Budget Special- Current Affairs 2nd Feb 2022

Medium WAVE #GS3 #Economy

Union Finance Minister Nirmala Sitharaman, presenting her fourth Budget and the second one in a pandemic-hit economy on Tuesday, largely stuck to the broad script from last year, scaling up the wager on public capital spending to revive private investments and job creation through a virtuous growth cycle, while keeping an eye on fiscal health.

This Budget, presented in the 75th year of Independence, sets the stage for an Amrit Kaal ( time of nectar) over the next 25 years, culminating in a vision for India in 2047 as enunciated by Prime Minister Narendra Modi in his Independence Day address last year, she said.

Beginning her 90-minute speech with an expression of empathy for Indians who grappled with the health and economic impact of the COVID-19 pandemic, Ms. Sitharaman invoked a verse from the Mahabharata before placing her tax proposals for 2022-23. “The king must make arrangements for Yogakshema (welfare) of the populace by abandoning any laxity and by governing in line with dharma, along with collecting taxes which are in consonance with the dharma,” the Minister quoted.

The salaried and the middle class, however, got no direct relief in the form of tax breaks to counter inflation and the COVID impact on incomes and jobs; nor was there any significant nudge to spur private consumption that is likely to end 2021-22 below pre-pandemic levels.

Ms. Sitharaman pointed out that the government has not raised taxes in these COVID-affected budgets, but stressed that several proposals aimed at helping farmers, start-ups, micro, small and medium enterprises as well as affordable housing projects will ultimately benefit the middle classes. “There are times when you can give [relief], there are times when it will have to wait a bit longer,” she noted.

Contact-intensive services sectors such as hospitality that are also languishing under 2019-20 levels, did get a helping hand with the expansion of the existing Rs. 4.5 lakh crore Emergency Credit Line Guarantee Scheme to Rs. 5 lakh crore, with the window to avail this support extended by a year till March 2023.

The Minister conceded that jobs have been affected due to the pandemic’s effects around the world, but emphasised that the government has been taking steps to help. Production Linked Incentives for 14 sectors alone have the potential to create 60 lakh new jobs in the coming five years.

Some omissions

While the Budget marked a continuation of strategy adopted last year to lift the economy from the COVID lockdown-induced plunge of 2020-21, with the Minister reiterating several measures announced previously with fresh outlays, there were some omissions.

For instance, a fresh push was made on creating liveable cities and a better planning framework for urban areas where half of Indians could live by 2047 but there was no talk of the government’s existing programmes to build smart cities.

Separately, without mentioning the border with China, the Budget promised a convergence of existing border area development programmes to provide better physical and digital connectivity to villages with sparse populations on the ‘northern border’.

While the economy has shown strong resilience over the past year, the Finance Minister said greater capital spending was needed to sustain the recovery and enhanced the Centre’s capex plan to Rs. 7.5 lakh crore in 2022-23, which she emphasised was more than 2.2 times the outlay in 2019-20.

50-year loan for States

Separately, in a move that should help reduce federal friction, she announced a Rs. 1 lakh crore 50-year interest-free loan for States to pursue critical capital spending projects, aligned with the PM Gati Shakti programme, digitisation or urban reforms. A similar Rs. 10,000 crore window announced for 2021-22 has been enhanced to Rs. 15,000 crore in deference to State CMs’ requests, the Minister said.

The Minister said the listing of the Life Insurance Corporation of India was expected shortly, which may well translate into a lower fiscal deficit than the 6.9% of GDP projected for 2021-22. However, the ambitious Rs. 1.75 lakh disinvestment target for the year was pared to Rs. 78,000 crore, with the 2022-23 expectations set at a modest Rs. 65,000 crore.

Moody’s Investors Service, reacted with caution to the Budget math that pegs fiscal deficit in 2022-23 at 6.4% of GDP. “This suggests the government is relying on strong economic growth to help drive fiscal consolidation in light of the large bump in capital expenditure,” noted Moody’s sovereign risk group senior vice president Christian de Guzman.

https://www.thehindu.com/todays-paper/medium-wave/article38362219.ece

FM moots tax on virtual assets #GS3 #Economy

Finance Minister Nirmala Sitharaman on Tuesday proposed a 30% tax on income from virtual digital assets, such as cryptocurrencies and non-fungible tokens (NFTs).

Noting that there had been a phenomenal increase in transactions in virtual digital assets, she said the magnitude and frequency of these transactions had made it imperative to provide for a specific tax regime.

“Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%,” Ms. Sitharaman said in her Budget speech.

The Minister added there would be no deduction allowed while computing such income except the cost of acquisition. “The government has set a fixed 30% rate to ensure all investors pay a percentage of their gains to the government in the form of taxes,” said Abhinav Soomaney, CEO, Cryptotax Pvt. Ltd.

“Most commonly used cryptocurrency tax calculation methods include highest in, first out (HIFO); last in, first out; and highest in, first out. “The HIFO approach is most beneficial for investors who would like to use their highest cost basis coins.

https://www.thehindu.com/todays-paper/fm-moots-tax-on-virtual-assets/article38362221.ece

5G services to roll out in FY23: Sitharaman #GS3 #Economy

Union Finance Minister Nirmala Sitharaman on Tuesday said the government would auction telecom spectrum in 2022, which will facilitate private players to roll out 5G services before March 2023.

“Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities,” the Minister said in her Budget speech. “Required spectrum auctions will be conducted in 2022 to facilitate roll-out of 5G mobile services within 2022-23 by private telecom providers,” she added.

Speaking to reporters later, Telecom and IT Minister Ashwini Vaishnaw said the Telecom Regulatory Authority of India was deciding its recommendations for the spectrum auction and these were expected by March. “As soon as the recommendations come, we can go ahead with the auction.”

Ms. Sitharaman said to enable affordable broadband and mobile service proliferation in rural and remote areas, 5% of annual collections under the Universal Service Obligation Fund (USOF) would be allocated. This would promote R&D and commercialisation of technologies, she added.

https://www.thehindu.com/todays-paper/5g-services-to-roll-out-in-fy23-sitharaman/article38362220.ece

Big push to improve connectivity to villages along China border #GS2 #IR

In a major push to develop and improve connectivity in border areas, villages along the northern border will see development under the new Vibrant Villages Programme, Union Finance Minister Nirmala Sitharaman announced on Tuesday.

The move comes in the backdrop of China setting up “model villages” close to the Line of Actual Control (LAC).

“Border villages with sparse population, limited connectivity and infrastructure often get left out from the development gains. Such villages on the northern border will be covered under the new Vibrant Villages Programme,” Ms. Sitharaman said in her Budget speech. “The activities will include construction of village infrastructure, housing, tourist centres, road connectivity, provisioning of decentralised renewable energy, direct to home access for Doordarshan and educational channels, and support for livelihood generation.”

Additional funding for these activities would be provided and existing schemes converged, she stated. “We will define their outcomes and monitor them on a constant basis,” she stated.

The 2021 annual report of the U.S. Department of Defence to the U.S. Congress on military and security developments involving the People’s Republic of China had noted: “Sometime in 2020, the PRC built a large 100-home civilian village inside disputed territory between the PRC’s Tibet Autonomous Region and India’s Arunachal Pradesh State in the eastern sector of the LAC.”

https://www.thehindu.com/todays-paper/tp-national/big-push-to-improve-connectivity-to-villages-along-china-border/article38362160.ece

Budget provides tax sops for IFSC #GS3 #Economy

Taking forward its efforts to further promote the International Financial Services Centre (IFSC) in Gujarat, the government has proposed Income Tax incentives to promote various business activities such as ship leasing and financing, offshore fund management and offshore banking activities at GIFT City. The Union Budget has proposed to provide that income of a non-resident from offshore derivative instruments, or over-the-counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC shall be exempt from tax, subject to conditions.

Further, it has allowed world-class foreign universities and institutions to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics, free from domestic regulations, except those by IFSCA to facilitate availability of high-end human resources for financial services and technology in GIFT City, Gujarat.

“An International Arbitration Centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence,” Finance Minister Nirmala Sitharaman said in her Budget speech.

“Services for global capital for sustainable and climate finance in the country will be facilitated in the GIFT City,” she added. Manoj Purohit, partner and leader – financial services tax, BDO India, said, the move to allow financial institutions and universities to set up base will give boost to human resources development and expansion in GIFT IFSC.

Tapan Ray, MD & Group CEO, GIFT City, in a statement said , “International arbitration centre will strengthen the dispute resolution mechanism at GIFT IFSC and enhance ease of doing business at GIFT.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/budget-provides-tax-sops-for-ifsc/article38362040.ece

16% hike in healthcare sector allocation #GS3 #Economy

The government perceives the pandemic to be in retreat, going by Union Finance Minister Nirmala Sitharaman’s Budget speech as well as a perusal of the Budget documents.

In 2021-22, the Budget documents show, the Centre ended up spending Rs. 82,920 crore — nearly Rs. 11,000 crore more than the Budget estimate. This was largely in the form of ‘grant in aid’ to States.

It proposes to spend around the same — Rs. 83,000 crore — over the coming financial year. The 2022 Budget estimate is nearly 16% more than the Rs. 71,000 crore budgeted last year.

Further evidence that COVID-19 is seen as a diminished threat this year comes from allocation to a budgetary head called “India COVID-19 Emergency Response and Health System Preparedness” that saw an allotment of Rs. 12,359 crore last year but has seen zero allocation in the present year.

In her address, however, Ms. Sitharaman stressed on improving access to mental healthcare facilities via telemedicine and digital healthcare facilities. Her speech did not mention vaccines, bettering hospitals, improving public health facilities — all major points that found mention in the previous two years.

“I recognise we are in the midst of an Omicron wave, with high incidence but milder symptoms. Further, the speed and coverage of our vaccination campaign has helped greatly. With the accelerated improvement of health infrastructure in the past two years, we are in a strong position to withstand challenges. I am confident that with Sabka Prayas (everybody’s effort), we will continue our journey of strong growth,” Ms. Sitharaman said in her opening remarks.

As of Monday, India has double vaccinated more than 75% of its eligible population, even as it posted close to 1,67,000 new cases in the past 24 hours. While allocations have not been hiked, the Centre also expects to spend the same as it did last year on health research.

Health research

In 2021-22, the Centre allotted Rs. 2,663 crore for health research but spent Rs. 3,080 crore. This year, it has budgeted Rs. 3,200 crore.

The capital expenditure that the Health Ministry expects to make in the coming year is Rs. 5,632 crore or about Rs. 1,000 crore less than what was spent last year. The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) has seen a substantial increase from Rs. 585 crore last year to Rs. 4,177 crore this year. A scheme to improve pandemic preparedness via research and development as well as strengthen “bio security” has also been hiked from Rs. 140 crore to Rs. 690 crore.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/16-hike-in-healthcare-sector-allocation/article38362078.ece

Record allocation of Rs. 1.37 lakh cr. for Railways #GS3 #Economy

The Union Budget has proposed a record budgetary allocation of Rs. 1.37 lakh crore for the Indian Railways, with capital expenditure outlay of over Rs. 2.45 lakh crore for the upcoming financial year. With a 14% higher capital expenditure over last year, the national transporter plans to utilise the funds to complete key stalled projects and enhance passengers amenities and safety.

Finance Minister Nirmala Sitharaman on Tuesday also announced that 2,000 km network will be brought under Kavach — an indigenous technology developed for safety, in 2022-23, and 400 new-generation Vande Bharat trains with better energy efficiency and ride experience will be developed and manufactured during the next three years.

Terming the allocation as ‘historic’, Railways Minister Ashwini Vaishnaw told reporters that with the increased allocation, the focus will be on capacity expansion and enhancement of security, along with ‘supercritical’ projects.

98% operating ratio

Mr. Vaishnaw said for the upcoming fiscal, the Railways is targeting a 98% operating ratio, but he is hopeful of bettering this on the back of improved freight performance. The operating ratio indicates how much the Railways spends to earn a rupee.

“We are targeting 98% operating ratio in the coming year. But I think we should be able to achieve more than this… We are already achieving over four million tonne loading everyday… which is unheard of… We are now targeting freight loading of 4.5 MT everyday consistently and then move on to 5 MT/day gradually,” he said.

To a query on the Vande Bharat trains, he said, “The current Vande Bharat under operation is version 1. For version 2.0, the designing is complete and testing will begin in April. We plan to start serial production of these September onwards… Today’s target will see even better versions of this train.”

SIL4 certification

On the proposal to bring 2,000 km network under Kavach, the Minister pointed out that it is SIL4 (Safety integrity level) certified which means there is the probability of a single error in 10,000 years.

Ms. Sitharaman said the Railways will develop new products and efficient logistics services for small farmers and Small and Medium Enterprises, besides taking the lead in integration of postal and Railways networks to provide seamless solutions for movement of parcels.

She also announced the ‘One Station-One Product’ concept will be popularised to help local businesses & supply chains, and 100 PM GatiShakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.

As per the Budget documents, the Railways expects receipts comprising revenues from passenger, goods, other coaching, sundry other heads etc, to be Rs. 2.40 lakh crore in BE 2022-23 as against RE 2021-22 of Rs. 2.02 lakh crore. It expects passenger revenue of Rs. 58,500 in 2022-23, and total goods revenue to be about Rs. 1,65,000 crore.

Vishnu Sudarsan, Partner, J. Sagar Associates (JSA), added that the railways sector, which boasts a wide-reaching network and is a lynchpin of keeping crucial supply chains operational, can play a clinching role in India’s logistics growth story and meeting the climate change and sustainability goals. “However, in order to ensure a starring role for the railways in the logistics segment, it is imperative that the Railways commence involving the private sector in a meaningful and phased manner that offers a win-win to all stakeholders.”

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/record-allocation-of-rs-137-lakh-cr-for-railways/article38362108.ece

MGNREGS allocation cut by 25% to Rs. 73,000 cr. #GS3 #Economy

The Centre’s Rs. 73,000-crore allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in 2022-23 is 25% lower than the Rs. 98,000 crore Revised Estimate for the scheme in the current year, reverting to the same insufficient amount allocated in the last Budget. In fact, the MGNREGS did not find any mention during the Union Finance Minister’s Budget speech on Tuesday.

Rural employment activists and non-BJP State governments reacted with outrage, accusing the government of crippling a key safety net during an employment crisis.

The MGNREGS is a demand-driven scheme, guaranteeing 100 days of unskilled work to any rural household that wants it. During the first COVID-19 lockdown in 2020, when the scheme was ramped up and given its highest-ever budget of Rs. 1.11 lakh crore, it provided a lifeline for a record 11 crore workers. In the next financial year, 2021-22, the budget allocation dropped to Rs. 73,000 crore, resulting in the scheme running out of funds. Supplementary allocations then pushed up the Revised Estimates to Rs. 98,000 crore, but workers say they paid the cost in delayed wage payments and artificial suppression of demand, while some State governments were forced to dip into their own coffers to meet costs.

“The cut comes at a time when the country is going through its worst-ever employment crisis. With the current allocation, we will have a repeat of last year, when the funds ran out mid-way through the year, and many crucial works will have to be stalled,” said Kerala Finance Minister K.N. Balagopal.

“It is a terrible thing to do. But this is the Modi model of development,” added Amit Mitra, the Principal Chief Adviser to the West Bengal Chief Minister and a former Finance Minister of the State.

Grassroots activists said the reduction in funding would have a disastrous impact on workers.

‘Wages unpaid’

“Approximately Rs. 12,300 crore — Rs. 1,464 crore as wages and Rs. 10,900 crore as material — is yet to be paid, which is going to eat up the next year’s Budget,” said Debmalya Nandy of the NREGA Sangharsh Morcha.

“The government is using the Budget to kill the law,” said Nikhil Dey, a founder of the Mazdoor Kisan Shakti Sangathan.

“This will hit the rural economy quite badly,” said Himanshu, a rural economist at the Jawaharlal Nehru University. “MGNREGA had saved the economy during the lockdown. The hope now is that with the economy slowly limping back to normalcy, demand for MGNREGA work may not be as high,” said D.K. Pant, chief economist at India Ratings. “However, rural wage growth is not keeping pace with inflation, and if the demand for work remains high, the government must be quick to provide supplementary funds,.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/mgnregs-allocation-cut-by-25-to-rs-73000-cr/article38362119.ece

Sensex rises 1.46% on govt.’s infra plan #GS3 #Economy

The Sensex soared 848 points while the Nifty reclaimed the 17,500-mark on Tuesday after Finance Minister Nirmala Sitharaman unveiled a bigger, Rs. 39.45-lakh crore Budget, with higher spending on infrastructure to spur economic recovery and create jobs.

Metal, realty and cement stocks saw robust buying, while selling in auto and telecom counters capped the gains. After a strong start, the BSE Sensex succumbed to a sudden bout of selling following the Budget presentation, but staged an immediate rebound to end 848.40 points or 1.46% higher at 58,862.57, marking its second straight session of gains. On similar lines, the broader NSE Nifty surged 237 points or 1.37% to end at 17,576.85. Tata Steel hogged the limelight in the Sensex pack, zooming 7.57%, followed by Sun Pharma, IndusInd Bank, L&T, UltraCement, ITC, Titan and HCL Tech.

In contrast, M&M, PowerGrid, SBI, Bharti Airtel, NTPC, Maruti and Reliance closed in the red, shedding up to 1.67%.

“It is a long-term growth oriented budget which the market has welcomed, given no headroom for cautiousness and populist measures. It is expected to support growth in the future; however, it is missing some balancing measures in the context of current inflationary and slowing economy,” said Vinod Nair, Head of Research at Geojit Financial Services.

“High capex, fiscal deficit and borrowing plans in the background of a high inflation, commodity and oil prices and rising interest rates will be challenges in the short to medium-term,”

“The [FM] provided a springboard for an investment cycle with the highest ever share of capex, focus on development of national manufacturing capabilities and clean energy, tax rationalisation… while maintaining its continuous growth focus on Aatmanirbhar Bharat,” said Ashishkumar Chauhan, MD and CEO, BSE.

Sector-wise, the BSE metal index soared 4.92%, followed by basic materials, capital goods and FMCG.

The rupee pared its initial gains and settled 17 paise lower at 74.82 (provisional) against the U.S. dollar. Foreign institutional investors remained net sellers in the capital markets, pulling out Rs. 3,624.48 crore on Monday.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/sensex-rises-146-on-govts-infra-plan/article38362052.ece

Green bonds’ target carbon neutrality #GS3 #Environment

Union Finance Minister Nirmala Sitharaman on Tuesday announced plans to issue sovereign ‘green bonds’, a concept catching up globally, to move towards carbon neutrality.

“As part of the government’s overall market borrowings in 2022-23, sovereign ‘green bonds’ will be issued for mobilising resources for green infrastructure,” she said.

“The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy,” Ms. Sitharaman said. “The ‘green bond’ market is globally expanding at a fast pace, and this will help India access long-term funds at competitive rates. This will also improve the ESG climate in the country,” said Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.

Industry reactions

Reacting to the provision in the Budget, Sumant Sinha, Chairman & CEO, ReNew Power Pvt. Ltd. said, with this India has laid the groundwork for its ambition to be a net zero country by 2070. “It is great to see that the government has very firmly put energy transition and clean energy at the heart of India’s economic growth and looks to address some of the most challenging aspects of this transition,” he said.

“Sovereign ‘green bonds’ are also very welcome, which can help mobilise financial resources for distribution companies as well as for clean energy investors,” he added.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/green-bonds-target-carbon-neutrality/article38362067.ece

Closure process to get shorter #GS3 #Economy

The Union Budget 2022-23 has proposed to establish the Centre for Processing Accelerated Corporate Exit (C-PACE) for speedy winding-up of companies.

“Several information technology-based systems have been established for accelerated registration of new companies. Now the Centre for Processing Accelerated Corporate Exit (C-PACE), with process re-engineering, will be established to facilitate and speed up the voluntary winding-up of these companies from the currently required 2 years to less than 6 months,” Finance Minister Nirmala Sitharaman said in her speech.

The Budget has also proprosed to carry out necessary amendments in the Insolvency & Bankruptcy Code to enhance the efficacy of the resolution process and facilitate cross-border insolvency resolution.

The main aim of the Code is resolving corporate debtors in distress. “Necessary amendments in the Code will be carried out to enhance the efficacy of the resolution process and facilitate cross-border insolvency resolution.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/closure-process-to-get-shorter/article38362046.ece

Textile sector allocation to increase 8.1% for FY23 #GS3 #Economy

Allocation for the textile sector will see an 8.1% increase in FY23 compared with the revised budget allocation for FY22.

According to the Union Budget presented on Tuesday, of the total allocation of Rs. 12,382 crore for the textile sector for next financial year, Rs. 133.83 crore is for Textile Cluster Development Scheme, Rs. 100 crore for National Technical Textiles Mission, and Rs. 15 crore each for PM Mega Integrated Textile Region and Apparel parks scheme and the Production Linked Incentive Scheme.

The Centre has also allocated Rs. 105 crore for FY23 towards the Raw Material Supply Scheme.

Committed liability

The main increase is for cotton procurement by Cotton Corporation of India under the price support scheme. The Cotton Corporation will see allocation of Rs. 9,243 crore for the next financial year as against Rs. 8,440 crore in the revised budget allocation for the current year. This is for the committed liability of the government to the Corporation, said an official.

On duties levied, with no changes in the 10% import duty on cotton, the industry’s expectation of measures to control cotton prices, which is the raw material, was not met. Trimmings, embellishments, labels and the like that attract 5% import duty will now be available as duty-free imports for exporters of textiles and leather garments. But, it looks like made-ups and home textiles have been excluded from the duty-free import of trimmings, etc.

At present, machinery such as for knitting and weaving machines are included in the list of machines having Concessional Custom Duty of 5%. All these machines will attract 7.5% import duty.

‘Review of exemptions’

Finance Minister Nirmala Sitharaman touched upon the review of customs exemptions and tariff simplification for certain items. “This comprehensive review will simplify the customs rates and tariff structure particular for sectors like chemicals, textiles and metals, and minimise disputes,” she said.

Industry sources said customs duty includes the ad valorem tax and specific duty. The specific duty is likely to be rationalised for certain fabric items and removed for some of the garments.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/textile-sector-allocation-to-increase-81-for-fy23/article38362054.ece

Battery-swapping policy on anvil #GS3 #Economy

The Centre is planning to come out with a battery swapping policy with interoperability standards for Electric Vehicles (EVs).

Finance Minister Nirmala Sitharaman said that considering space constraints in urban areas for charging stations at scale, a battery swapping policy will be brought out and inter-operability standards will be formulated. The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service’. This will improve efficiency in the EV ecosystem, she said.

The Budget aimed at strengthening the EV industry ecosystem, which will spur the demand for green vehicles, such as electric 2-wheelers and 3-wheelers, cars and buses, said Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV).

He added that these announcements would help to develop EV infrastructure and increase the use of EVs in public transportation. It would motivate businesses engaged in delivery and in car aggregation to incorporate EVs into their fleet.

Mr. Gill added this would spur companies to venture into the battery-swapping business. Shamsher Dewan, VP & Group Head – Corporate Ratings, ICRA, said if implemented efficiently, these steps were likely to go a long way in reducing range anxiety with regard to EV adoption while also aiding economies of scale in battery production.

“The inclusion of energy storage in the harmonised List of Infrastructure will facilitate cheaper finance for EV battery makers,”

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/battery-swapping-policy-on-anvil/article38362056.ece

Budget gives MEA funds for Taliban-ruled Afghanistan #GS2 #IR

The Budget has allocated funds for projects related to Afghanistan. The Ministry of External Affairs will have Rs. 200 crore to spend on Afghanistan.

TheMEA will also dedicate Rs. 600 crore for Myanmar which is currently reeling from a civil war since the military coup of February 2021. Bhutan, as usual has received the biggest allocation of Rs. 2,266.24 crore.

India does not have a diplomatic presence in Kabul where its embassy has remained shuttered since the Taliban took over the country in August.

India has showcased its assistanceto Afghanistan as aid-oriented and focused on development projects.

Over the last two months India had sent several consignments of medicine and humanitarian assistance to Afghanistan. A large scale wheat consignment is expected to be delivered to Afghanistan in the coming weeks. The allocation for Afghanistan is expected to be spent on similar assistance during the year.

The allocation for Myanmar continues unchanged as the Ministry of External Affairs (MEA) had received similar allocation last year for the country.India has maintained diplomatic contacts with the trouble-torn country.MEA’s allocation for Mongolia, the northern neighbour of China had significantly increased from Rs. 2 crore to Rs. 12 crore.

The second highest recipient of the allocation will be Mauritius which has an allocation of Rs. 900 crore. The MEA, which is aiming to open new embassies in several locations in Africa, has an increased budget of Rs. 250 crore for the continent. The Ministry will get Rs. 300 crore and Rs. 750 crore respectively for Bangladesh and Nepal.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/budget-gives-mea-funds-for-taliban-ruled-afghanistan/article38362061.ece

Budget tosses digital rupee using blockchain technology #GS3 #Economy

In a big ‘no’ to cryptocurrencies, the digital rupee will be introduced in India during the financial year 2022-23, Union Finance Minister Nirmala Sitharaman said on Tuesday while presenting the Union Budget.

“Introduction of Central Bank Digital Currency will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” Ms. Sitharaman said.

“It is, therefore, proposed to introduce the digital rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23.”

“Digital rupee is one of the most-awaited announcements. It is important to understand how other crypto assets will be taxed and whether there will be any specific benefit given to the digital rupee,” said Pranay Bhatia, partner and leader, tax and regulatory services, BDO India.

“With no deduction for cost, tax rate at 30%, tax on mining/gifting and no offset of loss against income from other sources, the Finance Minister has given the much-needed clarity on crypto transactions. However, tracking such transactions in the absence of a central regulator may be challenging.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/budget-tosses-digital-rupee-using-blockchain-technology/article38362071.ece

Centre to set up high-level panel on urban policies #GS3 #Economy

Union Finance Minister Nirmala Sitharaman on Tuesday said in her Budget speech that as the “business as usual” approach towards urban planning would not work and a paradigm shift was needed, a high-level panel to give recommendations would be set up.

Half the population of the country would be living in urban areas by 2047, making orderly urban development critically important, she noted. “This will help realise the country’s economic potential, including livelihood opportunities for the demographic dividend. For this, on the one hand we need to nurture the megacities and their hinterlands to become current centres of economic growth. On the other hand, we need to facilitate tier 2 and 3 cities to take on the mantle in the future,” she observed.

The panel would comprise urban planners, urban economists and institutions who will make recommendations on policies, capacity-building, planning, implementation and governance. She also proposed the modernisation of building bye-laws, town planning schemes and transit-oriented development.

“For developing India-specific knowledge in urban planning and design, and to deliver certified training in these areas, up to five existing academic institutions in different regions will be designated as centres of excellence. These centres will be provided endowment funds of Rs. 250 crore each. In addition, the AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions,” she stated.

Ms. Sitharaman proposed a Rs. 76,549.46 crore Budget for the Housing and Urban Affairs Ministry, an increase from Rs. 54,581 crore in the Budget Estimate (BE) for 2021-2022 and the Revised Estimate (RE) for 2021-2022 of Rs. 73,850.26 crore.

Proposed funding for housing under the Pradhan Mantri Awas Yojana (Urban) increased from Rs. 8,000 crore in BE 2021-2022 to Rs. 27,000 RE 2021-2022 to Rs. 28,000 in RE 2022-2023. The Budget proposed to raise the grants-in-aid to the State governments from Rs. 18,139.55 crore in BE 2021-2022 to Rs. 37,824.35 crore in 2022-2023. On metro projects, the Budget proposed Rs. 19,130 crore expenditure, up from Rs. 18,998 crore in the BE for 2021-2022.

Allocation for construction of non-residential office buildings, including the Central Vista, Parliament and the Supreme Court, for 2022-2023 was proposed at Rs. 2,600.99 crore.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/centre-to-set-up-high-level-panel-on-urban-policies/article38362103.ece

Push for promotion of drones through start-ups #GS3 #Economy

The Union Budget pushed for promotion of drones through start-ups and skilling at Industrial Training Institutes (ITIs).

“Start-ups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS),” Union Finance Minister Nirmala Sitharaman said.

Courses for skilling will also be started in selected ITIs across all States. Drones will also be promoted for crop assessment, digitisation of land records, spraying of insecticides and nutrients.

Barring the mention about drones, there were no new schemes or initiatives announced for the aviation sector. With Air India now privatised and handed over to Tata Sons, the budgetary allocation for the Ministry of Civil Aviation was slashed to more than half of the current fiscal. It has been allocated Rs. 4,574 crore for the next fiscal.

The special purpose vehicle (AI Assets Holding Ltd.), set up by the government in 2019 to clean up Air India’s balance sheet to attract private investors and houses non-core assets of Air India and its liabilities, has been allocated Rs. 9,259 crore.

“The provision is made for repayment of past government guaranteed borrowings, sale and lease back rentals and past dues and liabilities of AI Ltd.”

The Minister said Rs. 51,971 crore for Air India debts was part of its revised estimate of capital expenditure of Rs. 6.03 lakh crore for last fiscal. This was for the purpose of “settlement of outstanding guaranteed liabilities of Air India and its other sundry commitments”. Budget carrier IndiGo’s CEO Ronojoy Dutta rued that expectations of “tax concession to aviation industry in the forms of cut in aviation turbine fuel excise duty and allocation of concessional finance to airlines to help us come of the pandemic” were not met.

The Ministry of Tourism received 18.42% higher allocation at Rs. 2,400 crore. A major portion of the outlay — Rs. 1,644 crore — has been earmarked for development of infrastructure for tourism development, while Rs. 421.5 crore is set aside for promotion and publicity activities.

A new Loan Guarantee Scheme for COVID–affected Tourism Service Sector (LGSCATSS) has been started during the current financial year with an allocation of Rs. 62.5 crore for five years. It provides guarantee free loan up to Rs. 10 lakh each for government-approved travel and tourism stakeholders such as tour operators and travel agents and up to Rs. 1 lakh to regional-level tourist guides approved by the government.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/push-for-promotion-of-drones-through-start-ups/article38362080.ece

Agri-tech: drones, start-up fund in focus #GS3 #Economy

The emerging agri-tech sector has been enthused by the abundance of digital farming references in the Union Budget speech on Tuesday.

“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 through PPP [public-private partnership] mode will be launched,” said Finance Minister Nirmala Sitharaman.

She added that a fund with blended capital, raised under the co-investment model, would be facilitated through NABARD. “This is to finance start-ups for agriculture and rural enterprise, relevant for farm produce value chain. The activities for these start-ups will include, inter alia , support for FPOs, machinery for farmers on rental basis and technology, including IT-based support,” said Ms. Sitharaman.

With a wider focus on drone technology, the Minister promised to promote the use of “kisan drones” for crop assessment, digitisation of land records, and spraying of insecticides and nutrients on fields. In fact, the Budget speech emphasised the efficient use of land resources via technology. “States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records. The facility for transliteration of land records across any of the Schedule VIII languages will also be rolled out,” she said.

“The adoption or linkage with National Generic Document Registration System (NGDRS) with the ‘One-Nation One-Registration Software’, will be promoted as an option for uniform process for registration and ‘anywhere registration’ of deeds and documents,” said Ms. Sitharaman.

“The expansion of technology focus from just tractors and agri-machinery to ‘kisan drones’ shows a rising interest in the application of IOT in the sector

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/agri-tech-drones-start-up-fund-in-focus/article38362095.ece

Centre to set up high-level panel on urban policies #GS3 #Economy

Union Finance Minister Nirmala Sitharaman on Tuesday said in her Budget speech that as the “business as usual” approach towards urban planning would not work and a paradigm shift was needed, a high-level panel to give recommendations would be set up.

Half the population of the country would be living in urban areas by 2047, making orderly urban development critically important, she noted. “This will help realise the country’s economic potential, including livelihood opportunities for the demographic dividend. For this, on the one hand we need to nurture the megacities and their hinterlands to become current centres of economic growth. On the other hand, we need to facilitate tier 2 and 3 cities to take on the mantle in the future,” she observed.

The panel would comprise urban planners, urban economists and institutions who will make recommendations on policies, capacity-building, planning, implementation and governance. She also proposed the modernisation of building bye-laws, town planning schemes and transit-oriented development.

“For developing India-specific knowledge in urban planning and design, and to deliver certified training in these areas, up to five existing academic institutions in different regions will be designated as centres of excellence. These centres will be provided endowment funds of Rs. 250 crore each. In addition, the AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions,” she stated.

Ms. Sitharaman proposed a Rs. 76,549.46 crore Budget for the Housing and Urban Affairs Ministry, an increase from Rs. 54,581 crore in the Budget Estimate (BE) for 2021-2022 and the Revised Estimate (RE) for 2021-2022 of Rs. 73,850.26 crore.

Proposed funding for housing under the Pradhan Mantri Awas Yojana (Urban) increased from Rs. 8,000 crore in BE 2021-2022 to Rs. 27,000 RE 2021-2022 to Rs. 28,000 in RE 2022-2023. The Budget proposed to raise the grants-in-aid to the State governments from Rs. 18,139.55 crore in BE 2021-2022 to Rs. 37,824.35 crore in 2022-2023. On metro projects, the Budget proposed Rs. 19,130 crore expenditure, up from Rs. 18,998 crore in the BE for 2021-2022.

Allocation for construction of non-residential office buildings, including the Central Vista, Parliament and the Supreme Court, for 2022-2023 was proposed at Rs. 2,600.99 crore.

https://www.thehindu.com/todays-paper/tp-miscellaneous/tp-others/centre-to-set-up-high-level-panel-on-urban-policies/article38362103.ece

Russia’s envoy thanks India, others, over Ukraine stand #GS2 #IR

After India abstained from a procedural vote calling for a discussion on Ukraine — initiated by the U.S. — at the UN Security Council (UNSC) on Monday, First Deputy Permanent Representative of Russia to the UN Dmitry Polyanskiy thanked the country publicly. New Delhi finds itself attempting to balance the interests of both its partners — Washington and Moscow — in the unfolding situation along Ukraine’s borders.

“As we expected, it [the discussion] was nothing but a PR stunt, classic example of ‘megaphone diplomacy’. No facts, only allegations and unsubstantiated claims. U.S. diplomacy at its worst [ thumbs down symbol],” Mr. Polyanskiy said on Twitter.

“Thanks to 4 of our colleagues,” he said, posting symbols of the flags of China, India, Kenya and Gabon, “who were brave to withstand U.S. hand-twisting before the vote.” China voted against the motion to discuss the matter, while the other three countries abstained.

Mr. Polyanskiy’s tweet also retweeted (i.e., responded to) tweets from his American counterpart, Linda-Thomas-Greenfield, who said the U.S. had brought the issue to the UNSC to “prevent a crisis before it is upon us”.

Russia has amassed 1,00,000 troops along Ukraine’s borders but denies allegations by the West, led by the U.S., that it is planning another invasion of Ukraine. It has sought guarantees from the North Atlantic Treaty Organisation (NATO), that it will not expand to include Ukraine , and that it will rollback its presence and operations in Eastern Europe.

Although it abstained on the vote on Monday, India, via its Permanent Representative to the U.N., T.S. Tirumurti, called for an “immediate de-escalation of tensions” taking into account the security concerns of all parties. It also called for “ quiet and constructive diplomacy.”

https://www.thehindu.com/todays-paper/tp-international/russias-envoy-thanks-india-others-over-ukraine-stand/article38362155.ece