Union Budget 2022: Tough news for millennials, modern investors

The message from the Budget is simply this: it's business as usual. The government will continue to invest more money in infrastructure, welfare schemes, and long-range development programs in housing, water, transportation, education and healthcare. Financial inclusion will continue to receive adequate focus. Mobility, both digital and physical, will be accelerated through investments, technology upgrades, startup ecosystems, and focused capital infusions. The government believes that one must not waste a good crisis. So, it is marching ahead, making the most out of the present.

Even for the taxpayer, it is business as usual. Traditional taxpayers don't have to worry about major changes. But, if you are a modern investor or a millennial, there is some tough news. The flat 30% tax on the sale of digital assets and the inability to set off losses from this head with other ones makes these investments doubly unattractive.

The government's financials show clear signs of recovery with robust GST collections and a positive trend in almost every high-frequency indicator. This only means that the government will be the primary driver of the economy until investment confidence revives in the private sector. However, even that will not stop the government from batting for growth, playing big, and betting to win.

Also Read | Budget 2022: India loosens purse strings to propel post-pandemic recovery

In 2022-2023, the government plans to initiate several big-ticket ideas. This includes a global issue of sovereign green bonds, a digital rupee managed by the RBI, a massive credit boost for the MSME sector, a record MSP outlay to charge up the rural economy, and a booster shot of infrastructure spending. Clearly, citizens will now see only a participative phase in the economy and must wait for the significant benefits to show up in their lives.

To get the most value out of any budget, one must take the right message out of it. The government's message is loud and clear: this is a phase of nation-building. The government will do most of the heavy lifting. Now, citizens need to alter their expectations in lifestyle management, saving, and investing.

(The author is the founder of ithought financial consulting LLP and a SEBI-registered portfolio manager)

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