The week that was: Budget, Economic Survey and a record GST

Capex Boost

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Sitharaman’s budget was heavily focused on an increased capital expenditure allocation. This component, worth ₹7.5 trillion, will make up 19% of overall spending in 2022-23, the highest share in 18 years. A major thrust in this comes from an allocation of nearly  ₹1 trillion to assist states in catalyzing overall investments in the economy through 50-year interest-free loans.

A Rural Miss

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Even as rural India struggles to recover from the pandemic’s economic impact, the budget did little to bolster recovery. The rural jobs guarantee scheme, MGNREGS, was given the cold shoulder, as it will get just ₹73,000 crore in the upcoming fiscal, 25% lower than 2021-22. The scheme had emerged as a safety net for millions during the migrant crisis in 2020, and continues to do so.

Chips, Down And Up

That’s the sales landmark the global chip industry is expected to cross in under a decade, as the semiconductor shortage eases, industry officials say. The pandemic accelerated adoption of digital tools, all of which need chips. The growing demand for gadgets led to chip companies reporting their best sales year in history in 2021, earning $500 billion in revenue.

Domestic Dominance

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Domestic brands controlled more than 75% of the smartwatch and bluetooth earbud market in India in 2021, industry data shows. In the smartwatch segment, Indian brands had a 76% market share, compared with only 17% for Chinese competitors. This is a remarkable change since 2020, when Chinese and Indian brands had 38% each. Smartwatch and bluetooth earbud sales rose 280%.

Racing Ahead

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In January, goods and services tax collections touched ₹1.41 trillion, close to the record high set in April 2021. This was the fourth time in FY22 that collections crossed ₹1.3 trillion, showing a sustained uptick in economic activity ahead of the third covid-19 wave that hit the country last month. Sustained strong revenues give the government a cushion to raise spending to ensure economic revival.

Picking Favourites

That’s the share of votes the late Pranab Mukherjee got when a Mint-CVoter pre-budget survey asked respondents to pick the best finance minister of the last ten years. Arun Jaitley was the second favourite across regions, except in South India, where Nirmala Sitharaman got the second spot. P. Chidambaram came last.

Space Odyssey

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The Economic Survey released on Monday showed that the number of startups in the Indian space sector has doubled in the past year. It has crossed 100, and of the startups, 47 were established in 2021, up from 21 in 2020. In 2019, the sector added only 11 startups. New policies pertaining to  the sector, with participation from private players, have been the key catalysts, the survey said.

Digital Tender

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If India launches the digital rupee next fiscal as promised by Sitharaman in the budget, it will become the first major economy to do so. China has been piloting a digital yuan, but only smaller countries in the Caribbean, and Nigeria, have launched it fully.

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