Sanjiv Bajaj, MD of Bajaj Finserv and president-designate, CII in a conversation with Nisha Poddar said the announcement on Digital Rupee by Finance Minister Nirmala Sitharaman during the Budget speech is a good move that will help the country with its buildup in digital payments and distribution.
Edited excerpts:
Q: It looked like quite a high-tech budget with the finance minister talking about all the buzzing tech words that we are really talking about these days, be it fintech, agri tech, drones, startups, even electric vehicles. So what do you have to make about the forward-looking vision of the government when it comes to this budget?
A: It started with the finance minister using a digital device to present the budget. It's a very positive side because the digital world is changing dramatically. This budget is bringing focus to a wide variety of areas. Government policy on innovative funding -- getting private sector and getting startups and entrepreneurs -- all this will start building foundations in various areas relating to the future digital world.
The government is talking about clean vehicles, climate change, we are seeing the digitalisation of schools, digital universities we have talked about. They are sowing the seeds for the future. As the FM said, it's not only the budget for next year, but it's really for the next 25 years, and of course, all this has to translate into execution. But we're sowing the right seeds. Our best Indian minds that go overseas and invent, by creating the right environment over here, those innovations for India and for the world can happen over here.
Q: Consumption in India needs to be boosted right now and infrastructure spend is something that the budget has focused on. What do you have to say about enough being done in the budget?
A: This government, if you see even in the last budget and even this time, has consciously stayed away from spurring the consumption side by putting in money there, other than through schemes like MNREGA and looking after really the rural poor, those at the bottom of the pyramid. They have always put money on the supply side. And we saw results from that even in the last year. By putting more money into infrastructure, you're creating jobs, by creating jobs you're putting money in people's pockets, and you will see consumption increase. You may not see it right away in the short term, if you directly were to put money into the middle-class pockets, but on the other hand, it's more long term and to be fair to that, we put in demands of all types as we think is fair, they need to balance their books also and see where they can get the best value for their buck.
Q: One aspect from the financial services is digital rupee, is that going to be a game changer?
A: I think is definitely a very positive start. Digital currencies are here to stay. There are three types of digital currencies. You have the crypto-backed currencies which are independently run like the blockchains, like Bitcoins of the world. Then you've got these stable coins which are linked to a government currency. And then you have the central bank of a country itself that says that it will come out with a digital rupee. So important part over here is that we are no longer in a physical world alone. A lot of the payments that we do are digital that is linked to a digital rupee and as a consumer, as businesses, we get more and more used to digital currency. The physical banking network which costs a lot of money is no longer required for payments. You don't need ATMs anymore, why invest in them. Also, it allows the government to control a digital currency that the market may want to come out with on its own. From an individual's point of view, I'd rather trust the digital currency of my central government than one which is based on a blockchain which I know a little about, not too much about, but hoping that it's honest, it's transparent. So I think it's a good move. And it will help us with our buildup in digital payments and distribution.
Q: Anything that stands out for you in the budget, which is going to be yet another game changer or has a huge amount of potential for growth in the economy?
A: Very clearly everything on infrastructure. They're not only talking about the expansion of the GATI Shakti and highways, bringing the Express highways, expressways. They are talking about connecting multimodal transportation, so railways getting connected to roads, physical locations for movement of people, the affordable housing. Battery swapping policies will be there to encourage electric vehicles. They've touched upon a lot of areas. Bureaucracy should work together with the private sector and implement this properly. It's not a one-year thing, it's a multi-year thing, but implementation is going to be the key.
On sustainability thrust
Sustainability is becoming a very important area of focus for not only governments but even for businesses. Eventually, the actions that we take today end up protecting or exposing our future generations, whether it's in areas of climate, environmental protection, diversity of all kinds; and hence when you think of sustainability as a larger issue, what we're trying to say is how do we leave the world a better place than when we got into it? If I were to take some examples, a lot of it is around the environment, right? As financial services businesses, we can actually make active choices in what kind of businesses we fund and don't fund. Countries can make active choices in what kind of power they would want to invest in. Coal traditionally has been the cheapest, it is what most of the world has been using, but they're moving towards more renewable sources. We also have to keep in mind that this has to be done in a balanced manner. It's not a tap that you can just switch on or off on a particular day. Hence a longer-term roadmap is required, because a lot of the investments towards sustainability today would be quite expensive because volumes are not been created. For example, look at solar power, solar power was very expensive 10 years ago. Today it has become as cheap as coal power. So, we have to work in a concerted manner across like-minded countries around the world and gradually build up a more sustainable way of life going forward.
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