Finance Minister Nirmala Sitharaman recommended in her Budget 2022 that the Reserve Bank of India (RBI) implement digital money in the following financial year, beginning April 2022, to stimulate the digital economy and improve currency management.
Sitharaman announced during her presentation of the Budget 2022 that India will explore Central Bank Sponsored Digital Currency.
A digital (electronic) variant of currency is known as a digital currency. Digital currency may be exchanged for actual currency. The Digital Rupee will be powered by blockchain, which will be the foundational technology.
The transaction records in a blockchain cannot be modified, and the ledger is clear and legitimate, which is why it is also utilised in cryptocurrencies.
Benefits of digital rupee
The establishment of CBDC, according to the Union Budget 2022 paper, will offer a substantial boost to the digital sector. Digitized money will also result in a more efficient and cost-effective currency management system." As a result, it is planned that the Reserve Bank of India issue a Digital Rupee. They will issue that in the beginning of 2022-23, based on blockchain and other technologies.
“The Union Budget for 2022-23 in India has brought various benefits to businesses. The developer community will benefit from a decrease in the corporate levy from 12 percent to 7% in real estate. The use of blockchain technology by the RBI to issue the digital rupee would increase the transparency of real estate transactions. With Rs 48,000 crore set aside for the completion of 80 lakh dwellings under the PM Awas Yojana, affordable housing has gotten a boost. An additional Rs 60,000 crore has been set aside for the Har Ghar Nal scheme. Last but not least, an extra allocation of Rs 19,500 crore for solar module production bodes well for the real estate sector,” said Atul Goel Ganga, the Managing director of Goel Ganga Group.
The real estate industry has been hit hard in recent months, but with several significant budget announcements, it appears to be on the mend.
It is a growth-oriented budget, according to Atul Goel Pune, Managing Director of Goel Ganga Group, with a specific focus on infra-development, planning, and design of metropolitan centres, which is a much-needed prerequisite when scaling up for the future.
The PMAY scheme's Rs 48,000 crore investment would undoubtedly help the affordable housing industry. The establishment of five centres of excellence for urban design and planning is a significant move that will contribute to the real estate sector's overall growth.
In the real world, the Digital Rupee may be used for a variety of purposes, including programmable payments for subsidies and usage by financial institutions for speedier lending and payments. In the near future, we may witness a pragmatic move to a cashless economy. This might help the government's push for cashless payments gain traction and reshape the financial landscape for the better, says Atul Goel Ganga Pune.
As the use of the Digital Rupee grows, it may improve things like cross-border remittances. An environment for interoperability may be built, allowing for speedier real-time transmission. Overall, the government and companies would save money on transactions. For example, in the United Arab Emirates, a worker receives half of his income in digital currency, allowing him to transmit money to family in other countries more quickly and effectively.
Fees for wiring money may amount to as much as 7% of the transaction's value, according to the World Bank, and lowering them to 2% could improve remittances to low-income nations by $16 billion per year.
Central Bank Digital Currency, CBDC payments are final, reducing the risk of settlement in the financial system. Think of a UPI system in which CBDC is traded as if it were money instead of bank balances; the need for interbank settlement is eliminated. CBDCs might also help payment systems become more real-time and cost-effectively globalised.
