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Budget 2022-23 Tech Round-Up: Crypto, 5G auctions, drones, digital universities, E-Passports, open mobility, BharatNet, and more

The proposed flat tax on crypto may be the talk of the town, but there’s more to the government’s budget plans around tech.

In a speech where the words “technology,” “tech,” and “digital” were mentioned over 50 times collectively, it’s hard to keep track of all that was announced.  Here’s a round-up of all the announcements Finance Minister Nirmala Sitharaman made in her Budget 2022-23 speech in Parliament that have to do with tech and tech policy.

All announcements related to tech and tech policy

  • Crypto:
    • RBI will launch a digital rupee in 2022-23: The RBI will launch a Central Bank Digital Currency (CBDC) using blockchain technology in 2022-23, Sitharaman said. This will “give a big boost to the digital economy” and “digital currency will also lead to a more efficient and cheaper currency management system”, she said. Read more
    • 30 percent taxation of virtual digital assets: Given the “phenomenal increase in transactions in virtual digital assets”, the government has decided to tax any income from the transfer of any virtual digital asset at the rate of 30 percent, Sitharaman said. There will be no deduction in respect of any expenditure except the cost of acquisition and loss from the transfer of virtual digital assets cannot be set off against any other income, she added. Furthermore, TDS on payment made in relation to transfer of these assets will be taxed at the rate of 1 percent and virtual digital assets given as gifts will be taxed in the hands of the recipient, Sitharaman said. Read more
  • Telecom: 
    • 5G spectrum auction: The government will conduct the required spectrum auctions for 5G in 2022 to facilitate the rollout of 5G mobile services within 2022- 23, Sitharaman said.
    • PLI for 5G ecosystem: “A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme,” Sitharaman announced.
    • Completion of Bharatnet fibre laying project in 2025: The government’s Bharatnet project, which aims to lay optical fibre in all villages across India, will be completed by 2025 and contracts for the same will be awarded through PPP in 2022-23, Sitharaman said.
    • 5 percent of Universal Service Obligation Fund will be used for improving broadband services: “To enable affordable broadband and mobile service proliferation in rural and remote areas, five per cent of annual collections under the Universal Service Obligation Fund will be allocated. This will promote R&D and commercialization of technologies and solutions,” Sitharaman said.
  • Banking and Payments: 
    • Post offices accounts will be able to participate in online transfers with banks: All post offices will come on the core banking system 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, Sitharaman said. “This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion,” she added.
    • Setting up of Digital Banking Units: To encourage that the benefits of digital banking, digital payments and fintech innovations reach everyone, the government will set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks, Sitharaman said. “I welcome the Government’s decision to set up 75 banking units in 75 districts.

“This is a strong move to penetrate digital financial services in our rural market which has 40 cr+ Jan Dhan customers. This will not just help to bring the unbanked population under the financial ecosystem but also enable them to receive timely financial aid to fulfil their education, business and health needs.” – Saurabh Soni, Co-founder, Digisparsh

    • Financial support for digital payment adoption will continue: “The financial support for the digital payment ecosystem announced in the previous Budget will continue in 2022-23. This will encourage further adoption of digital payments. There will also be a focus to promote the use of payment platforms that are economical and user friendly,” Sitharaman said.
  • Education:
    • Digital University: The government will establish a digital university to provide access to students across the country to “world-class quality universal education with a personalised learning experience,” Sitharaman said. “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,” she explained.
    • Virtual science and math labs: “To promote crucial, critical thinking skills, to give space for creativity, 750 virtual labs in science and mathematics, and 75 skilling e-labs for a simulated learning environment, will be set up in 2022-23,” Sitharama announced.
    • High-quality digital content: The government will develop high-quality e-content in all spoken languages for consumption through the internet, mobile, TV, and radio through digital teachers, Sitharaman said. “A competitive mechanism for the development of quality e-content by the teachers will be set up to empower and equip them with digital tools of teaching and facilitate better learning outcomes,” she added.
    • World-class institutes in GIFT City: The government will allow world-class foreign universities and institutions to set up shop in Gujarat International Finance Tec (GIFT) City free from domestic regulations except for those by International Financial Services Centres Authority (IFSCA), Sitharaman said. These institutes will offer courses in financial management, FinTech, science, technology, engineering and mathematics to facilitate the availability of high-end human resources for financial services and technology, she added.
  • AI, drones, geospatial, space economy, AVGC, and other sunrise sectors:
    • Kisan Drone for agriculture: The government will promote the use of “Kisan Drones” for crop assessment, digitisation of land records, spraying of insecticides, and nutrients, Sitharaman said. Earlier this month, the Ministry of Agriculture and Farmers Welfare said that it will provide financial assistance for the purchase, hiring, and demonstrations of agriculture drones.

“The promotion of Usage of ‘Kisan Drones’ for crop assessments and protection, land records, spraying of insecticides, are expected to drive a wave of technology in the agriculture and farming sector. It will help the farmers to inspect each area across the field effectively, stay updated with the health of crops, find areas that need immediate attention and promote chemical-free natural farming which will in turn help exports in the coming time and builds the health of the nation.” – Dr Malini Saba, Founder & Chairman, Saba Group

    • Promoting Drone-as-a-Service through a new initiative: The government is launching a new initiative called Drone Shakti that aims to promote drones as a service (DrAAS)through startups, Sitharaman said.
    • A task force will be set up for the animation, visual effects, gaming, and comic (AVGC) sector: The AVGC sector offers immense potential to employ youth and a promotion task force with all stakeholders will be set up to recommend ways to realise this and build domestic capacity for serving our markets and the global demand, Sitharaman said.
    • Support policies and light-touch regulations for sunrise sectors: “Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country. They provide employment opportunities for youth, and make Indian industry more efficient and competitive,” Sitharaman said while announcing that “supportive policies, light-touch regulations, facilitative actions to build domestic capacities, and promotion of research & development” will be introduced to grow these sectors.
    • Blended finance: To encourage investments in important sunrise sectors such as climate action, deep-tech, digital economy, pharma, and agri-tech, the government will promote thematic funds for blended finance with the government share being limited to 20 per cent and the funds being managed by private fund managers, Sitharaman said. “Government-backed funds NIIF and SIDBI Fund of Funds have provided scale capital creating a multiplier effect,” she said.
  • Transport
    • Open mobility stack to enable seamless travel: The government will facilitate an open-source mobility stack for seamless travel of passengers, Sitharaman said. This will work similarly to the open-mobility network that Kochi is experimenting with, which facilitates a cashless transit across multiple modes of public transport wherein citizens will be able to avail any service using a single open-mobility network app.
    • Unified Logistics Interface Platform: As part of the PM GatiShakti initiative, which focuses on the development of roads, railways, airports, ports, mass transport, waterways, and logistics, the government will launch a Unified Logistics Interface Platform (ULIP) that will facilitate data exchange among all mode operators using Application Programming Interfaces (APIs), Sitharaman said. “This will provide for efficient movement of goods through different modes, reducing logistics cost and time, assisting just-in-time inventory management, and eliminating tedious documentation. Most importantly, this will provide real-time information to all stakeholders, and improve international competitiveness,” she added.
  • Data centers
    • Infrastructure status for data centres: The government has included data centres in the harmonised list of infrastructure to facilitate better credit availability for digital infrastructure, Sitharaman said.
  • Electronics manufacturing:
    • Duty concession and recalibration of custom duty: In order to support the growth of electronic manufacturing, customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters and 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, Sitharaman said.
  • Startups:
    • Expert committee to help scale up investments in startups: “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. Scaling up this investment requires a holistic examination of regulatory and other frictions. An expert committee will be set up to examine and suggest appropriate measures,” Sitharaman said.
    • Increasing eligibility period for tax incentives: “Eligible start-ups established before 31.3.2022 had been provided with a tax incentive for three consecutive years out of ten years from incorporation. In view of the Covid pandemic, I propose to extend the period of incorporation of the eligible start-up by one more year, that is, up to 31.03.2023 for providing such tax incentives,” Sitharaman said.
  • Health: 
    • National Digital Health Ecosystem will be rolled out: “An open platform for the National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities,” Sitharaman said.
  • Ease of doing business: 
    • Digitise manual processes and integrate central and state-level systems: To further reduce paperwork and increase ease of doing business, the government will get all states to digitise manual processes and interventions, integrate the central and state-level systems through IT bridges, provide single point access for all citizen-centric services, and remove overlapping compliances, Sitharaman said.
  • e-Passport
    • Passports with embedded chips will be issued: The government will start issuing e-Passports using embedded chips and futuristic technology to enhance convenience for the citizens in their overseas travel, Sitharama announced.
  • Micro, Small and Medium Enterprises (MSME): 
    • Interlinking various digital portals: The government plans to interlink its various digital portals – Udyam, e-Shram, NCS and ASEEM, to widen their scope. “They will now perform as portals with live, organic databases, providing G2C, B2C and B2B services. These services will relate to credit facilitation, skilling, and recruitment with an aim to further formalise the economy and enhance entrepreneurial opportunities for all,” Sitharaman said.
  • Skill Development
    • New e-portal to be launched for skill development: The government will launch the DESH-Stack portal “to empower citizens to skill, reskill or upskill through online training,” Sitharaman said. The portal provides API-based trusted skill credentials and discovery layers to find relevant jobs and entrepreneurial opportunities, she added.
  • Land Records Management
    • Adoption of Unique Land Parcel Identification Number will be encouraged: In order to ensure the efficient use of land resources, the government will encourage states to adopt Unique Land Parcel Identification Number (ULPIN) to facilitate IT-based management of records and a facility for transliteration of land records across any of the Schedule VIII languages will be rolled out, Sitharaman said.
    • Linkage with NGDRS will be encouraged: The government will encourage the adoption or linkage with National Generic Document Registration System (NGDRS) using the “One-Nation One-Registration Software” to ensure a uniform process for registration and “anywhere registration” of deeds & documents, Sitharaman said.
  • Government Procurement:
    • e-Bill system for all government procurement to enhance transparency: “To enhance transparency and to reduce delays in payments, a completely paperless, end-to-end online e-Bill System will be launched for use by all central ministries for their procurements. The system will enable the suppliers and contractors to submit online their digitally signed bills and claims and track their status from anywhere,” Sitharaman said.
  • Agriculture:
    • Funds for agritech startups: Sitharaman said that a fund will be facilitated through NABARD to finance startups that focus on agriculture-related activities including support for FPOs, machinery for farmers on a rental basis at farm level, and technology including IT-based support.
    • PPP model for delivery of digital services to farmers: “For delivery of digital and hi-tech services to farmers with the involvement of public sector research and extension institutions along with private agri-tech players and stakeholders of agri-value chain, a scheme in PPP mode will be launched,” Sitharaman said.
  • Electric Vehicles: 
    • Battery Swapping Policy: “Considering the constraint of space in urban areas for setting up charging stations at scale, a battery swapping policy will be brought out and interoperability standards will be formulated. The private sector will be encouraged to develop sustainable and innovative business models for Battery or Energy as a Service,” Sitharaman said.

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