Finance Minister Nirmala Sitharaman presented her fourth budget, and second pandemic one, in the national capital February 1 for the upcoming fiscal year. Without any significant shake-ups on the tax front, with slabs remaining static without cuts or hikes, the government sought to push a three-pronged agenda on benefits for farmers, women and the youth.
Further, India is expected to grow at a rate of 9.27 percent buttressed by four pillars of development – inclusive development, productivity enhancement, energy transition and climate action – Sitharaman said. In a bid to incentivise startups, the centre also proposed to extend the tax holiday for new businesses by another year. More highlights here.
Among the budget announcements that have managed to make the most noise is the centre’s decision to regulate digital assets, which includes cryptocurrency. Sitharaman said the profits on digital assets would be taxed 30 percent, falling under the highest tax band in the country. The Reserve Bank of India will also move to introduce a digital currency of its own. This comes following the government’s call last year for banning crypto functions in India.
Kavita Gupta, founding managing partner at Delta Growth Fund, LP and fintech leader based in California, with her extensive blockchain expertise says the Budget’s approach to digital assets does not legitimise cryptocurrency. “We are not defining the sector, technology, currency. What the government is saying is, let’s tax it to the highest bracket available without any coverage of the losses that may come with it…” she tells SheThePeople.
“This is not technology support,” she says, adding that the proposal is reflective of the government wanting in on a finance space that is popular and that it cannot presently control. The first step, she reiterates, should have been for the government to legitimise crypto. Gupta further points out that it would be best if the central bank digital currency (RBI’s digital rupee) uses reliable blockchain technology.
In the long run, the proposal will prove beneficial for the ecosystem, Lakshika Kothari, VP of business strategy at Dfyn Network tells us. “Now people can start companies in crypto, launch tokens, and have much broader adoption. Earlier it was really hard to start a crypto company from India but now it might become much simpler,” she says.
Crypto tax: Govt to regulate, not ban, online currency trading? Experts say, aim for legitimacy
Kothari adds that since women on the trading front like to “avoid things in the grey zone,” with more clarity on digital rupees India may see more gender-equal participation in the field. Gupta is of the opinion that in present circumstances, before crypto-blockchain technologies are legitimised, the Budget proposals have the potential to slash down on all investors and traders.
Travel has remained another hot topic through the pandemic, with the hospitality industry in India taking a sharp hit between 2020 and 2022 given the health crisis. Estimates placed the losses faced by the travel and tourism sector in India to be Rs 15 lakh crore in the first pandemic year. Business pressures induced by COVID-19 reportedly forced 25-30 percent hospitality establishments to shut shop.
Does the Budget bring some relief?
Sitharaman’s announcement of an extension in the Emergency Credit Line Guarantee Scheme (ECLGS) by a year and expansion of the total cover to Rs 5 lakh crore, with a special focus on the hospitality industry, comes as a ray of hope. The government’s boost on infrastructure projects too will give a positive push to travel and tourism, says Pallavi Agarwal, founder and CEO of goSTOPS hostels.
“Our pre-budget understanding showed us that infrastructure and connectivity to various parts should be increased so that more remote sites can be nurtured for travelling. That has been captured in the budget quite well,” Agarwal tells us. “New trains and ropeways are being planned… Greater mobility will ease the youth’s travels.”
On the growth influenced by incentives for youth entrepreneurs and female-led startups, Agarwal says, “When the startup and MSME ecosystem gets more credit line, funding and interest-free loans, it becomes easier for the community to grow at large… They have tried to bring in ease of doing business and improve policies that will encourage young people for startups.”
‘Nari Shakti’ – Push on female leadership and women’s health? Should not be mere lip service
However, similar satisfaction is not mirrored by many commentators watching developments on the front of public health, which has remained centrestage during the pandemic. Dr Shoba Suri, senior fellow at ORF’s Health Initiative tells SheThePeople the Budget “should have laid groundwork for an inclusive and equitable post-COVID recovery.”
“There was a need to focus on ‘Gender Budgeting’ for a multi-sectoral impact on lives of women and girls. Investing in programmes targeting social protection, early child development, education, and water and sanitation to enhance the effectiveness of nutrition-specific interventions, allocation of sufficient funds for women’s health, maternity entitlements and safety — for economic growth,” she says.
Suggested Reading: Union Budget 2022 : Women-Centric Schemes Announced To Boost Nari Shakti
K Sujatha Rao, former union health secretary till 2010 and author of Do We Care? India’s Health System, said the budget was “disappointing” with regard to health and education. “Need to remember that roads and ports don’t make sense if people are illiterate and sick ! And such disdain for these human capability sectors after the trauma we have faced due to a poor health system is simply being irresponsible,” she wrote.
Budget 2022 for women: Does it bring enough benefit?
Sitharaman spotlighted the centre’s Mission Poshan 2.0, Mission Vatsalya and Mission Shakti schemes under the Ministry of Women and Child Development committed to women and children, proposing an integrated revamp “recognising the importance of ‘Nari Shakti’.” Saksham Anganwadis will seek to offer upgraded services and health benefits. But will it go beyond mere lip service in its effectiveness?
“With a similar budget allocated as last year to Saksham Anganwadis and POSHAN 2.0 and poor implementation in schemes leading to decline in beneficiaries, it seems more a token service. The Budget seems to neglect adolescent nutrition even as data indicates poor nutritional status leading to an intergenerational cycle of malnutrition,” Dr Suri says.
“Though Nari Shakti has been recognised, the budget seems to neglect the vulnerable women and girls as against the expectation of transformative opportunity.”