Budget 2022: FM Nirmala Sitharaman proposes to issue sovereign green bonds to mobilise resources
Premium- FM Sitharaman said that outlay for capital expenditure has been stepped up by 35.4 per cent to ₹7.5 lakh crore in FY'23.
Finance Minister Nirmala Sitharaman on Tuesday proposed to issue sovereign green bonds to mobilise resources as part of the government's borrowing programme.
Effective capital expenditure will be ₹10.68 lakh crore, or 4.1 per cent of GDP, in 2022-23, the finance minister said, adding public investment must take the lead to pump prime private investment and support demand.
The finance minister also said that a world-class university will be allowed in GIFT (Gujarat International Finance Tec-City) IFSC (International Financial Services Centre) free from domestic regulation.
“One of priorities of the Budget set out at the outset of the FM’s speech was financing of investments. There are big announcements made in this regard. There will issue of sovereign Green Bonds for boosting green infrastructure in public sector projects. The International Financial Services Centres at GIFT city will be developed greatly to set up world class universities to impart courses including in finance, science and technology and biology, all these will be free from domestic regulations. An international arbitration centre for disputes resolution is also proposed to be set up in the GIFT city. It will facilitate disputing parties to settle their disputes in a foreign jurisdiction (ie., akin to a foreign award). Further, service of global capital in also proposed in GIFT city. This will greatly benefit and accelerate the business activities in the International Financial Services Centres.
Major boost for venture capital and private equity. An expert committee will be set up and government backed funds will support upcoming areas such as climate action, pharma and agri-tech. Up to 20% funding will be provided by the government and the investments will be managed by private fund managers.
For ease of business/ease of living next phase will be launched. Some of the laudable announcements include speedy voluntary winding up of companies. This is a major move if really implemented well. A big relief for companies stuck with long timelines for voluntary winding up. The FM said that it will be reduced from 2 years to 6 months. If incorporation and exit is expedited then it will make India a favourable jurisdiction for investment. This could better India’s position on World’s ranking for ease of doing business.
Major announcements for start-up in agro space – Boost to start-ups engaged in agri space with support to farmers, with machineries to be provided to them on lease and IT based support. Further, financing from government backed funds for agri-tech will facilitate more investment in this space,"said Mr Lalit Kumar, of J Sagar Associates(JSA) on Budget 2022.
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