Indian finance minister Nirmala Sitharaman announced the Union budget for 2022 on Tuesday! Does the budget help eCommerce businesses like yours? Read the relevant highlights here!
4 Budget 2022 highlights for eCommerce businesses
1. PM Gati Shakti Masterplan
The PM Gati Shakti Masterplan is a long term project for infrastructural development in the country. As part of the plan, there is going to be multi-modal connectivity and cooperation between different transport infrastructure and logistical services.
The main objective of this master plan is to bring down logistics costs and improve the movement of passengers and goods.
Some of the major projects announced as part of it are:
- Expansion of the National Highway network
- 400 new generation Vande Bharat trains
- 100 new PM Gati Shakti cargo terminals
- Integration of Postal services and Railways networks
- Popularising ‘One Station – One Product’ concept for local businesses
For small eCommerce businesses, this is great news! With better connectivity, it will also be easier and cheaper to ship their products. In fact, aspiring online sellers in remote areas will also have access to delivery services.
2. Extension of the Emergency Credit Line Guarantee Scheme (ECLGS)
The Indian government had declared the ECLGS scheme in May 2020 as part of their financial relief package. Under this scheme, eligible small and micro-businesses could get emergency loans without having to worry about any collateral.
The scheme has already helped more than 130 lakh MSMEs in the country.
The government had previously extended the scheme to March 31 in 2022. But now the government has further extended it to March 2023.
Not only that, the guarantee cover has been extended by another ₹50,000 crores for a full cover of ₹5 lakh crores.
This is very good news for eCommerce business owners whose online sales had been adversely impacted during the pandemic.
— Ministry of MSME (@minmsme) February 1, 2022
3. Accelerating digitization
The Union Budget 2022 outlined provisions that would catapult eCommerce penetration in India to 11% from its current rate of 5%.
Some of them are:
- The government will continue to support digital payments and promote economical and user-friendly online payment platforms.
- Scheduled commercial banks would set up 75 digital banks in 75 districts to encourage digital payments
- Digital infrastructure to be set up in rural areas so that they can enjoy the same access to digital resources as urban areas
These aim at promoting financial inclusion and creating secure digital environments in tier 2 cities and beyond. And as access to internet becomes easier, more sellers will be encouraged to shift their business online.
Related read: How to start an online business with no money
4. Digital upskilling for the youth
The budget 2022 has made it clear that the government is extremely serious about its goal of becoming a trillion-dollar digital economy by 2030.
They outlined their plans for equipping the youth of India with relevant digital skills to boost an entrepreneurial culture in the country. They are:
1. Launch of skilling ePortal – Digital Ecosystem for Skilling and Livelihood (DESH Stack)
2. Reorientation of the National Skill Qualification Framework (NSFQ) to fit dynamic industry needs
These provisions would help digitally empower Indian citizens through strategic industrial partnerships, vocational education, skill development, and re-skilling or upskilling.
Union Minister @nsitharaman announced that the skilling programmes and partnership with the industry will be reoriented to promote continuous skilling avenues, sustainability, and employability
— PIB India (@PIB_India) February 1, 2022
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Expectations VS reality for Budget 2022
Here’s what the COO of Instamojo had to say –
“The introduction of an integrated platform to offer skilling, access to credit, and enhanced entrepreneurial opportunities is a much needed requirement for the sustenance and growth of the sector. This way, MSMEs can upskill to be at par with industry requirements, have free access to online resources and infrastructure, and in the long run help in the further establishment and wider reach of these businesses digitally. ” – Akash Gehani
All in all, the budget did promise some forward-looking schemes and projects for the MSME sector! There is hope that proper implementation would not only help drive growth and employment but also build resilience for India’s budding eCommerce sector.
The budget has reasserted the need to embrace digitization. As an aspiring entrepreneur, this is the time for you to take the leap of faith.
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