be key.
  28. The government will set up a task force for recognizing potential in the animation, visual effect, gaming sector to open up employment opportunities, says Sitharaman
  29. TELECOM: India will conduct auction of airwaves to ensure telecom operators can launch 5G network by 2023, Sitharaman says. She also announces fund allocation to ensure reach of faster broadband in rural areas.
  30. DEFENCE SECTOR: Sitharaman announces plans to open up research and development in defense sector for private sector. Private industry will be encouraged to take up military equipment designing in collaboration with India’s Defence Research and Development Organisation, an agency under the defense ministry, she says. Majority of the country’s defense budget to be used for buying equipment produced in India, Sitharaman says. Sitharaman proposes earmarking 65% of the sector capex for local companies in the annual budget
  31. Sitharaman announces 195 billion rupees production-linked incentives for solar modules. The production-linked incentives for solar modules follows similar incentives given by the Modi government earlier to sectors such as electronics and textiles to boost local manufacturing and turn India into a factory for the world.
  32. India Proposes INR7.5T on Capital Allocation | +35% – This is pivotal to the government’s aim of fortifying the growth revival as private investment remains weak. This is also crucial because as the promised GST compensation ends in June 2022, the state governments may not have enough fire power to undertake crucial capital expenditure.
  33. India to Introduce Sovereign Green Bonds: Sitharaman – the first such in the country’s history
  34. Sitharaman pegs the effective capital expenditure in the next financial year at 10.6 trillion rupees, that is 4.1% of India’s GDP.
  35. The phrase “crowding-in” makes an appearance in a section on the importance of capex in reviving the economy. Crowding-in, as a phrase, suggests that fiscal spending boosts private investment — as opposed to competing for financing with it.
  36. Sitharaman says public capital spending has to take the lead to ensure that the economy keeps growing. This comes at a time when private capex has been almost in the doldrums with companies preferring to deleverage and repay loans, besides sitting on cash unsure if demand in the economy will keep going given household balance sheets are under pressure with millions of jobs having been sold during the pandemic
  37. DIGITAL RUPEE: Sitharaman proposes to introduce digital rupee using blockchain technology by the central bank in 2022-23
  38. The budget allocates 1 trillion rupees that will assist states “in catalyzing overall investment in the economy,” Sitharaman says
  39. FISCAL MANAGEMENT: India Fy22 Budget Gap 6.9% of GDP vs 6.8% Goal
  40. India Sets FY23 Budget-Deficit Target at 6.4% of GDP

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