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Finance Minister Nirmala Sitharaman arrived with a traditional bahikhata (account ledger) to present the Budget of FY 2022-23, which has heralded Digital India’s arrival. Launched in 2015, the flagship program to digitise India, aims to empower citizens through internet connectivity and e-governance.
The volume of digital transactions in India has increased by a whopping 88% in the last three years. Financial transactions of Public Sector Banks (PSBs) through digital channels have also doubled during 2020-21.
The Budget of 2022 is an effort to make digitisation more inclusive and effective. In the post-pandemic world, where lockdowns and social distancing is the norm, paying bills, getting an education and even diagnosing illnesses have transitioned online. Improving internet connectivity and fostering digital literacy has become a necessity instead of a luxury. Keeping this in view, the Central government has introduced measures to create a more comprehensive digital ecosystem that would eliminate the gulf between digital haves and have-nots.
Here are a few salient aspects in Budget 2022 that have paved India’s path to Digital Inclusion:
The Indian Rupee is going digital with the RBI set to introduce the new currency in FY 2022-23. The Central Bank Digital Currency (CBDC), i.e., an electronic record or digital token of the rupee, will be introduced using the blockchain method. This will enable smoother domestic and international money transactions for business houses and NRIs sending their earnings back home. India is one of the first major democracies to adopt digital currency, moving towards a cashless economy.
In a bid to promote financial inclusivity, particularly in rural areas, all post offices, which add upto1.5 lakh across India, will be connected to the core banking system as per Budget 2022. The India Post Payments Bank (IPPB) is a trusted banking partner of farmers and other citizens in rural areas due to varied schemes and high interest rates.
The inclusion of this major sector will provide a much-needed boost to the Indian economy. Connecting the post offices to the core banking system will offer various advantages. Government subsidies will be made available through post offices to reach maximum beneficiaries who deposit their savings in the system. Services such as net banking, ATMs etc., will be available to previously unbanked consumers, thus bridging the rural-urban digital divide.
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Commemorating 75 years of independence, the government announced the setting up of 75 digital banking units in 75 districts across India. Proposed to be set up by Scheduled Commercial Banks (SCBs), this would enable greater participation of tech-savvy consumers.
Alongside the rise of fintech start-ups, digital banking would help more consumers gain access to Debit cards, EMI Loans and BNPL schemes. In line with the capital expenditure-driven Budget of 2022, digitisation would ease lending, which would be the much-needed boost to consumption and revival of the economy in the post-COVID times.
MSMEs have been the worst-hit sector in the pandemic. The government has announced measures to revamp the same by providing additional credit, improving access to the market and strengthening infrastructure.
Extending the ease of digitisation, four portals that provide data on registration of MSMEs and details of the unorganised labour force, i.e. Udyam, e-shram, National Career Service (NCS) and Atmanirbhar Skilled Employee-Employer Mapping (ASEEM), will be interlinked. These portals broadcast career opportunities and match the demands of the workforce to skilled labour. They will now have live databases providing Government to Citizen services(G-C), Business to Consumer services(B-C) and Business to Business services(B-B).
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A much-appreciated and unique stroke in Budget 2022 is the focus on digital education to provide qualified professionals for the booming start-up and Fintech sectors. A milestone in the making is the initiative to establish a Digital University, based on the hub and spoke model, that provides courses in financial management, FinTech sciences and other allied education modules.
The government announced the launch of an e-portal, DESH-Stack, which aims to revolutionise skill-based education. The portal offers online training and certifications based on an application programming interface (API). It also helps identify jobs and business opportunities in the field.
Additional Read – Technology trends and possible impact on business in 2022
Transportation in the nation is getting a digital makeover. Inland navigation, the most economical means of transportation, is getting digitised. Like the Parivahan Sewa, the electronic portal implemented under the Ministry of Road Transport and Highways, the government is developing an electronic portal for Inland Vessel navigation.
The e-portal is expected to collate information and details, including inland vessels, trade routes, statutory permissions, charges, tariffs and the like. The portal facilitates providing economically viable means of transportation for traders.
A strong foundation is being constructed gradually by improving the nation’s digital infrastructure. Tata Capital Corporate has been harnessing technology to provide its clientele with the most efficient financial services. We automated standard operations and digitised onboarding processes even before the pandemic and offer complete transparency in transactions through our apps and website.
Cashless, digital economy is the future. Reach out to Tata Capital relationship managers to know more and benefit from our diverse digital financing solutions.
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