9 PM Daily Current Affairs Brief – February 2nd, 2022

Mains Oriented Articles

GS Paper 1

• FM call for paradigm change in urban planning ‘opportunity of a lifetime’: Experts

GS Paper 2

• Budget’s missed healthcare opportunity
• A betrayal of the social sector when it needs help
• MGNREGA: Is the govt expecting unemployment levels to change soon?

GS Paper 3

• A recipe to deepen the distress in rural economy
• Budget sets up the digital pitch for India to bat on
• A takeaway is the good infrastructure push
• Great On Growth, Not on Jobs

Prelims Oriented Articles (Factly)

• Centre to set up high-level panel on urban policies
• Digital varsity and e-content for schools planned
• Budget extends more sops for IFSC
• Govt. proposes new SEZ law
• A NEW SCHEME, PRIME MINISTER’S DEVELOPMENT INITIATIVE FOR NORTH EAST ‘PM-DevINE’ ANNOUNCED; Rs. 1500 CRORE ALLOCATED
• MHA budget hiked by 11 per cent, lion’s share of allocation for police
• Health Sector in Budget 2022: Despite Covid pandemic, health no longer the highlight
• Cryptocurrency tax: Budget 2022 unveils norms for virtual digital assets
• Push for promotion of drones through start-ups
• Budget 2022: Auctions By March, Rollout By FY23 Govt lays ground for 5G rollout; pushes rural broadband deadline to 2025
• FM moots ₹19,500-cr. push for solar manufacturing

Mains Oriented Articles

GS Paper 1

FM call for paradigm change in urban planning ‘opportunity of a lifetime’: Experts

News: On emphasizing urban planning, Finance Minister (FM) said when India will celebrate its 100th Independence Day, nearly half the population would be in urban areas.

What is the announcement on urban planning from budget 2022-23?

FM said that urban planning will help India realize its economic potential, including livelihood opportunities for the demographic dividend. To achieve this, there is a need for a paradigm change, like

– India needs to nurture the megacities and their hinterlands to become current centers of economic growth.

–  India needs to facilitate its tier 2 and 3 cities. There is a need to reinvent cities into centers of sustainable living with opportunities for all, including women and youth.

What is the need for urban planning?

First, Indian urban planning is still working on philosophies of the socialist era. It is characterized by a command and control approach, license-permit raj, and an anti-market outlook. This brings more problems and harm to the poorest section of the urban population. So, it urgently needs reform and liberalization.

Second, Urban planning is missing in most of the Indian cities “as their growth trajectory determined by realtors”.

What is the significance of good urban planning?

According to experts:

–  well-planned urbanism will add to the GDP and contribute to economic growth.

– Involvement of various stakeholders at multiple levels and emphasis on paradigm change will help to make the urban sector perform better.

What steps should the government need to adopt for better urban planning?

– Lay plans that address specific problems and characteristics of specific cities.

– Ensure good public transport is present in these areas.

– Focus on creating mobility grids that would connect the secondary cities to megacities.

ForumIAS is now in Hyderabad. Click here to know more

GS Paper 2

Budget’s missed healthcare opportunity

News: Given the Covid pandemic it was expected that health would be the focus of the budget. But government’s focus is more on capital expenditure.

Why government focus on health is important?

An estimated 70,000 crore have been spent on out-of-pocket expenditure by people. This pushed millions below the poverty line. Children have lost two years of schooling. Covid resulted in a 30% shortfall in covering immunisation and reproductive and child health programmes.

Though The budget allocation on health has increased to 83,000 crores, it is only an increase of 16.4% over the previous year.

Why less allocation is a challenge for the health sector?

First, because of the COVID-19 pandemic fiscal space for health is small. And the key priorities of defence, education and subsidies also cannot be ignored.

Second, While the Centre bears only 8% of health expenditure, states spend twice that amount. There is a huge divergence in health spending across states, with states like Uttar Pradesh and Bihar becoming major determinants in health outcomes.

Third, improvement in health outcomes needs long-term planning, which is lacking in India.

Why investment in health sectors is important?

Investment in maternal and child health and nutrition will pay dividends with a more capable workforce. Investments in health provide financial risk protection to the population. This can save families from going into poverty.

The window of long-term investment is small. The 26 million children born in India every year are part of human capital that should be converted into an active and healthy workforce.

What should be done going forward?

There should be a sustained 20-year plan to reach critical milestones like infant mortality, nutrition, child immunisation, reductions in infectious diseases etc.

India can learn from the Chinese plan and long-term investment which pulled millions out of poverty by investing in health.

The national health Mission thus becomes key for attaining long-term health goals in India.

A betrayal of the social sector when it needs help

News: India continues to rank poorly in various global indices such as the Human Development Index, the Global Hunger Index and others. But, despite this, the budget has put less emphasis on the social sector like health, education and food security.

What is the present condition of Indian economic growth?

Various reports like Oxfam’s ‘Inequality Kills’ and the ICE360 survey, found that the recovery in economic growth in India is K-shaped. It means that the incomes of the poorer sections of the society are decreasing, while those of the richer sections are increasing.

India has been experiencing increasing inequality over the last couple of decades. Also, there is stagnancy in real wages and an increase in unemployment after 2016.

What are the allocations provided to the social sector in the Budget 2022-23?

School Education: The government acknowledged learning challenges created by the closure of schools. Yet, the government announced an expansion of the ‘ one class, one TV channel‘ scheme instead of allocations of school. The government needs to focus on school infrastructure, teachers vacancies, etc

The budget for school education at ₹63,449 crores is a slight improvement over last year’s ₹54,873 crores (2021-22 budget estimates, BE). Allocation to PM Poshan, has also reduced from ₹11,500 crores last year to ₹10,233 crores this year.

Public Health System: Despite the pandemic, the budget for the department of health and family welfare has gone up only 16%. Even, the budget for jal jeevan mission increased to 60,000 crores, only 44% of allocated funds were spent as of December 2021. Also, the budget for water and sanitation should not be clubbed with health.

Public Distribution scheme: Though the national food security act covered only 60% of the population, PDS served as a lifeline during the pandemic period. Eligible persons benefited from additional foodgrains under PMGKAY. But food subsidy of 2.06 lakh crore is only enough to cover NFSA entitlements.

Schemes: Budgets for important schemes such as Saksham Anganwadi, maternity entitlements and social security pensions are around the same as the allocations for last year. The allocation for MGNREGA at ₹73,000 crores also does not reflect the increased demand for work or the pending wages of ₹21,000 crores.

How less allocation of resources can affect the social sector?

International Labour Organization, shows that the spending on social protection (excluding health) in India is 1.4% of the GDP, while the average for low-middle income countries is 2.5%. Budgets on health and education have also been low, much below the desirable levels of 3% and 6% of the GDP. This together, can impact the inclusive development of India.

MGNREGA: Is the govt expecting unemployment levels to change soon?

News: Recently finance minister released Union Budget 2022-23.

This article discusses the regressive nature of budget in terms of social welfare.

Why the budget 2022-2023 appears regressive in nature with respect to social welfare?

One, last year only Rs 73,000 crore was budgeted but the allocation for MGNREGA was increased to Rs 1.11 trillion due to pandemic. The funds were utilized within seven months itself and 23 states/UTs used more money than they received but still there are complaints of delay in payments.

This year again MGNREGA budget estimate is again Rs 73,000 crore. It appears that government is expecting jobs to increase.

Two, under Pradhan Mantri Garib Kalyan Yojana, 60 per cent of the population, receive 6 kg of free grain and dal. But the budget has not given clarity on its continuance.

Three, the mid-day meal scheme saw budget cut in 2021–22 and the Revised Estimate was lower. The scheme has been renamed PM Poshan but the allocation is same this year. If it is adjusted for inflation, it will be lower by 40 per cent.

Poshan Abhiyan aims to improve nutritional outcomes by 2022, but the government had released only 46 per cent of the annual outlay by October 31, 2020. Also, in 2021, the budget was cut by 27 per cent.

Four, the expenditure on ICDS was also lower in nominal terms in 2021-22 compared to 2014–15. ICDS schemes reduce the mortality, morbidity, malnutrition and school dropout and enhance the capability of the mother. But Inflation adjusted expenditure is 36 per cent lower for 2021–22 compared to 2014.

The ICDS was clubbed with the Poshan Abhiyan, the Scheme for Adolescent Girls, and the National Creche Scheme, and now known as Saksham. Its budget for 2021–22 was less than the previous year’s budget for the ICDS alone and estimates for 2022-23 is unchanged from last year revised estimate.

Five, the Drinking Water and Sanitation Department saw its budget rise but Rs 50,000 crore of that was for the Central Road and Infrastructure Fund. It suggests an act of cover up to avoid questions.

Six, the Pradhan Mantri Matru Vandana Yojana was clubbed with the Beti Bachao Beti Padhao scheme for girls’ education, the Mahila Shakti Kendra and other general gender budgeting. It is now known as Samarthya. It received less than allocated funds in 2021-22 and there is no direct reference to it in 2022-23 Budget.

Seven, the allocation for Ayushman Bharat was Rs 6,400 crore in 2021–22 which was same as previous year. But the Revised Estimates show that only Rs 585 crore was actually spent.

GS Paper 3

A recipe to deepen the distress in rural economy

News: The pandemic induced slowdown has disproportionately affected those at the bottom. Also the economy specially the rural economy had been facing challenges due to demand deficiency even before the pandemic started. 

Given that monetary policy has limited success in dealing with a crisis of this nature ,fiscal policy is expected to play the dominant role.  

How can fiscal policy help the rural economy come out of distress? 

It can be done by increasing consumption demand in the economy and also protect those impacted by the slowdown and the pandemic.  One way of doing this is to raise incomes of those engaged in agriculture, directly as well as indirectly. 

What are the challenges that rural economy is facing? 

Rising cost of agricultural inputs: Budget has drastically reduced the subsidy on fertilisers for 2022-23. This is in addition to the high prices for energy, which has also seen a sharp rise last year as prices for both diesel and electricity rose. 

This will lead to farmer incomes declining even more than the levels of 2019. 

Although there has been a rise in inflation, the budget has not increased allocation for support schemes, such as crop insurance, interest subvention and cash transfer scheme. 

Due to the challenges faced by the agriculture economy, rural non-farm economy acted as a refuge for a majority of wageworkers. For example – Majority of the workers took employment under the National Rural Employment Guarantee Scheme (NREGS). However, budget allocation of NREGS also has been reduced compared to last year. 

Overall, there is a net result is a 12% decline in the budget of rural development at a time when distress in the rural economy is at its highest.  

Government should strive to provide protection of incomes, employment and basic services to the majority in rural areas.    

Budget sets up the digital pitch for India to bat on

News: Finance Minister has recently presented the budget.

Although there are many positives in the Indian economic scenario like with 9.3% India is the fastest-growing large economy, it has over $630 billion of foreign reserves equalling 13 months of imports.

However there are some challenges too like the problem of unemployment rate.  

How the present budget tries to address these issues? 

Infrastructure– The current budget allocates ₹7.5 lakh crore to infrastructure, which is 35% higher than previous year. 

It has the benefit of triple effect that is it generates employment, revives the core sector and improves the productivity of the economy.  

A large part of this allocation will be to fund the PM Gatishakti, with special emphasis on setting up 100 multimodal cargo terminals and data connectivity for seamless movement of goods.  This initiative will bring tremendous benefits to “Make in India” & PLI initiatives and reduce business costs. 

However, government should focus on proper implementation to harness its complete benefit. 

Financial assistance to States for capital Investments has increased: This reflects the true spirit of a federal structure.  

Digital India: Government initiatives like issuing digital currency, Digital University, emphasis on digital banking, auctioning 5G spectrum, building optical fibre network, etc will improve efficiency and lead to generation of employment in the services sector. 

It also puts emphasis on urban planning and development, as 50% of India’s population lives in urban areas. This will improve quality of life. 

What the budget still missed to address? 

Healthcare did not get the expected share of allocation. This is specially important as India has one of the lowest hospital infrastructures for its population.  

While there is mention of light touch regulation for AI, green energy and clean mobility, there was need for more to accelerate growth in these sunrise sectors.  

The budget also misses overcoming the shortfalls of the Privatisation and asset monetisation initiatives that under delivered, and reforms were expected to ensure that those get back on track.  

The other sector, one of the largest employers of blue-collared workers, i.e. the real estate sector, was missing in terms of suitable incentives, specially when it is still to recover from the pandemic 

Indian Diaspora had a long-standing demand that the OCI (Overseas Citizen of India) investments be treated at par with the resident investors, Budget could have used the diaspora as an additional economic engine if it fulfilled this demand. 

A takeaway is the good infrastructure push

News: Recently Union Budget 2022-23 has been released which has focused on expanding capital expenditure.

The article discusses the projected growth, revenue, expenditure, debt and real growth.

What is projected income growth?

Budget has projected a nominal GDP growth estimate of 11.1% for 2022-23. The real GDP growth is estimated of 8% with an implicit price deflator (IPD)-based inflation of 2.9%. It will deliver nominal growth of 11.1%.

But what could be real GDP?

According to NSO, real GDP in 2021-22 will exceed marginally from 2019-20 level. In the second half of 2021-22, real GDP growth was only 5.6% without any base effects. But the IPD-based inflation will be relatively high in 2022-23.

The reason of high IPD- based inflation is high wholesale price index in the first half of 2022-23 due to high prices of global crude and primary products. Hence, the real GDP growth will be around 7%-7.5% in 2022-23 with nominal growth assumption of 13% and IPD-based inflation will be 5%.

What is projected revenue and expenditure?

One, the Centre’s gross and net tax revenues are estimated to grow at 24.1% and 23.8%. However, the tax buoyancy has been reduced to 0.9. But the Centre’s tax buoyancy will be higher than 0.9 due to digitization and formalization of the economy.

Two, the total expenditure will grow by 4.6%. But the revenue and capital expenditures will grow by 0.9% and 24.5% respectively. This structural change will increase output and act as employment multiplier.

What is projected level of debt and fiscal deficit?

As per Economic Survey for 2021-22, the general government debt relative to GDP is close to 90% at the end of 2021-22 and 2022-23. The debt-GDP ratio will increase in 2022-23 which will cover major part of the Government’s revenue budget.

There will be reduction in fiscal deficit by 0.5% points and the target is to reach a level of 4.5% by 2025-26. This will result in reduction of 0.63% points in fiscal deficit per year in the next three years.

What are the other changes made in Budget 2022?

One, it incentivized States to expand capital expenditures by permitting a fiscal deficit limit of 4% of GDP. 0.5% is marked for expanding power infrastructure. Also, ₹1 lakh-crore has been allocated to States for capital expenditure in 2022-23 as 50-year interest-free loans.

Two, subsidies are reduced to 1.2% of GDP in 2022-23 from 1.9% in 2021-22 to reduce the burden of interest payments which has gone up from 3.5% in 2021-22 to 3.6% in 2022-23. Interest payments are also rising due to increased borrowings from the market.

What is the way forward?

First, there should be medium-term assessment of the National Infrastructure Pipeline (NIP) to indicate the sectors of deficient investment to increase transparency.

Second, Fiscal Responsibility and Budget Management (FRBM) Act should be re-examined to give the sustainable levels of debt and fiscal deficit and the adjustment path given the high debt-GDP levels.

Third, there is need to correct the under-assessment of tax buoyancy and nominal GDP growth assumption. It will increase fiscal space for raising expenditure.

Great On Growth, Not on Jobs

News: Recently Union Budget 2022-23 has been released.

 The article discusses the wise choices made in the budget along with challenges still existing to be resolved.

What are the excellent strategies seen in the Budget 2022-23?

One, the finance minister has avoided populist measure and focused on increasing public investment.

Government capital expenditure is expected to grow by 35% and interest-free loans will be given to states for capex spending.

It will increase private investment and build a base for strong growth in the future. Also, the twin balance sheet problem is on path of recovery and banks are ready to lend.

It will help in achieving virtuous growth cycle. To further encourage private investment, the Budget has offered stability in the direct tax regime.

It is done even when there is risk of high inflation because Inflation is mostly due to higher energy and commodity prices and the government has very less control over these factors.

Two, Budget 2022-23 has also focused on soft infrastructure. It will help in building trust, reducing cost of business and becoming a part of the world’s China+1strategy.

Three, Budget has imposed 30 % tax on income from trading in virtual digital assets. RBI will also come out with an e-rupee, a digital version of the paper currency next year.

Finance minister has also said that 30% tax on digital assets doesn’t mean legalizing them. But the Budget has made the first move towards accepting the reality of crypto assets. This will give time to crypto asset holders to adjust their portfolios.

Four, Finance minister has acknowledged that economic recovery is uneven. Hence, extended credit guarantee for MSMEs.

How government has planned to finance the increased capex?

First, nominal GDP is expected to grow 11. 1% in 2022-23 which will increase gross tax revenue by 9. 6% and the total expenditure is budgeted to increase by only 4. 6%. Hence, huge capex can be funded by increased tax revenue.

Second, the food subsidy and MGNREGA allocation have been lowered by about Rs 1. 05 lakh crore. Also, spending on vaccines and Air India will fall in 2022-23. These steps will free up resources.

What are the challenges existing for the Indian economy?

First, the major issue is joblessness and pandemic has added to it. For instance, nearly 10 million jobs have been lost due to growth slowdown and the shift in activity from the labour-intensive informal sector to the capital-intensive formal sector.

India is in need of huge numbers of jobs that can be fulfilled by MSMEs. MSME sector is job-intensive but Budget has nothing new for this sector except continuing the existing guarantee schemes.

Second, other major issue is fiscal deficit. It is 6. 9% of GDP this year and it has to decline to 6.4% by next year. Budget 2022-23 has committed to bring it down to 4. 5% of GDP by 2025-26. But it has not given the path and steps that will be taken to achieve that target. This would have enhanced credibility and reduced government’s cost of borrowing.

Third, people who want to shift to virtual transaction have already shifted to UPI-based fast payment systems. Hence, there are doubts about success of e-rupee.

Fourth, if inflation will rise, retail fuel prices will start rising again and RBI’s MPC will increase rates. But any sharp rate hikes will affect growth without bringing down cost-push inflation.

What is the way forward?

PLI incentives can be linked to job creation. Government should not follow protectionist policies and import tariffs should be reduced to make export sector competitive as it creates jobs.

Prelims Oriented Articles (Factly)

Centre to set up high-level panel on urban policies

Source:  This post is based on the article “Centre to set up high-level panel on urban policies” published in The Hindu on 2nd Feb 2022.

What is the news?

The Finance Minister has announced plans to set up a high-level committee of planners, economists and institutions to provide recommendations on issues and policies related to the urban sector.

What is the need of a High Level Panel on Urban Planning?

By 2047, nearly half of India’s population is likely to be living in urban areas.

To prepare for this, orderly urban development is of critical importance, as the “business as usual” approach towards urban planning would not work.

But for orderly urban development, we need to nurture the megacities and their hinterlands to become current centres of economic growth. Further, we need to facilitate tier 2 and 3 cities to take on the mantle in the future. 

Hence, for this purpose, the Government has set up a High Level panel comprising urban planners, urban economists and institutions who will make recommendations on policies, capacity-building, planning, implementation and governance.

What are the other steps announced in the Budget for Urban Areas?

Firstly, the government will designate five institutions as centres of excellence to develop India-specific knowledge in urban planning and design and to deliver certified training in these areas. These centres will be provided funds of Rs 250 crore each. 

Secondly, the government has announced ‘MetroLite’ and ‘MetroNeo’ technologies to provide metro rail systems at much lesser cost with similar experience in Tier-2 cities and peripheral areas of Tier-1 cities.

Thirdly, the government will work with the state governments for reduction of time for land and construction approvals and promote affordable housing.

Digital varsity and e-content for schools planned

Source: This post is based on the article “Digital varsity and e-content for schools planned” published in The Hindu on 2nd Feb 2022.

What is the news?

In Budget 2022, the Finance Minister has announced several initiatives for the education Sector.

What are the initiatives announced in the Education Sector in Budget 2022?

DESH-Stack e-portal: Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to empower citizens to skill, reskill or upskill through online training.

Digital University: A digital university will be established to provide access to world-class quality universal education to students across the country with a personalized learning experience at their doorsteps in different languages.The university will be built on a networked hub-spoke model with the collaboration of best public universities and institutions in the country.

Virtual Labs: 750 virtual labs in science and mathematics and 75 e-labs for skilling with simulated learning environments are to be set-up in 2022-23.

World–class foreign universities and institutions will be allowed in the GIFT City to offer courses in various subjects like Financial Management, FinTech, Science, Technology, Engineering and Mathematics.

Expansion of One Class-One TV Channel programme of PM e-VIDYA from 12 to 200 TV channels.This will enable all states to provide quality supplementary education in regional languages for classes 1-12.

Teachers will be encouraged to develop quality e-content in different languages and different subjects so that any teacher or student can access the content from anywhere and get benefitted.

Government will set up an animation, visual effects, gaming, and comic (AVGC) promotion task force to realize the potential of this sector.

Budget extends more sops for IFSC

Source: This post is based on the article “Budget extends more sops for IFSC” published in The Hindu on 2nd Feb 2022.

What is the news?

In the Union Budget 2022, the Finance Minister has announced several steps to further promote the International Financial Services Center (IFSC) in Gujarat.

What are the steps announced by the Finance Minister to promote IFSC?

Firstly, Income Tax incentives will be provided to promote various business activities such as ship leasing and financing, offshore fund management and offshore banking activities at GIFT City. 

Secondly, World–class foreign universities and institutions will be allowed in the GIFT City to offer courses in various subjects like Financial Management, FinTech, Science, Technology, Engineering and Mathematics. These universities will be free from domestic regulations except those by IFSCA.

Thirdly, an International Arbitration Center will be set up in the GIFT City for timely settlement of disputes under international jurisprudence.

Fourthly, the Government has allowed “climate finance” funds to be routed to India through IFSC.

Fifthly, the income of a non-resident from offshore derivative instruments or over-the-counter derivatives issued by an offshore banking unit at IFSC shall be exempt from tax, subject to conditions.

Govt. proposes new SEZ law

Source: This post is based on the article “Govt. proposes new SEZ law” published in The Hindu on 2nd Feb 2022.

What is the news?

In the Union Budget 2022, the Government has proposed to replace the Special Economic Zones (SEZs) Act,2006 with a new law.

What is the Special Economic Zones (SEZs) Act?

The Special Economic Zones (SEZs) Act was enacted in 2006 with an aim to create special economic zones.

SEZ are areas within the country that have different economic regulations and are considered foreign territory. They not only aid foreign investment, but  are export hubs as well.

Units in SEZs used to enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years and 50% of the ploughed back export profit for another five years.

However, these zones started losing their sheen after imposition of minimum alternate tax and introduction of sunset clause for removal of tax incentives. Moreover, the current legislation is over 16 years old.

Hence, that’s why a new SEZ law is needed.

What will be the purpose of the new SEZ law?

The new SEZ legislation will enable the states to become partners in Development of Enterprise and Service Hubs.

It will cover all large existing and new industrial enclaves to optimally utilise available infrastructure and enhance competitiveness of exports.

A NEW SCHEME, PRIME MINISTER’S DEVELOPMENT INITIATIVE FOR NORTH EAST ‘PM-DevINE’ ANNOUNCED; Rs. 1500 CRORE ALLOCATED

Source:  This post is based on the article “A NEW SCHEME, PRIME MINISTER’S DEVELOPMENT INITIATIVE FOR NORTH EAST ‘PM-DevINE’ ANNOUNCED; Rs. 1500 CRORE ALLOCATED” published in PIB on 2nd Feb 2022.

What is the news?

The Finance Minister has announced the Prime Minister’s Development Initiative for North-East(PM-DevINE) Scheme during the Union Budget 2022-23.

What is PM-DevINE Scheme?

The PM-DevINE Scheme will fund infrastructure and social development projects based on the needs felt in the North-East.

Objective: To enable livelihood activities for youth and women and fill the gap in various sectors.

Implementation: The scheme will be implemented through the North-Eastern Council. 

The scheme will not be a substitute for existing central and state schemes.

Schemes covered under PM-DevINE: The list of projects that will be initially funded under the scheme will be: 

– Establishment of Dedicated Services for the Management of Pediatric and Adult Hematolymphoid Cancers in North East India, Guwahati (Multi-State)

– NECTAR Livelihood Improvement Project (Multi-State) 

– Promoting Scientific Organic Agriculture in North East Indian (Multi-State)

– Construction of Aizawl By-pass on Western Side 

– Gap funding for Passenger Ropeway system for Pelling to Sanga-Choeling in West Sikkim

– Gap funding for Eco-friendly Ropeway (Cable Car) from Dhapper to Bhaleydhunga in South Sikkim 

– Pilot Project for Construction of Bamboo Link Road at Different Locations in Various Districts in the State of Mizoram among others.

MHA budget hiked by 11 per cent, lion’s share of allocation for police

What is the News?

Finance Minister has announced the budget for 2022-23. The budget provided ample allocation for internal security.

About the allocation of budget for internal security

Ministry of Home Affairs (MHA): In the Union Budget for 2022-23, 1.85 lakh crore has been allocated to MHA. This is an increase of 11% over the Rs 1.66 lakh crore allocated to it in the current fiscal. In 2019-20, the Budget had allocated Rs 1.67 lakh crore to the MHA.

However, capital expenditure in the 2022-23 Budget for MHA has increased by only 5% from Rs 15,924 crore in the last Budget to Rs 16,753 crore this Budget.

Police: The budget allocated the bulk of the MHA funds of Rs 1.17 lakh crore to the police. Of the 1.17 lakh crore, Rs 10,500 crore has been allocated for capital expenditure, just marginally higher than the last Budget.

The allocation for Delhi Police has also increased from Rs 8,338 crore to Rs 10,096 crore between the last and this Budget.

Jammu and Kashmir: While the 2021-22 Budget had granted Rs 30,757 crore to the UT, this Budget has allocated Rs 35,581 crore to UT.

Ladakh: Ladakh has been allocated Rs 5,958 crore, the same as the last one and the one before that. Almost 60% of the allocation for Ladakh is capital expenditure.

CAPF: The total allocations for CAPF have increased by 12% in the last Budget to Rs 87,444 crore in 2022-23. Border infrastructure management has been allocated about Rs 600 crore more this Budget with a total allocation at Rs 2,744 crore.

This is to improve infrastructure in border areas. Under a new Vibrant Villages Programme, the government will increase the connectivity of border areas and do activities will include construction of villages infrastructure, housing, tourist centres, road connectivity, etc

Other allocations in the budget 2022-23

Office of Principal Scientific Advisor: In the Cabinet, the highest increase in the allocation has been recorded by the Office of Principal Scientific Advisor. The allocation for this office is up from Rs 68 crore in the last budget to Rs 300 crore in this Budget.

Source: This post is based on the article “MHA budget hiked by 11 per cent, lion’s share of allocation for police” published in the Indian Express on 2nd February 2022.

Health Sector in Budget 2022: Despite Covid pandemic, health no longer the highlight

What is the News?

In Budget 2022, the Finance Minister has announced several initiatives for the Health Sector. But the Budget 2022-23 has not allocated much to the health sector as required despite the ongoing pandemic.

What are the initiatives announced in the Health Sector in Budget 2022?

Health Budget: The health sector saw a muted hike amid a still looming Covid-19 pandemic and its aftermath. Overall, the health budget is up merely 0.8% over the current fiscal’s revised estimates and 16% over the budgetary estimates.

Covid vaccination support to states: The government has pledged Rs 5,000 crore as support to states for COVID vaccination. Where,  FY22’s Revised Estimate shows a spend of Rs 39,000 crore on the vaccination drive that has covered over 75% of the adult population since its launch on January 16, 2021.

Schemes related to health: Budget has seen an increase of over 7% in the allocation towards the National Health Mission. Pardhan Mantri Swasthya Suraksha Yojana has also seen an allocation increase from Rs 7,400 crore to Rs 10,000 crore. The health infrastructure mission, too, has seen its budget go up from Rs 315 crore to Rs 978 crore.

PM Ayushman Bharat Health Infrastructure Mission has seen a substantial increase from Rs 585 crore last year to Rs 4,177 crore this year.

Focus on mental health: Because of rising in mental health problems in people of all ages due to the pandemic, FM announced a ‘National Tele Mental Health Programme’. It will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre. International Institute of Information Technology-Bangalore will provide the technical support. The scheme will support private players and start-ups to increase the current coverage of the locations, including tier-2 and tier-3 cities.

National Digital Health Ecosystem: It will be an open platform. It will comprise an exhaustive list of digital registries of health providers and health facilities, unique health identity, consent framework and universal access to health facilities.

Digital Health: The Budget has increased the allocation for the national digital health mission by more than two and half times to Rs 200 crore for 2022-2023, up from merely Rs 75 crore in the revised estimates for the current financial year.

Women health: Budget allocation has been improved for Mission Shakti, Mission Vatsalya, And Saksham Anganwadi And Poshan 2.0.

What are the drawbacks for the Health Sector in Budget 2022?

According to health experts, budget 2022-23 is a shift to a post-pandemic phase by the government. The drop in allocation for vaccination indicates that the government feels that adequate jabs have been administered.  The government has allocated none to Covid -19 Emergency Response and Heath system preparedness, which means covid is no longer a threat to the government.

Also, there is no mention of vaccines, betterment of hospitals, improving public health facilities. Experts are also disappointed as there are no strategic stated measures to boost domestic manufacturing of medical devices. Presently, this industry is 80-85%  import-dependent.

Source: This post is based on the following articles:

“Budget 2022: Despite Covid pandemic, health no longer the highlight” published in the Business Standard on 2nd February 2022.

“16% hike in healthcare sector allocation” published in The Hindu on 2nd February 2022.

“Finance Minister prescribes 2.5x booster shot for Mission Digital Health” published in TOI on 2nd Feb 2022.

Cryptocurrency tax: Budget 2022 unveils norms for virtual digital assets

What is the News?

In Budget 2022, the Finance Minister has announced several norms for virtual digital assets.

What are the steps announced by the Finance Minister for crypto assets?

Digital Rupee: Reserve Bank of India will launch a Digital Rupee – India’s version of a Central Bank Digital Currency (CBDC) by 2022-23. The CBDC will be backed by blockchain technology.

Definition of Crypto Assets: The Finance Bill, 2022 has for the first time provided a definition for crypto assets. According to the definition, any information or code or number or token generated through cryptographic means or otherwise providing a digital representation of value exchanged with or without consideration that can be transferred, stored, or traded electronically can be defined as “virtual digital assets”.

Essentially, the Finance Bill has provided for a definition of virtual digital assets which is wide enough to cover emerging digital assets, including non-fungible tokens (NFTs), assets in the metaverse, digital currencies and tokens, among others.

Tax on Crypto Assets: The Finance Minister has proposed that transfer of any virtual/ cryptocurrency asset will be taxed at 30%. No deduction except the cost of acquisition will be allowed, and no loss in transaction will be allowed to be carried forward.

In order to monitor the money trail in crypto deals, a 1% Tax deduction at Source(TDS) will be imposed on every transaction using cryptocurrencies.

Further, ​​gifts in virtual digital assets would be taxed in the hands of the recipient.

Source: This post is based on the following articles:

– “Cryptocurrency tax: Budget 2022 unveils norms for virtual digital assets” published in Business Standard on 2nd Feb 2022.

– “Budget 2022 Explained: How will tax on crypto work” published in Indian Express on 2nd Feb 2022.

– “​​RBI TO ISSUE DIGITAL RUPEE STARTING FROM 2022-23” published in PIB on 2nd Feb 2022.

– “How the newly introduced tax on crypto would work” published in Livemint on 2nd Feb 2022.

Push for promotion of drones through start-ups

What is the News?

In the Union Budget 2022, the Finance Minister has announced several steps for the promotion of Drones.

What are the steps announced by the Finance Minister for the promotion of Drones?

Firstly, Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-as-a-Service(DrAAS).

Note: Drone Shakti is a mission that aims to make India a drone hub by 2030.

Secondly, Kisan Drones will be promoted for crop assessment, digitisation of land records and spraying of insecticides and nutrients on fields.

Thirdly, The courses required for drone skills will be started in select Industrial Training Institutes in various states.

Fourthly, a scheme through PPP [public-private partnership] mode will be launched to deliver digital and hi-tech services to farmers.

Source: This post is based on the following articles:

–  “Push for promotion of drones through start-ups” published in The Hindu on 2nd Feb 2022.

– “​​Agri-tech: drones, start-up fund in focus” published in The Hindu on 2nd Feb 2022.

– “Farming gets hi-tech sauce in budget, kisan drones set for takeoff” published in The TOI on 2nd Feb 2022.

Budget 2022: Auctions By March, Rollout By FY23 Govt lays ground for 5G rollout; pushes rural broadband deadline to 2025

Source: This post is based on the following articles:

–  “Budget 2022: Auctions By March, Rollout By FY23 Govt lays ground for 5G rollout; pushes rural broadband deadline to 2025” published in Indian Express on 2nd Feb 2022.

– “​​5G Services to be rolled out IN FY23” published in The Hindu on 2nd Feb 2022.

What is the News?

In the Budget 2022, the Union Finance Minister has announced several initiatives in the Telecom Sector.

What are the initiatives announced by the Finance Minister in the Telecom Sector?

Firstly, the Government ​​will hold an auction for the 5G spectrum in 2022, but the implementation of services will happen in 2022-2023. 

Secondly, 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 the commercialisation of technologies.

Thirdly, a Scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive(PLI) Scheme.

Fourthly, to bring access to e-services, communication facilities, and digital resources in all villages in par with the access of the same in urban areas, the contracts for laying optical fibre in all villages, including remote areas will be awarded under the Bharatnet project through public-private partnership(PPP) mode in 2022-23. The Completion of laying optical fibre is expected in 2025.

FM moots ₹19,500-cr. push for solar manufacturing

What is the News?

In Union Budget 2022, the Finance Minister has announced an “additional allocation” of ₹19,500 crore as a Production-linked incentive for manufacturing solar modules.

Note: The Budget 2022 has referred to climate action as a sunrise sector and employment generator. This has sent an important signal to markets, financial institutions and the workforce.

State of Solar Energy Sector in India

According to the Central Electricity Authority: a) Solar accounted for 11.8% of the installed capacity and b) By 2030, India’s power requirement will touch 817 GW, more than half of which would be clean energy and 280GW would be from solar energy alone.

Steps taken by India to promote Renewable Energy

India has committed to “facilitate” domestic manufacturing for the solar energy sector by looking to add 2,80,000 MW of installed capacity by 2030. 

At COP 26, India has announced its aims to reach net-zero emissions by 2070. As part of this, India would increase its non-fossil energy capacity to 5,00,000 MW by 2030 and meet 50% of its energy requirements from renewable energy by 2030.

Further, in the run-up to COP-26, the U.S. and India have agreed to collaborate towards installing 4,50,000 MW of renewable energy by 2030.

Source: This post is based on the article “FM moots ₹19,500-cr. push for solar manufacturing” published in The Hindu on 2nd Feb 2022.