Poojitha Jayadevan
Staff Writer

Key takeaways for India CIOs from the Union Budget 2022

News Analysis
Feb 04, 20225 mins

Data centres, payments, skills, health data and connectivity: The 2022 Union Budget could have big consequences for Indian CIOs.

In her Union Budget speech on February 1, 2022, Finance Minister Nirmala Sitharaman presented a host of measures on topics from data centres to digital training that could affect IT departments and increase job opportunities for IT workers.

Here’s a look at the top budget takeaways for CIOs, and where the government could have gone further.

Data centres given infrastructure status

The government has reclassified data centres as infrastructure assets, making it easier to borrow money to build them.

The ease of financing will make it easier for enterprises to locate IT resources in India, and perhaps also encourage public cloud providers to serve the world from India too, said Basant Chaturvedi, associate director of IT for South Asia, MEA & LatAm at confectionery manufacturer Perfetti Van Melle.

But, warned Gartner senior director analyst Naveen Mishra, building data centres away from a few key cities will require government action on network connectivity, which was not addressed in the budget.

A digital currency for India

Sitharaman wants to boost the digital economy further by introducing an Indian Central Bank Digital Currency (CBDC) as a more stable alternative to cryptocurrencies such as Bitcoin. “It is, therefore, proposed to introduce Digital Rupee, using blockchain and technologies, to be issued by the Reserve Bank of India starting 2022-23,” she said in the Union Budget.

While the final design of India’s CBDC remains to be seen, banks will have to build capabilities that can help them manage an ecosystem in which both traditional currency and CBDC coexist, said Ganesh Vasudevan, research director for financial insights, IDC Asia/Pacific. “To bridge the gap between legacy infrastructure and digital assets, banks need to gain expertise in cryptography, blockchain, and other emerging technologies. They must harness these technologies to refine their cash management and liquidity services by enabling new capabilities and efficiencies.”

On the retail front, CBDC might open up opportunities in the payment landscape for new and existing players, much as the introduction of India’s Unified Payments Interface (UPI) did, Vasudevan said.

Perfetti Van Melle’s Chaturvedi said that helping enterprises adopt and secure it will create job opportunities for blockchain technologists — but also for cyber security experts, web developers, technical writers, legal consultants, data scientists, and digital treasurers.

Digital Ecosystem for Skilling and Livelihood

The government plans to build a new portal to help Indians gain new technology skills, in order to reskill and upskill the IT workforce. “It will also provide API-based trusted skill credentials, payment, and discovery layers to find relevant jobs and entrepreneurial opportunities,” Sitharaman said.

Sharath Srinivasamurthy, research director for enterprise solutions and ICT practices at IDC India, said this can address three main challenges: employability of the workforce, supply-demand mismatch of skills, and the lack of a single platform to acquire, register, and explore available opportunities for skillsets. “This would go a long way in solving some of the skills gaps we have in digital skills like data science, automation, AI/ML, cloud and new age application development frameworks,” he said.

To bring this into reality, multiple elements such as  skills assessment, certification, and interfacing with potential job opportunities have to be tied together with an underlying layer of security and trust, he added.

However, Masai School CEO Prateek Shukla warned that, alongside the move to online training, “Government should create a stronger framework to control predatory practices in the education sector.”

Ayushman Bharat Digital Mission

An open platform for the digital health ecosystem will be rolled out, consisting of digital registries of health providers and health facilities, a unique health identity, a consent framework, and universal access to health facilities. 

This will put the focus on capturing structured clinical data and accelerate electronic medical record adoption across the country, said Manoj Vallikkat, research manager for healthcare insights at IDC Asia/Pacific. ”A digital health ecosystem, anchored on clinical data, has potential to create job opportunities in the fields of data storage, security, data analytics and AI/ML, and would push for upskilling of healthcare professionals,” he said.

Krupal Parchure, head of fintech and payment solutions at MYn, however, questioned whether the privacy protections offered by Indian legislation are ready for such a massive project. “It raises the question, will citizens’ health records be exposed to big tech? These initiatives need a very strong data privacy setup and Indian data privacy laws need clarity.” The budget session didn’t address issues of data protection or privacy, and up-to-date legislation in that area is still pending.

5G auctions to be conducted in 2022

Sitharaman renewed government commitments to hold 5G spectrum auctions in 2022, to facilitate the rollout of 5G mobile services by private telecom providers within 2022-23. “5G technology in particular, can enable growth and offer job opportunities,” she said.

A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the PLI scheme.

Aalok Kumar, president and CEO at NEC, said that the support those schemes provide for the government’s plan to enable affordable broadband and mobile communication in rural and remote areas, “is going to be a gamechanger in implementation and adoption of 5G.

But, warned Arvind Bali, CEO of the Telecom Sector Skill Council, it could leave industry players in a new IT skills crunch. “A spectrum auction in 2022 for the rollout of 5G and the scheme for design-led manufacturing for 5G ecosystem is likely to uplift human resource requirements significantly and also need to train the existing and new workforce.”