The measures taken by finance minister Arun Jaitley will have far reaching impact in increasing access of digital services and help in building a more inclusive economy. Development of digital infrastructure in the form of high speed broadband access, creation of a payment regulatory body and framework to address cyber security concerns will have systematic impact on the digital eco-system.
Boosting the Bharat Net project will also fast track broadband access. Providing Internet in 1.5 lakh gram panchayats has ensured that benefits don’t remain limited to urban areas. The DigiGaon model will take digital services to rural regions in vital areas like medical delivery and education.
Introducing a Payment regulatory board under the aegis of RBI will provide much-needed guidance to the fast growing sector witnessing innovation at fast pace. Measures taken to enhance cyber security of financial sector by setting up Computer emergency response team is addressing another important area. These two measures will ensure that interest of all stakeholders are taken care of at a policy level.
A large number of initiatives have been taken to increase share of digital transactions in the economy. Removal of service charges from IRCTC bookings and incentives on usage of BHIM app will encourage customers to go cashless. Number of merchants who can accept digital payments will increase by multiple times with government’s resolve to provide 10 lakh PoS terminals and 20 lakh Aadhaar based payment systems to merchants. Digitisation of all government receipts and promotion of cashless transactions in schools, colleges and petrol pumps will help the ecosystem immensely. All these measures will reduce friction and increase transparency.
The consequent benefit of digital payments in the form of increased access to credit will improve the economic well being of millions of Indians. Digital history will get created and this will make these consumers and merchants eligible to seek credit from formal financial institutions.
Jaitley has also addressed other issues like employment creation and development of physical infrastructure. On the demand side, incentives for labour intensive sectors ranging from footwear to housing, commitment to reforms to streamline labour laws and easier access to credit for SMEs via MUDRA will all help accelerate job creation.
Increased budgetary allocations for higher education, the specific focus on skill development through multiple programs will all help in the employability of our youth, boosting the supply side. Mainstay infrastructure investment including railways and roads has also received a substantial increase with coordinated spending likely to increase the impact. All these public investment increases have been done while keeping the fiscal deficit low. Finally the intervention in tax regime is expected to increase base of tax assesses – both individuals and merchants.
(Vijay Shekhar Sharma is the founder of mobile e-wallet Paytm)