Fintech industry leaders expect reforms to help boost the sector’s growth

On February 1, Finance Minister Nirmala Sitharaman will unveil her fifth Union Budget under the Prime Minister Narendra Modi government for the financial year 2023-24. The budget has received considerable attention from both the population and the business world. Many expect that the budget is likely to be growth-oriented, with a focus on capex, manufacturing, infrastructure, the rural economy and more. Everyone is eagerly awaiting the budget as it has the potential to shape a prosperous economic future for the country and its citizens through measures aimed at promoting sustained growth, social welfare and equitable development.

As per reports, the finance minister recently met Fintech industry experts to understand their expectations for the budget. Despite a turbulent 2022, fintech industry stakeholders express optimism about the direction the industry will take in 2023. Many Fintech industry leaders expect policies and reforms to support the sector’s growth by easing the burden on the common man.

“The upcoming budget will undoubtedly be aimed at boosting growth in the Indian economy, but it must also address the challenges faced by the common man and the salaried class as we recover from a global pandemic and deal with the ongoing global economic downturn .People are particularly pinning their hopes on the upcoming budget to address the issue of unemployment, control inflation and make essential goods and services more affordable.The salaried class is looking for some cheer on the personal tax front, hoping that the annual basic exemption limit will be enhanced to Rs 5 lakhs from the existing Rs 2.5 lakhs,” said Bipin Preet Singh, Co-Founder and CEO of MobiKwik, India’s leading Fintech platform.

“The rising cost of living, rising inflation and the lingering effects of the global pandemic have hit the middle and lower middle class the hardest, and savings have taken a hit. Indians feel pinched and are putting smaller and smaller amounts in the piggy bank, and this is a big cause for concern for the Indian economy. We expect the Budget 2023-2024 to address this situation by providing some tax relief to the salaried class, reducing the cost of goods and essential services to control inflation and increasing the limit under Section 80C. Overall, the upcoming budget should be aimed at creating a savings and investment oriented economy,” said Sousthav Chakrabarty, co-founder and CEO of Siply, a Bangalore-based technology-enabled micro-savings platform.

The FinTech industry is one of the fastest growing industries in the technology startups segment and is recognized as a crucial element in the government’s economic inclusion journey. According to reports, the fintech industry is expected to reach Rs 9.27 trillion by FY27, expanding at a CAGR of 24.96 percent during the FY22-FY27 period. Fintech firms are also playing a major role in India’s Digital India movement and are expected to play a central role in India’s goal of becoming a $5 trillion economy.

“Additionally, while the Indian government has taken several measures to give startups the impetus to grow, further measures are needed. First, we expect an increase in the seed-stage angel investor pool and a tax relief on the drying Angel tax away a significant part of the profits that start-up companies need for growth” Sousthav added.

India has wholeheartedly embraced digital payments and as the country pushes for a cashless economy, some fintech players feel the need to promote services that can help build a secure digital transaction ecosystem. “One such service that needs attention in the upcoming budget is Digital Escrow which can play a pivotal role in building trust in digital payments for various use cases. I also hope that the upcoming Union Budget will bring measures to ease the financial burden of start- ups, such as reducing non-GST taxes up to Rs 10 crore turnover annually and introducing greater tax breaks for depreciation of fixed assets, reducing angel tax to promote seed stage investments and abolishing double taxation on ESOPs.Furthermore, the upcoming budget should provide further incentives to the development of manufactured in India software products, and the GST rate of 18 per cent on the same should be reduced to help indigenous software creators flourish in the domestic and international markets,” said Vineet Singh, co-founder and CEO of Castler, a pioneer in Digital Escrow in India.

India has been a phenomenal success story in fintech adoption and pioneering new ideas. Niranjan Vemulkar, co-founder and CEO of Yellow, a company aiming to usher in the future of digital inheritance and estate planning in India, said: “Currently, people who want to make a will must sign the document in person for it to be legally recognized. Although banking and mutual fund providers in India have it is allowed to provide e-signature attestation services to its customers, digital wills are not allowed this benefit yet as per information technology act in India, we hope that digital will makers in India will be allowed to provide e-signature services like this that more and more Indians can easily create a will to protect their loved ones.”

Vikas Garg, Co-Founder and CEO, Paytail said, “The budget for 2023-24 is going to play a proactive role in paving the way for the growth of fintechs in line with the growth of MSMEs where digital expansion is central. Fintech companies are navigating the country’s path towards financial inclusion, where robust techstack in combination with the the strong distribution network will ensure the availability of financial products throughout the country. As one of the actors operating in the fintech environment, we hope for tax subsidies that will support more investments in the fintech sector, thus facilitating the creation of innovative technologies for better credit provision. as far as regulation is concerned, a dedicated regulatory body for the fintech domain will provide a more comprehensive idea in framing credit policies to ensure proper risk management and reduce delays.Also as India outperforms global growth of digital transactions, it can invest heavily in the same wise proved to be fruitful when it comes to providing credit to the underserved and unrenewable tted business institutions and individuals.”

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