Budget 2022: Digital currency proposed to be introduced by RBI from 2022-23

New Delhi: Union Minister for Finance and Corporate Affairs Nirmala Sitharaman has announced the Union Budget for the Financial Year 2022-2023. In her budget speech, Finance Minister proposed to introduce digital currency, using blockchain and other technologies, to be issued by the Reserve Bank of India (RBI) starting 2022-23. However, she does not clear the government’s stand on the existing cryptocurrencies such as Bitcoin.

While presenting the Union Budget for 2022-23, in Parliament on Tuesday, she elaborated that introduction of Central Bank Digital Currency (CBDC) would give a big boost to digital economy. “Digital currency will also lead to a more efficient and cheaper currency management system,” she said.

Infrastructure status

Sitharaman proposed that the Data Centres and Energy Storage Systems including dense charging infrastructure and grid-scale battery systems would be included in the harmonized list of infrastructure. “This will facilitate credit availability for digital infrastructure and clean energy storage,” she said.

Venture capital and private equity investment

The Finance Minister proposed setting up an expert committee to examine and suggest appropriate measures to scale up Venture Capital and Private Equity investment. She noted that the Venture Capital and Private Equity invested more than Rs 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystems. “Scaling up this investment requires a holistic examination of regulatory and other frictions”, she said.

Blended finance

Sitharaman said that the government-backed funds NIIF and SIDBI fund of funds had provided scale capital creating a multiplier effect. She said that for encouraging important sunrise sectors such as climate action, deep-tech, digital economy, pharma and agri-tech, the government would promote thematic funds for blended finance with the government share being limited to 20 per cent and the funds being managed by private fund managers. 

Financial viability of infrastructure projects

The Finance Minister said that for financing the infrastructure needs, measures would be taken to enhance the financial viability of projects including PPP, with technical and knowledge assistance from multi-lateral agencies. She further said that enhancing financial viability shall also be obtained by adopting global best practices, innovative ways of financing, and balanced risk allocation. “Stepping-up of public investment will need to be complemented by private capital at a significant scale,” she stated.

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