RBI to introduce cryptocurrency to boost digital economy
India will introduce a digital currency in the next financial year beginning April 2022, Finance Minister Nirmala Sitharaman proposed in her Budget 2022-23 speech on Tuesday.
The introduction of a digital currency by the Reserve Bank of India will give a boost to the digital economy and also help in the currency management system, the minister said.
“Digital currency will also lead to a more efficient and cheaper currency management system. It is therefore proposed to introduce digital rupee using blockchain and other technologies to be issued by the Reserve Bank of India, starting 2022-23,” Sitharaman said.
She also said ₹1 lakh crore financial assistance to states will be provided in 2022-23 to catalyse investments.
The minister further said that in 2022-23, states will be allowed a fiscal deficit of up to 4 per cent of GSDP (gross state domestic product).
The minister also proposed to set up an expert committee to examine and suggest appropriate measures to scale up venture capital and private equity investment.
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Venture capital and private equity invested more than ₹5.5 lakh crore last year, facilitating one of the largest startup and growth ecosystems. Scaling up this investment requires a holistic examination of regulatory and other frictions, she said.
On blended finance, she said that the government-backed Funds NIIF and SIDBI Fund of Funds had provided scale capital, creating a multiplier effect.
To encourage 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, the minister said.
“Creation of a blockchain-based central bank digital currency while bringing virtual digital assets under the tax net at the highest rate of 30 per cent will help reduce speculative play, especially in the cryptocurrency space,” Shravan Shetty, MD, Primus Partners – Digital Currency, said.
