Budget 2023: The FinTech sector has been at the forefront of the development of India’s financial industry. Currently, India, one of the fastest growing fintech markets in the world, has around 6,600 fintech start-ups, where consumers are becoming financially literate with rapid adoption of technology and often using apps and online portals. Buying financial products through
The sector has been portrayed as a key component in supporting the Government of India’s efforts for financial inclusion and Digital India and as a bridge to reach the $5 trillion economy target by 2025.
With the upcoming Union Budget 2023-24, the timing has been ideal for the government to introduce relevant policy measures to boost the Indian fintech sector. As the nation gears up for the Union Budget 2023, let’s take a look at what fintech companies expect from the finance and banking ecosystem.
Deepak Agarwal, Co-Founder, Co-CEO, Moneyboxx
With 65% of the population living in rural India and largely dependent on agriculture and allied sectors, rapid and sustainable growth in this sector has long-lasting implications for inclusive growth. While policy initiatives such as priority sector lending target, Jan-Dhan accounts, Mudra Yojana have improved access to credit over the years, it needs further impetus as rural India accounts for only 9% of banking credit received, despite contributing almost half to the country’s national income.
New-age, fintech players are expected to play an important role along with banks in broadening financial inclusion and easing credit availability. In the upcoming budget, policies focused on addressing this structural credit gap and measures to boost rural incomes would be welcome.
Rohit Arora, CEO and Co-Founder, Biz2Credit and Biz2X-
In the upcoming budget, it is pertinent for the government to give a clear message on how to attract FDI in the manufacturing sector as well as in the infrastructure sector. India has a big opportunity to play in the China Plus One policy, a trade strategy aimed at encouraging firms and enterprises to expand their operations outside China. India needs to act fast to help such businesses set up operations in India as countries like Vietnam are increasingly taking a major share of businesses.
In the financial sector, keeping in mind that MSMEs contribute about 29 per cent to India’s GDP and employ a large number of people, it is imperative for the government to lay down a clear road map for setting up standalone digital Implement reforms including launching of the roadmap. Banks. These banks can play a big role in increasing credit access to MSMEs as well as other large businesses. Such reforms will help attract long-term FDI and create a lot of jobs in the process.
India has already proved its mettle in the field of fintech in the last few years and such favorable reforms will give a ‘big push’ to the fintech sector. India has a real competitive advantage in this sector and now, it needs to scale up more to show its strength to the world.
Gaurav Jalan, Founder & CEO, mPocket
Continuous innovations and technological advancements have fueled the growth of the Fintech industry in India. With the annual budget round the corner, it is expected that the government will prioritize the needs of fintech players and implement policies to add to their growth trajectory.
It can be expected that the government will bring reforms to strengthen the partnership between fintech institutions and banks. We are expecting that the Finance Minister will take note of the financial burden on start-ups and suggest policies to reduce it. In the last budget, he gave major tax reliefs to start-ups and employees to boost their growth and resolve the issue of double taxation and tax burden on employees on Employee Stock Ownership Plans (ESOPs). However, the eligibility criteria were very stringent, and as a result, very few start-ups could benefit from them. So, we can expect the government to look into this and provide tax relief to budding fintech start-ups and their employees.
India’s journey towards financial inclusion is being propelled by exceptional financial solutions provided by fintech companies. The work we are doing to make financial services accessible to all is a huge positive result of digitisation. Fintech will continue to grow rapidly and penetrate deeper into the country only when there is a strong digitization network in rural areas.
The sector expects more support from the government to develop stronger partnerships with banks and financial institutions to promote better financial inclusion, both offline and online. The upcoming budget should also consider the overall spending by fintech startups and offer tax benefits, perhaps in the form of a small GST subsidy.
Since personal loans now form the bulk of the loan market, an effort to offer some sort of tax refund to personal loan and education loan borrowers, similar to what home loan borrowers get, would be appreciated even by those who Pay off such debts.
Ankur Nijhawan, CEO, AXA France V-India Reinsurance Branch
We anticipate that the upcoming budget will focus on policies to promote economic growth and resilience to the pandemic. Considering the recent increase in health insurance premiums and the need to provide basic financial protection against natural calamities like Joshimath, the insurance industry is looking forward to a combined tax relief of up to Rs 1 lakh for health and home insurance.
The industry also hopes that the finance minister will bring these basic protection schemes under the zero GST mark or make it in the maximum 5% bracket. Such a move would also increase insurance penetration in India, while widening the financial safety net. Simplifying norms and providing assistance in the form of tax benefits can go a long way in opening up this segment to currently underserved and underserved sections of the population.
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