Union Budget 2022-23: Broadbanding India through infrastructure & applications

Focus on broadband infrastructure through the 5G and BharatNet project and applications like digital health, digital education, digital money and Drone-As-A-Service gets prominence

This Budget seeks to lay the foundation and give a blueprint to steer the economy over the Amrit Kaal of the next 25 years – from India at 75 to India at 100 said Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman while presenting the Union Budget 2022-23 in Parliament today.

The Finance Minister announced four priorities which includes: PM GatiShakti; Inclusive Development, Productivity enhancement & investment, Sunrise opportunities; Energy transition and Climate action; and financing of investments.

On the ICT front, the Budget focuses on pushing broadbanding India through infrastructure & applications which will give a big boost to both urban and rural economies. Let’s look at the Budget and its implication to the ICT industry.

Broadbanding India
The Union Budget 2022-23 has proposed to launch a scheme for design-led manufacturing to build a strong ecosystem for 5G as part of the Production Linked Incentive (PLI) Scheme.

Nirmala Sitharaman highlighted that telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities. Required spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within 2022- 23 by private telecom providers.

Further, in order to enable affordable broadband and mobile service proliferation in rural and remote areas, the Budget has proposed to allocate five per cent of annual collections under the Universal Service Obligation Fund (USOF). This will promote R&D and commercialization of technologies and solutions.

To bring access to e-services, communication facilities, and digital resources in all villages in par with the access of same in urban areas, the Union Budget has announced that the contracts for laying optical fibre in all villages, including remote areas, will be awarded under the Bharatnet project through PPP in 2022-23. Completion is expected in 2025. Measures will be taken to enable better and more efficient use of the optical fibre. Unique Land Parcel Identification Number for IT-based management of land records.

Digital Schemes in Health
Technology has taken a centre-stage for the health Sector in the Union Budget as two new digital schemes – National Digital Health Ecosystem and National Tele Mental Health Programme have been announced. National Digital Health Ecosystem will comprehensively consist of digital registries of health providers and health facilities, unique health identity, consent framework, and shall provide universal access to health facilities whereas National Tele Mental Health Programme will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre. The International Institute of Information Technology Bangalore (IIITB) will provide technology support.

Issuance of e-Passports using embedded chip
The Finance Minister announced that the issuance of e-Passports using embedded chip and futuristic Technology will be rolled out in 2022-23. This will further enhance the convenience for citizens in their overseas travel.

Introduction of Digital Rupee
Nirmala Sitharaman announced the introduction of Digital Rupee to be issued by the Reserve Bank of India starting 2022-23.
The Finance Minister said that the Central Bank Digital Currency (CBDC) will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system and will use blockchain and other technologies.

Taking forward this agenda, and to mark 75 years of our independence, the Finance Minister announced that it is proposed to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.

CBS in all Post Offices by 2022
In another important announcement, the Finance Minister said that in 2022, 100 per cent of 1.5 lakh post offices will come under the Core Banking System (CBS) enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts. This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability, and financial inclusion.

Extension of Start-ups Eligibility Criteria
Start-ups have emerged as drivers of growth for the economy so in order to assist them during the COVID-19 pandemic, the Finance Minister has proposed to extend the period for incorporation of the eligible start-up by one more year up to 31st March, 2023 to provide them tax incentive for three consecutive years out of ten years from incorporation.

Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS) which will open up new opportunities. Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystems. Measures to be taken to help scale up this investment.

Defence Procurement for domestic industry
The Union Finance & Corporate Affairs Minister Nirmala Sitharaman has earmarked 68 per cent of the capital procurement budget for domestic industry in 2022-23, up from 58 per cent in 2021-22.

The Union Finance Minister said that Defence R&D will be opened up for industry, startups, and academia with 25 per cent of defence R&D budget earmarked. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.

Custom rates in Electronics to be calibrated
To facilitate domestic manufacturing of high growth electronic items, wearable and hearable devices, and electronic smart meters, Sitharaman announced that customs duty rates would be calibrated to provide for a graded rate structure. She also said that Duty concessions are also being given to parts of the transformer of mobile phone chargers and camera lens of mobile camera module and certain other items.

MSME to get a big boost
Micro and Small Enterprises (MSME) to get Rs. 2 lakh crore additional credit to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE). Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to empower citizens to skill, reskill or upskill through on-line training.

Move towards Digital Education
To impart supplementary teaching and to build a resilient mechanism for education delivery, the Finance Minister informed that the ‘one class-one TV channel’ programme of PM eVIDYA will be expanded from 12 to 200 TV channels and this will enable all states to provide supplementary education in regional languages for classes 1-12.

A Digital University will be established to provide access to students across the country for world-class quality universal education with personalised learning experience at their doorsteps. This will be made available in different Indian languages and ICT formats. The University will be built on a networked hub-spoke model, with the hub building cutting edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hub-spokes.

Data Centres gets infrastructure status
Data Centres and Energy Storage Systems to be given infrastructure status to provide easy financing to the sector.

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