Union Budget 2022: A New Hope For The Nation
The Union Budget for 2022-23 has announced several measures for the micro, small and medium enterprises (MSMEs) sector that included an extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023.ECLGS is a much-needed initiative that provides additional incentives to 130 lakh MSMEs and has immense scope to drive demand for warehousing and logistic sectors
With the introduction of new reforms in the annual Union Budget 2022-23, it is estimated that the nation is set to grow at a magnificent rate of 9.27 percent this year. A growth-focused budget was presented by the Finance Minister of India, Nirmala Sitharaman that aims to improve the economy despite growing inflationary pressure and the rise of Covid-19 infections. The budget emphasized a focus on Atma Nirbhar Bharat with strong impetus on four pillars of development- PM Gati Shakti Plan, productivity enhancement, climate action, and financing investments. Extending a helping hand to different sectors, the stakeholders have willingly welcomed the host of announcements by Nirmala Sitharaman, Finance Minister of India to ensure a robust economy. Here are some of the key highlights of the budget that are a must-read.
Enhancing mobility through PM Gati Shakti Plan
Presenting the budget, the PM Gati Shakti master plan is a 100-lakh crore transformative approach, driven by seven engines namely roads, railways, ports, airports, mass transport, waterways, and logistics infrastructure. The government is planning to expand the National Highway network by 25,000 kms in 2022-23 with an aim to bring synergy between the infrastructure and logistics sector. In order to build a holistic infrastructure in India and integrate the economy in unison, the plan is programmed to set apart a strong network of multi-modal transport system for commuters as well as logistics and exports of goods and domestic manufacturing.
Affordable Housing gets a budget boost
Under the Pradhan Mantri Awas Yojana scheme, allocation of Rs 48,000 crore was announced by the finance minister that will give a major boost to the affordable housing segment and drive growth in the real estate sector. Around 60,000 houses will be identified as beneficiaries and 80 lakh houses for the identified beneficiaries under the affordable housing scheme are expected to be completed by 2023 across the country which will strengthen confidence among homebuyers and developers. Furthermore, 60,000 crores will be allocated to the Nal Se Jal scheme for providing access to clean water to 3.8 crore households. The government aims to form a high-level committee consisting of urban planners and economists to continue working on urban capacity building, implementation, etc.
Blossoming Green Bonds
A new and promising type of investment mechanism, 'Green bonds' will be a strong way forward to fund 'green infrastructure and reduce carbon footprint. The government can fund climate change and
ecological-centered projects, support financing of sustainable energy initiatives with the issue of sovereign green bonds.
Digital India is the way forward
The government’s decision to launch digital currency was welcomed by the financial experts and stakeholders of the industry promoting a digital economy. Starting in 2022-23, the Reserve Bank of India will issue a new digital currency based on blockchain technology. In addition, the digital currency will result in a more efficient and cost-effective currency management system and prohibit all private cryptocurrencies in India. Due to a significant rise in mental health cases caused by Covid-19, a national tele mental health programme that includes a network of 23 tele mental health centers of excellence has been planned to ensure quality mental health care and counseling services.
Upskilling the youth of the country
The announcement of new policies in the union budget is all set to create more employment opportunities for the common people. A digital ecosystem for skilling & livelihood (DESL) portal in Budget 2022 is a significant measure to upskill the youth of the nation through online training and help them find relevant jobs. A strong focus on urban development will generate employment in the urban cities and empower young minds. With the increase in employment opportunities, the spending capacity of households will increase, thus leading to a surge in the housing market and enhancing the overall economy.
Revitalising the Micro, Small and Medium Enterprises
The Union Budget for 2022-23 has announced several measures for the micro, small and medium enterprises (MSMEs) sector that included an extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023.ECLGS is a much-needed initiative that provides additional incentives to 130 lakh MSMEs and has immense scope to drive demand for warehousing and logistic sectors. Considering these aspects, the government declared the extension of guarantee cover by another ₹50,000 crores taking the total cover under the scheme to ₹5 lakh crore, with the additional amount being earmarked exclusively for hospitality and related enterprises.
Missed Opportunities for the Real Estate Sector
Employing about seven million people, the real estate sector contributes 6-7% to the country’s GDP and is expected to reach 10% by 2030. The year 2021-22 was meant to be a year of recovery for the Indian Real Estate sector but all hopes were foiled as the nation was hit by a subsequent wave of Covid-19 pandemic. In 2022, the stakeholders of the real estate industry expected the introduction of new reforms but were further disappointed as the budget failed to address most of the expectations of the sector. While it was anticipated that there would be a relief in home loan tax, to everyone’s dismay, no specific announcement was made to uplift the ailing sector.
The progressive budget lays a strong foundation for a digitized nation and provides a blueprint to steer the economy from India at 75 to India at 100. Generating a ray of hope for the citizens of the country, the Union Budget is a bold step in the direction of making India the world's fastest-growing major economy.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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