Union Budget 2022-23 Brief: Tech-Led Transformation for India
Hon’ble Finance Minister, Nirmala Sitharaman in her Budget 2022-23 speech declared that India would report an economic growth of 9.5%, which would be the highest among all economies. This year’s budget is laying foundation for the beginning of 25 years to India’s 100 years of Independence in 2047, termed as Amritkaal. Goals during Amritkaal include:
- Complimenting macro-economic growth focus with microeconomic
- Promoting digital economy and fintech
- Tech enabled development
- Energy transition
- Climate action
- Relying on virtuous cycle on private investment with public cap investment
The budget is based on 4 pillars of development, namely:
- PM Gati Shakti
- Inclusive development, productivity enhancement and investment
- Sunrise opportunities, energy transition and climate action
- Financing of investments
The highlight for the Geospatial industry was the acknowledgement by the Hon’ble Finance Minister on the role of AI, Geospatial, Drones, Space Economy amongst others for achieving Sustainable Development and modernize our economy.
1. PM-Gati Shakti
PM Gati Shakti National Master Plan for Multi-Modal Connectivity was launched in October 2021 aimed at coordinated planning and execution of infrastructure projects. It is a digital platform bringing development projects of 16 ministries, including railways and roadways, petroleum and gas, power, telecom, shipping and aviation, together for integrated planning and implementation.
The modes of transport include ‘7 engines of growth’, namely roads, railways, ports, airports, mass transport, waterways and logistics infrastructure. Each ministry and department will be able to access information about ongoing and upcoming projects to ensure a balanced and synchronized approach in planning and building infrastructure.
Benefits of the scheme include reduced logistics costs, speedier implementation of development projects through technology, faster movement of people and goods, availability of real-time information, increased international competitiveness and seamless travel for passengers and goods. It will also result in unshackling bureaucratic entanglements and end inter-ministerial silos that delay infrastructure projects and drive-up costs.
- PM Gati Shakti received an allocation of Rs. 20,000 crore in the budget.
- The project will expand the national highway network by 25,000 km in 2022-23.
- PM Gati Shakti Master Plan for Expressway will be formulated in the financial year 2022-23 to facilitate faster movement of people and goods.
- The civil aviation ministry is expected to double the aviation footprint to 220 airports, heliports, and water aerodromes by 2024-25.
- Construction of pipelines, pumping up power transmission and boosting medium and small sector enterprises are also part of this plan.
- Data exchange among all mode operators to be brought in on unified logistics interface platform to enable efficient movement of goods
- One Station One Product to enhance the future opportunities for local businesses and supply chain ecosystem
- 100 PM Gati Shakti Cargo terminals to be developed during next 3 years and implementation of innovative ways for building metro systems
- 2,000 km of rail network to be brought under the indigenous world-class technology KAWACH, for safety and capacity augmentation
- Contracts for the implementation of Multimodal Logistics Parks at four locations through PPP (Public-Private Partnerships) Mode will be awarded in 2022-23
- 60 Km of ropeway project under Parvat Mala scheme for national roadways development will be launched aimed at improving connectivity in a PPP mode for building ecologically sustainable roads in hilly areas.
2. Inclusive development, productivity enhancement and investment
Inclusive development and productivity enhancement requires the introduction of economically and environmentally sustainable practices through long-term solutions pillared on a digital transformation. Such a roadmap is bound to be tied to technological interventions, integrated by Geospatial solutions.
- Schemes in PPP mode to be introduced for delivery of digital and hi-tech services to farmers, with involvement of public sector research and private agri-tech, along with extension institutions and stakeholders of agri value chains
- Use of Kisan Drones for crop assessments, digitization of land records, spraying of insecticides and nutrients is expected to drive a new wave of technology in agriculture and farming sector.
- Digitization of land records to be expedited to bring more transparency in the agriculture sector.
- Funds with blended capital under co-investment models will be facilitated through NABARD to finance startups for agricultural and rural enterprises relevant for farm produce value chains; startups will be encouraged to support FPOs and farmers through technology, including IT-based support
- Ken-Betwa Link Project announced; to be undertaken at a cost of INR 44,605 crores and set to benefit 9,00,000 farmers. Draft DPRs for five river link project also finalized.
- Agricultural university syllabi to be revised to accommodate awareness about natural, zero-budget, organic and modern-day farming technologies.
- Live organic databased to be hosted on Udyam, e-Shram, NCS and Aseem portals, which will now be interlinked, and their scope expanded. B2B, B2C and G2C services focusing on enhancing entrepreneurial services, credit facilitation, skilling and recruitment to be provided.
- Skilling programs and more partnerships with the industry will be encouraged to boost sustainability and employability.
- National Skills Qualifications Framework to be aligned with the dynamic needs of industries.
- DESH Stack e-portal announced with skilling, reskilling and upskilling objectives in mind. The portal is to provide API-based trusted skill credentials, payment and discovery layers to help find relevant jobs and entrepreneurial opportunities.
- Drone Shakti project to be promoted to facilitate application and use of Drones as a Service, with an aim to push startups into the ecosystem.
- An open platform for the National Health Ecosystem will be rolled out, consisting of digital registries of health providers and health facilities, unique health identities, consent framework, and universal access to health facilities.
Development and Utilities
- Rs 60,000 crore has been allocated to the Har Ghar Jal Scheme. Under the scheme, 3.8 crore households will be covered in 2022-23.
- 80 lakh affordable houses will be completed at Rs 48,000 cr under PM Awas Yojna in 2022-23. Objective is to reduce time requirement for approvals, expand access, and reduce costs through efficient administration.
- PM-Development Initiative for the North-East (PM-DevINE) scheme announced to fund infrastructure projects – PM Gati Shakti and social development – in the region with an outlay of Rs. 1500 crore.
- Vibrant Villages Programme announced that will aim to develop villages through greater infrastructure, tourism support, road connectivity, renewable energy, and livelihood generation for villages having limited connectivity in the northern border.
- While 95% of the 112 Aspirational Districts have shown progress, in 2022-23, focus will be to assist the remaining 5% blocks to achieve the milestones.
Ease of Doing Business
- Ease of Doing Business 2.0 will be launched in 2022-23, which will build on the lowered compliances and trust-based governance to improve productive efficiency of capital and human resources. This new phase will be guided by an active involvement of the states, digitization of manual processes and interventions, integration of the central and state-level systems through IT bridges, a single point access for all citizen-centric services, standardization and removal of overlapping compliances, and traceability for processes. It is to be noted that in recent years, over 25,000 compliances were reduced, and 1,486 Union laws were repealed.
- A single-window portal for all green clearances – PARIVESH was launched in 2018. The scope of PARIVESH will be expanded to provide information to applicants. Based on location of units, information about specific approvals will be provided.
- A high-level committee of urban planners, economists and institutions will be formed to make recommendations for urban sector to meet the needs of growing urban expansion.
- Modernization of Building by-laws, Town Planning Schemes, Transit Oriented Development will be implemented to enable people to live and work closer to mass transit systems. Financial support for mass transit projects and AMRUT scheme will be leveraged for formulation of action plans and their implementation.
- Five Centres of Excellence (CoE) will be established for developing India-specific knowledge in urban planning and design with endowment of Rs. 250 crore each.
- AICTE will take the lead to improve syllabi of Urban Planning courses in other institutions aligned to the industry needs.
- States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT based management of records. Adoption of National Generic Document Registration System (NGDRS) with One Nation One Registration Software will be promoted for uniform system of registration and ‘anywhere’ registration of deeds and documents.
- Complete paperless, end-to-end online e-Billing System will be launched for use by all ministries. Suppliers and contractors would be able to submit their digitally signed bills online and claim and track status from anywhere. Further, surety bonds as substitutes for bank guarantee will be acceptable.
- Auctions for 5G spectrum will take place in 2022-23. A scheme for design-led manufacturing will be launched to build a strong ecosystem of 5G.
- 5% of Universal Service Obligation Fund has been allocated for broadband and mobile proliferation in rural areas.
- Optical fibers to be installed in all villages under the BharatPe project in PPP mode for facilitating communication and e-services; expected to be completed by 2025.
- 68% of capital procurement earmarked for domestic industry in 2022-23, up from 58% in 2021-22.
- Defence R&D opened for startups.
- Private sector and academia encouraged to take up military platform development through SPV model with DRDO.
- Supportive policies and light touch regulations will facilitate further growth in Artificial Intelligence, Geospatial systems, Drones, Green Energy, Space Imaging, Clean Mobility sectors. Enhanced collaboration between Industry, Government and Academia needed.
3. Sunrise opportunities, energy transition and climate action
Circular Economy Transition
- Action plan for 10 sectors is ready, including e-waste, toxic and hazardous waste, etc. need to integrate cost-cutting infrastructure with technology through active public policy, suitable frameworks and innovation facilities.
4. Financing of investments
Overall Public investment and deficit
- Public investment to be leveraged to draw private investment. Outlay for capital expenditure thus stepped up sharply by 35.4% from 5.54 lakh crores last financial year to 7.50 lakh crores currently, at 2.9% of the GDP.
- Financial viability of projects to be enhanced through PPP models, with the private industry offering technological assistance, innovative best practices, and risk management.
- Data centres and clean energy storage systems included in harmonized list of infrastructure; credit availability eased for the same
Funding for Sunrise sectors
- Blended finance models to be introduced for sunrise sectors like climate, deep tech, digital economy, farmer and agri technology. To be managed by private fund managers; government will provide 20% of the funds.
Central Bank Digital Currency
- RBI to introduce digital rupee using blockchain and integrated technologies, offering a more efficient and cheaper currency management system.
Financial Assistance to States
- States to be provided with financial assistance for capital investments targeted towards creation of productive assets and remunerating employments. Outlay for 2021-22 was revised from Rs. 10,000 crores to Rs. 15,000 crores. Allocation for 2022-23 increased to Rs. 1 lakh crore.
- 50-year interest-free bonds for States over and above normal borrowings allocated for PM Gati Shakti related and other productive capital investments.
- Supplemental investments for PM Gram Sadak Yojana, completion of OFC network and digital payments, Transit Oriented Development, Town Planning Schemes, Transferable Development Rights.