UNION BUDGET 2023 ANALYSIS PART 1
Prelims & Mains
Tourism Sector of India
Prelims & Mains
5 G Sector in India
Prelims & Mains
Vehicle Scrapping Policy
Prelims & Mains
1 – Namaste Scheme:
Topic : Government Policies and Interventions
- According to Finance Minister Nirmala Sitharaman, who announced a roughly $100 crore allocation in this year’s Budget for the programme now known as NAMASTE, the Union government wants to enable 100% mechanical desludging of septic tanks and sewers in all cities and towns (National Action Plan for Mechanized Sanitation Ecosystem).
- The NAMASTE Scheme was introduced in collaboration by the “Ministries of Social Justice and Empowerment” and “Ministry of Housing & Urban Affairs.” It is a member of the centre sector. The programme aims to provide safety and dignity to sanitation workers throughout urban India by developing an environment that recognises them as an essential component in the maintenance and operation of sanitation infrastructure.
- The plan’s key elements include the following:
- The programme aims to expand accessibility to safety tools and machinery and provide sanitation workers with a secure source of support.
- Its goals are to increase access to alternative livelihood assistance and decrease the vulnerability of sanitation employees.
- The sanitation workers would have access to opportunities for high-paying jobs and freelancing labour.
- It would also affect the way people interact with sanitation personnel and increase demand for secure sanitation services.
- The main objectives of the plan are:
- to end all sanitation-related fatalities in India.
- to ensure that actions related to cleanliness are being done by trained personnel.
- to keep sanitation workers from coming into direct touch with human waste.
- to guarantee that sanitation professionals have the power to run sanitation firms.
- to provide access to alternative employment for all sewage and septic tank sanitation personnel (SSWs).
- Under the NAMASTE plan, sewer or septic tank workers will be recognised, and attention will be placed on the informal labour associated with dangerous cleaning jobs. The ministries will be able to establish relationships with the workers and their families and provide them with the assistance they need to develop their skills.
- Source à The Hindu
2 – Tourism Sector of India:
Topic : Infrastructure related issues
- Up to 50 new tourism sites may be constructed, a travel-focused app will be created, and “Unity Malls” may be formed in state capitals to showcase handicrafts and products with geographical indication (GI) status. These are just a few of the numerous tourism promotion activities mentioned in the Union Budget that, in the words of Finance Minister Nirmala Sitharaman, who presented the budget to Parliament on February 1, will enter “mission mode.”
- How is the Indian tourism sector doing right now?
- The tourism sector had contributed more than US$250 billion to India’s GDP in 2018 prior to the outbreak. However, the epidemic has caused the contribution to fall to US$ 122 billion in 2020. Up to 6% of the GDP has been attributed to tourism. The post-pandemic tourism industry is projected to produce US$512 billion by 2028.
- The tourist industry will bring in the third most foreign currency for the country in 2019. The COVID-19 pandemic led to a fall in earnings in 2020, but foreign exchange earnings increased at a CAGR of 7% from 2016 to 2019. By 2028, the Indian tourism and hospitality sector is expected to produce US$50.9 billion in tourist exports, up from US$28.9 billion in 2018. The pandemic led the number of international visitors to fall from 10.9 million in 2019 to 2.7 million in 2020.
- India was ranked number 34 in the 2019 Travel & Tourism Competitiveness Report by the World Economic Forum. India recorded the highest growth in the number of jobs produced between 2014 and 2019, followed by China (5.47 million) and the Philippines (4.7 million), according to the World Tourism and Travel Council’s (WTTC) Economic Impact 2019 Report (2.53 million).
- In India, the tourism sector supported 39 million jobs in 2020, or 8% of all employment. By 2029, it is projected to sustain about 53 million employment. The tourism sector offers a wide range of employment options, including jobs in hotels, motels, tour guides, and other travel-related enterprises.
- What challenges does the tourist sector in India face?
- Despite official advertising efforts, few people are aware of India as a tourism destination. Only a small number of popular destinations are consistently filled with domestic tourists, whereas many other potential locations have little to no tourist traffic. The management of the portals and information centres is poor. There aren’t enough international advertising campaigns. Information that will entice travellers is tough to provide without online branding initiatives.
- Infrastructure and Security: Many heavily trafficked places, particularly those that are hilly, lack air connectivity. Additionally, many areas lack adequate sanitary facilities. A lack of hygiene is one thing that many tourists find off-putting. Additionally, a limited number of harassment events have raised concerns about safety, particularly among visitors from other countries. Potential tourists’ perceptions of the region are negatively impacted by certain travellers’ unfavourable experiences.
- Travelers who visit India frequently complain about communication issues. Therefore, they must use tour operators or other travel companies to help them arrange their trip to India.
Lack of Skilled Labor: It is difficult to find skilled workers, especially for hotel staff or multilingual tour guides. The market is dominated by small, unorganised firms that lack the funds to train their employees or expose them to the cultural norms of international tourists. This has an impact on travellers’ experiences.
- Visa Process: The government started the electronic visa (online) process, which led to a growth in international travellers. The visa-on-arrival option, which limits foreign visitors, is provided by a very small number of nations.
- Currency Fluctuations: Another issue is the erratic nature of currency exchange rates. Due to the unpredictability of currency values, it is particularly difficult to predict long-term tourist prices. A number of tourism-related support systems are already feeling the effects of this monetary instability.
- The coronavirus crisis is raising concerns about industry practises and bringing to light a number of issues, including inadequate risk management in the travel sector, viral globalisation, and disease travel with travellers across borders, despite the fact that it has immediate negative effects on the travel and tourism sector.
- What steps have been taken to advance the Indian tourism sector?
- Infrastructure: The government has been increasing investments in the nation’s road and rail networks as well as in supporting port development as a vital component in the growth of the tourism industry. While the Adarsh Station Scheme is working to refurbish railway stations, the Regional Connectivity Scheme, also known as UDAN (Ude Desh ka Aam Nagrik), is helping to make air travel on formerly underserved routes more accessible and inexpensive. The goals of the Swadesh Darshan and PRASHAD programmes are to encourage growth in niche tourism industries like MICE, wildlife, adventure, wellness, and religious travel. Under the Swadesh Darshan Scheme, the government has developed a number of theme-based circuits, including the Buddhist circuit, which contains landmarks associated with Lord Buddha’s life.
- Promotional Activities: Specialized travel experiences like yoga, wellness, fine dining, and wildlife viewing are the focus of promotional campaigns like the Incredible India 2.0 campaign. The “Find the Incredible You” campaign is centred on promoting specialised travel packages from the country utilising digital and social media.
- Information Hotline: The government’s implementation of the notion of electronic travel and medical visas has helped to increase foreign travel to the country. Visitors are now safer and more secure because to new initiatives like Atithi Devo Bhava, a 24-hour, multilingual tourist helpline. To help travellers, a “Incredible India Helpline” has been set up temporarily.
- Safety: The Ministry of Tourism has adopted a code of conduct for safe tourism to encourage the conduct of tourism activities with respect for fundamental rights such as dignity and the safety of both visitors and local residents, in particular women and children.
- Investment: The government allows 100% Foreign Direct Investment via the automatic method in order to promote investments across the travel and tourist sector. The firm has lately benefited from the GST rate cut on all hotel room rates, which is expected to boost the industry’s competitiveness on a global level.
- In order to protect and uphold the sacredness of national historic monuments, the Swachh Bharat movement has launched a substantial cleanliness campaign. A campaign to increase public awareness of environmental cleanliness and support the development of a Swachh Bharat, Swachh Smarak has also been launched by the Ministry of Tourism.
- Assistance to States: Under certain conditions, including funding availability, inter-se priority, the resolution of outstanding utilisation certificates, and adherence to the scheme’s rules, financial assistance is provided to states, including significant religious sites, for a range of tourism projects.
- Digital database: The government introduced NIDHI 2.0 in September 2021, a programme that will support a database for the hospitality sector, which includes lodging facilities, travel companies, tour operators, and others. NIDHI 2.0 will hasten the digitalization of the travel and tourism sector by encouraging hotel self-registration on the platform.
- The Ministry of Tourism has developed the Incredible India Tourist Facilitator (IITF) and Incredible India Tourist Guide (IITG) Certification Program in an effort to create an online learning platform for knowledgeable tourist facilitators and guides across the country.
- The Quality Council of India (QCI) and the Ministry of Tourism worked together to establish SAATHI in October 2020. (System for Assessment, Awareness & Training for Hospitality Industry). The major objective of the programme was to efficiently implement the COVID-19-related SOPs and principles for safe operation of lodging facilities, dining establishments, and other units.
- What actions can be performed in the future?
- The government should continue highlighting India’s diversity and rich history before attempting to recover its position as a tourist hotspot. The emphasis of the advertising campaigns should be on both domestic and foreign tourists. It is also possible to lengthen theme-based tourist circuits.
- Second, the skill-development programmes must be expanded. The tourism industry has the potential to generate a lot of job opportunities in smaller towns and cities (below tier-2 level). It might help with the issue of the rising unemployment rate.
- Third, maintaining the ecological, social, and cultural environments of the locations while boosting tourism must be balanced. The government should encourage eco-friendly and sustainable tourism in order to address issues with the water crisis, pollution, waste management, and other related issues.
- The government should further alter the specifications and procedures for granting tourist visas in order to boost tourism. The administration should also investigate ways to broaden the visa-on-arrival scheme.
- Fifth, giving attention to and promoting the expanding tourism industries should also be a top focus.
- The consequences of the epidemic on India’s tourism sector are gradually reversing. Even throughout the pandemic, the industry has shown resilience by adapting its operations to preserve safety protocols and social seclusion. The sector in India has tremendous untapped potential. The multiplier effect of the tourism industry can assist raise income levels and ensure inclusive growth. A thriving tourism industry may prove to be crucial for ensuring India’s transition to a high income economy.
- Source à The Hindu
3 – 5G Sector of India:
Topic : Infrastructure related issues
- The government plans to establish up 100 labs in different engineering schools across the country for the creation of 5G-enabled applications. Three excellence centres for AI will also be developed. These policies would put into effect the Union Budget, which the Finance Minister presented on February 1 and which would provide a new set of possibilities, business models, and job opportunities.
- The term “5G” refers to the fifth-generation mobile network. The faster, more reliable ultra-low latency connection offered by next-generation cellular technology. Peak network data speeds for 5G are projected to range between 2 and 20 Gigabit per second, according to a government panel analysis (Gbps). In contrast, India’s typical 4G connection rates are only 6-7 Megabits per second (Mbps), compared to 25 Mbps in wealthy countries. The Third Generation Partnership Project (3GPP) establishes and regulates the 5G usage standards (3GPP).
- Benefits of 5G for the communications industry include:
- By 2035, a government-appointed panel’s analysis projects that India’s total economic benefit from 5G will be $1 trillion.
- According to a different research, the 5G-enabled digitalization income potential for India could surpass $27 billion by 2026, according to telecom equipment company Ericsson.
- By 2025, there will be about 70 million 5G connections in India, according to the GSMA, a global trade organisation for the telecom industry.
- 5G is expected to serve as the foundation for two emerging technologies: the Internet of Things (IoT) and machine-to-machine interactions.
- Autonomous vehicles, telemedicine, and real-time data analytics are just a few of the services and applications that it might be able to offer.
- One of the key uses of 5G will be the implementation of sensor-embedded networks that permit real-time information relay across industries including manufacturing, consumer products, and agriculture.
- 5G can also contribute to more effective transportation infrastructure by increasing its intelligence.
- 5G will enable communication between vehicles and between vehicles and infrastructure, opening the door for the creation of driverless cars among other things.
- Due to its incredibly low latency, 5G is a suitable technology for several application scenarios. Latency is the amount of time it takes for data to travel from its source to its destination.
- The government has often stated that India wants to roll out 5G and play a significant role in its development and expansion. 2016 saw the creation of a high-level forum to advise India on a 5G strategy.
- The National Digital Communications Policy of 2018 acknowledged the potential of this spectrum, and TRAI has recommended a reserve price for the sale of 5G spectrum in the 3.3-3.4 GHz and 3.4-3.5 GHz bands.
- Critical Issues:
- Frequency distribution: Indian operators have significantly less spectrum than international operators. the significant investment expenses that make telecom companies question their ROI.
- Network investment: The Indian telecom sector needs to address issues with capital augmentation. Lack of funding for investments: Many Indian operators are also saddled with debt.
- The low quantity of spectrum available and the high reserve price of 490 crore per MHz are cited by telecom operators as reasons why they are apprehensive to participate in the auction.
- Legislative restraints Because prior technology investments haven’t yet been recouped, new technologies introduced more quickly tend to be more sophisticated.
- Technical challenges: It is challenging to design a global IT infrastructure that nevertheless allows for regionally distinct technology.
- Governmental incentives are lacking Given the mounting pressure on its revenues, particularly following the COVID-19-induced downturn, government has little motivation to sacrifice income.
- Discouraging Taxes: Telecom companies are reluctant to invest in cutting-edge technology because of the existing flat rate of 6% of adjusted gross revenue for licence fees and 3% for spectrum usage charges.
- The inefficiency of the auction design prevents the use of precious spectrum. In addition to the highly sought-after E and B bands, this includes precious 5G spectrum in the 700 MHz and 3.5 GHz frequencies.
- How to Proceed:
- India’s digital infrastructure must be 5G ready.
- Promote the creation of 5G products, services, and technology in India.
- Unused spectrum must be released, at least until it begins to provide large profits.
- Funding and incentives for regional telecom and IT firms to develop their internal capacities would help the country’s adoption of 5G technology.
- Support 5G start-ups that enable these design and production skills.
- IPR should be created for the aforementioned designs, thus encourage it.
- Reward successful spectrum use, the development of narrow-band networks, and market expansion.
- The manufacturing of 5G chipsets might require substantial investments.
- the ideal test environments and technology underpinnings to support and enable the competitive advantage of the Indian technical ecosystem in 5G.
- India is quickly deploying next-generation ubiquitous ultra-high broadband infrastructure, with 100% coverage of 10 Gbps in urban regions and 1 Gbps in rural areas.
- Smooth mobile networks will need a single management plan to offer universal standards, and coverage, reliability, and scalability must all be optimised.
- By 2023, there will be a staggering 9.1 billion mobile subscriptions, predicts the World Economic Forum. The arrival of 5G will be the catalyst for the digital transformation of India. In India, 5G, the fifth generation of cellular technology, is soon to be available. Consumers gain from the economies of scale while businesses get a chance to reach global marketplaces. It can help with better service delivery, quicker access to services, and wider use of digital services.
- Source à The Hindu
4 – Vehicle Scrapping Policy:
Topic: Government Policies and Interventions
- The Union Budget for 2023-2024 gives enough money to replace vehicles older than 15 years, placing a special emphasis on the programme for destroying automobiles.
- Because it will significantly reduce the amount of fossil fuels utilised and provide a significant chance for fleet modernization, the decision has drawn plaudits from the auto industry.
- During the presentation of the Union Budget on Wednesday, Finance Minister Nirmala Sitharaman announced that all State and Central government-owned vehicles, including buses owned by transportation companies and public sector enterprises that have been in service for more than 15 years, would be scrapped.
- Reduce the number of defective and out-of-date automobiles on the road, lessen vehicle air pollution, and improve vehicle and road safety are the objectives.
- Fitness Test: Before being re-registered, old automobiles must pass a fitness test. According to policy, government commercial cars that are over 15 years old and private vehicles that are over 20 years old will be scrapped.
- Older cars will be tested at the Automated Fitness Center, and the evaluations will follow international guidelines.
- After passing the emissions test, the braking system test, and the safety component test, the vehicles that fail the fitness test will be discarded.
- Regulations governing the registration procedure for facilities used for scrap, as well as the legitimacy of these facilities and the required procedures, have also been published by the Ministry.
- Road Tax Reimbursement:
- State governments may be asked to offer a road-tax rebate of up to 25% for personal automobiles and up to 15% for commercial vehicles in order to encourage owners of old vehicles to get rid of their obsolete and unfit vehicles.
- Automobile Discount: Manufacturers of new vehicles will also cover registration costs and give buyers who can present the “Scrapping Certificate” a 5% discount on the purchase price of the car.
- Vehicles that are 15 years or older from the date of initial registration would be subject to higher re-registration fees as a deterrent.
- Meaning: More junkyards will open up across the country, making it possible to remove waste from old cars in an effective manner.
- The new fitness centres, which would receive an investment of Rs 10,000 crore, will employ 35,000 people.
- Revenue Growth: Sales of large and medium commercial vehicles, which were declining as a result of the economic downturn brought on by the Covid-19 epidemic and IL&FS’s bankruptcy, will grow as a result of this (Infrastructure Leasing & Financial Services).
- This method is expected to result in the government treasury receiving between Rs 30,000 and 40,000 crores through the Goods and Services Tax (GST).
- Reduced cost: The price of vehicle parts would significantly decrease as a result of the recycling of metal and plastic parts.
- Vehicle production costs will go down as scrap resources become more accessible.
- Enhanced fuel efficiency will result in less pollution.
- 17 lakh medium and heavy commercial vehicles are thought to be over 15 years old, and older vehicles emit 10 to 12 times more pollution than more recent ones.
Source à The Hindu
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