Here's Why I Think the Union Budget 2017 is a Runaway Hit! With large number of announcements in the Budget to push the digital economy of India by boosting the government's Digital India project and increasing incentives for digital payments, we're looking at some major overhaul when it comes to digitization.
By Dr. Somdutta Singh •
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Finance Minister Arun Jaitley yesterday delivered his 4th and being stated his most crucial Union Budget. Here are some of the highlights that need a special mention and why they are significant.
With Rs 27,000 crore that will be spend on Pradhan Mantri Gram Sadak Yojana and one crore houses that will be completed by 2019 for the poor, we're looking at a major boost to man's necessity of the "roti, kapda aur makaan' adage. While roti and kapda are taxed negligibly, heavy taxes are levied on real estate. With free housing for the homeless and ramping up spending on rural areas, infrastructure and thus fighting poverty, we'll progressively see better advancements in job sectors, education, better career opportunities and the maximum push to digitization. Also, by granting infrastructure status to affordable housing, the measure will reduce costs for developers and attract investors.
Infrastructure has witnessed Rs 3,96,135 crore investments; increase of 79% from FY '17. This will lead to much higher foreign investments which in turn will provide an enormous shove to the startup sector where majority of funding come from venture capital funds that rely heavily on foreign investments. Commerce Minister Nirmala Sitharaman has strongly taken her stand by saying that this budget will help startups because it has responded to what the people have been asking for.
Allocation under MGNREGA increased to a whopping INR 48000 crore from INR 38,500 crore will open up avenues for jobs and job creation as well. Moreover, small firms with turnover of up to Rs 50 crore will now have to pay 25% tax, instead of the previous 30%. Around 67 lakh companies fall within this category. Tier II and Tier III cities are crucial markets to crack for most small businesses. The slashing of taxes and improved infrastructure facilities will help businesses to deliver effortlessly. As PM Modi has put it, this Budget will help small businesses to become competitive in the global market.
Jaitley added that India is being seen as an engine of global growth and a bright spot amidst world economic gloom. With the Budget announcing creation of a Dairy Infrastructure Development Fund of Rs 8000 crore over the next three years, it will create additional rural income and have a multiplier effect on the rural economy. Jaitley further added that their focus will be to energize the youth to reap benefits of growth and employment.
Push to Digital Economy
With large number of announcements in the Budget to push the digital economy of India by boosting the government's Digital India project and increasing incentives for digital payments, we're looking at some major overhaul when it comes to digitization. First up, the government announced allocation of up to Rs 10,000 crore in the Bharat Net project under which high speed broadband on optical fibre will be available in more than 1.5 lakh gram panchayats with hotspots and access to digital services at low tariff. A "Digi Gaon' initiative will also be launched to provide telemedicine, education and skills through digital technology. these moves will give a major fillip to mobilizing broadband and Digital India for the benefit of people living in rural areas.
"India is at the cusp of a massive digital transformation and digital transformation is a crucial pillar to transform, energise and clean (TEC) India," said Jaitley as he listed "Digital' as one of the 10 key themes this budget. The BHIM app (Bharat Interface for Money) already has 125 lakh people using it and the budget made mention of merchants using the payments app being incentivized like getting additional cash-backs. All these steps taken are a huge reinforcement to the path toward a cashless economy, the sole goal of the notorious demonetization move. All these steps will get garner, to the tune of Rs 2,500 crore through digital transactions across platforms including the united payment interface (UPI).
Boost to the education sector
A proposition has been made to exempt excise duty on various point of sale (POS) machines and iris readers to encourage digital payments. In a bid to bridge the digital divide through online education, the Swayam platform, developed by the ministry of human resource development and All India Council for Technical Education with the help of Microsoft Corp. will start offering 350 online courses hosting 2,000 courses and 80,000 hours of learning covering school, under-graduate, post-graduate, engineering, law and other professional courses. This will give a gigantic thrust to the education sector that lags behind.
When it comes to technology, the segment has always been the government's fulcrum for growth in the last two years. In this budget, Jaitley mentioned how technology will be used across sectors—be it to increase tax compliance and accountability with the help of data analytics, increase digital literacy, strengthen rural markets, improve agriculture, modernize ports and airports or to store digital documents.
Overall, I'm happy with this budget and what it's promised to hold in store for us.
