Union Budget 2023: Fintech sector in for a period of growth as Sitharaman expands DigiLocker services
The Indian the fintech sector has been a driving force behind the country’s economic growth. With around 6,600 fintech startups, the sector is a leading contributor to financial literacy and inclusion in India. The Union Budget announcement by the Finance Minister Nirmala Sitharaman, was well received by the industry, especially with the extension of DigiLocker services to the fintechs and MSMEs they support. The budget also included several benefits for MSMEs such as the credit guarantee scheme with an infusion of Rs 9,000 crore, the extension of ECLGS till March 31, 2023, the RAMP program with an outlay of Rs 6,000 crore, and a credit of Rs 2 trillion under the CGTMSE- arrangement. These initiatives, along with digital services such as Prime Minister Jan Dhan Yojana, Indian Stack and UPI, are driving the fintech industry towards sustained growth.
Here’s what top industry leaders have to say Union Budget 2023 announcement.
Pramod Kathuria, Founder and CEO, Easiloan
The outlay for the PMAY scheme has been increased to Rs 79,000 crore, which is a significant increase of 66%, such a huge expansion in funding for the program that will help the government in its goal of housing for all by providing affordable housing to more people and contributing to the general growth and development of the country, the overall budget is a significant boost for capital goods and infra businesses. The increased investment will increase economic growth and provide employment opportunities as well.
The Union Budget 2023-24 reflects that the government has deeply embraced the digital revolution in the fintech sector and promotes the use of digi locker for documentation. Collection and retrieval of relevant documents for customer verification and identification is a key area that we as Digital mortgage marketplace Easiloan want to optimise. We are happy that the government’s new budget is a step in the same direction. Extending Digi locker services to the Fintech sector will be a big boost for individuals, banks and financial institutions to store and share data online in a secure and faster manner. In addition, the government’s decision to set up 100 laboratories in engineering institutions for the development of apps using 5G services will usher in new opportunities that open up various opportunities.
Rajagopal Menon, Vice-President, WazirX
The Indian Union Budget 2023 made no changes to existing crypto taxes, leaving Indian crypto companies on the Stairway to Heaven. There is persistent uncertainty due to high taxes and a lack of a solid regulatory framework that stifles progress in the industry. The budget will have no more negative consequences for the crypto industry. Since 2017, last year was the worst year on record; any change will be for the better. Trading volumes on Indian exchanges may remain flat at the bottom.
We hope that the government will reconsider its stance on crypto taxes and work with the industry to create a regulatory framework that supports and encourages growth. We believe that with the right support and guidance, the crypto industry can play an important role in driving innovation, job creation and achieving the $5 trillion economy dream of an Atmanirbhar Bharat.
Sameer Aggarwal, CEO and Founder, Revfin:
The government’s dedication to ‘green growth’ approach to promote environmental sustainability, as emphasized by Finance Minister Nirmala Sitharaman in the recent Union Budget 2023, is a commendable development. The emphasis on reducing carbon footprints and creating employment through green growth initiatives demonstrates a deep understanding of the interdependence between the environment and the economy. The 7 main priorities, referred to as “Saptrishi,” will drive sustainable and eco-friendly economic development, and this is truly in the direction of India seeking a leadership role in mitigating the global climate crisis.
The budget is very positive for the rural economy as it talks about investment and credit schemes in agriculture, fisheries, cattle etc. and this will give higher income to rural people and now they can have higher capacity to have L5 (e rickshaw for commercial purpose) and better capacity to repay EMI. Duty exemptions are extended to include imports of capital goods and machinery required for the production of lithium-ion cells for batteries used in electric vehicles to further enhance green mobility.
Govind Sankaranarayanan, Co-Founder and COO, Ecofy:
It is encouraging that green growth was identified as one of the ‘saptarishis’ or pole stars that give direction to the economy. The allocation of 35,000 crore for the green capital expenditure is a big and explicit confirmation of the government’s commitment to net zero. The duty exemption on inputs for the production of lithium-ion batteries and the plan to replace government vehicles will help EV growth. By choosing to expand the credit guarantee scheme for SMEs, these companies will become part of the green transition. The tax exemptions on biogas-mixed CNG will also accelerate the growth of waste to the energy sector.
I’ve always believed that in a developing country the government needs to drive capital spending, so the 33% increase in capex should be an engine for much-needed post-pandemic job creation. The reduction in direct taxes should help us grow by the 6.5% projected.
Sagar Agarvwal, Co-Founder and CEO, Beams Fintech:
This year’s budget has been quite positive for the startup ecosystem. The extension of incorporation deadline for IT incentives provides an additional push to the Indian startup ecosystem. More importantly, the extension of the carry-forward period for changes in shareholding from 7 years to 10 years makes start-up acquisitions more attractive, supporting consolidation in the industry and thereby enabling exit opportunities for entrepreneurs and investors. Announcements of PAN being the common business identifier and expansion of Digilocker’s scope will further lead to some reduction in compliance costs for banks, NBFCs and fintechs. Given that more startups today are focusing on SMEs, we are also excited about the Rs. 9,000 Cr renewed credit guarantee scheme. Access to low-cost funding will help SMEs grow faster, creating enormous value for the startup ecosystem that exists around it.
However, we also expected to see some more changes specific to the PE/VC investment industry, hoping to get favorable changes around LTCG, carried interest etc. We hope that the Indian government will follow up with some relaxations for investors in the coming financial year
Ashwin Chawwla, Founder and CEO, Escrowpay:
The Government of India has proposed the use of Aadhaar-based Unique Identity Number (UID/UAN) as a common identifier for all digital systems of specified government agencies. This will enable the government to identify individuals across different agencies without having to maintain separate records for each agency. PAN will be the only identifier and will help stop multiple submissions for MSMEs.
The UID/UAN will be used to securely store and access personal data about residents, and to facilitate access to public services. In addition, it will also enable the authorities to better track the use of public services, improve public services and reduce fraud and corruption.
Sameet Chavan, Chief Technical and Derivatives Analyst, Angel One Ltd:
Market seems to have given thumbs up to the budget. We have already managed to regain the 17800 mark which was compromised last Friday. Now today’s finish will be quite decisive. If Nifty managed to stay above 18000, we should brace ourselves for a strong rally in the coming days.
Anuj Arora, Co-Founder and COO SahiBandhu:
During the Union Budget 2023, Nirmala Sitharaman mentioned increase in customs duty on gold, silver and diamond. If the market price of gold increases, people who want to use loans against the gold will receive a higher loan amount for their gold that is sitting idle at home. We encourage Bharat citizens to make the most of this opportunity to avail formal loans with SahiBandhu Gold Loan and further the Saptrishi goal of financial inclusion
Here’s what top industry leaders have to say Union Budget 2023 announcement.
Pramod Kathuria, Founder and CEO, Easiloan
The outlay for the PMAY scheme has been increased to Rs 79,000 crore, which is a significant increase of 66%, such a huge expansion in funding for the program that will help the government in its goal of housing for all by providing affordable housing to more people and contributing to the general growth and development of the country, the overall budget is a significant boost for capital goods and infra businesses. The increased investment will increase economic growth and provide employment opportunities as well.
The Union Budget 2023-24 reflects that the government has deeply embraced the digital revolution in the fintech sector and promotes the use of digi locker for documentation. Collection and retrieval of relevant documents for customer verification and identification is a key area that we as Digital mortgage marketplace Easiloan want to optimise. We are happy that the government’s new budget is a step in the same direction. Extending Digi locker services to the Fintech sector will be a big boost for individuals, banks and financial institutions to store and share data online in a secure and faster manner. In addition, the government’s decision to set up 100 laboratories in engineering institutions for the development of apps using 5G services will usher in new opportunities that open up various opportunities.
Rajagopal Menon, Vice-President, WazirX
The Indian Union Budget 2023 made no changes to existing crypto taxes, leaving Indian crypto companies on the Stairway to Heaven. There is persistent uncertainty due to high taxes and a lack of a solid regulatory framework that stifles progress in the industry. The budget will have no more negative consequences for the crypto industry. Since 2017, last year was the worst year on record; any change will be for the better. Trading volumes on Indian exchanges may remain flat at the bottom.
We hope that the government will reconsider its stance on crypto taxes and work with the industry to create a regulatory framework that supports and encourages growth. We believe that with the right support and guidance, the crypto industry can play an important role in driving innovation, job creation and achieving the $5 trillion economy dream of an Atmanirbhar Bharat.
Sameer Aggarwal, CEO and Founder, Revfin:
The government’s dedication to ‘green growth’ approach to promote environmental sustainability, as emphasized by Finance Minister Nirmala Sitharaman in the recent Union Budget 2023, is a commendable development. The emphasis on reducing carbon footprints and creating employment through green growth initiatives demonstrates a deep understanding of the interdependence between the environment and the economy. The 7 main priorities, referred to as “Saptrishi,” will drive sustainable and eco-friendly economic development, and this is truly in the direction of India seeking a leadership role in mitigating the global climate crisis.
The budget is very positive for the rural economy as it talks about investment and credit schemes in agriculture, fisheries, cattle etc. and this will give higher income to rural people and now they can have higher capacity to have L5 (e rickshaw for commercial purpose) and better capacity to repay EMI. Duty exemptions are extended to include imports of capital goods and machinery required for the production of lithium-ion cells for batteries used in electric vehicles to further enhance green mobility.
Govind Sankaranarayanan, Co-Founder and COO, Ecofy:
It is encouraging that green growth was identified as one of the ‘saptarishis’ or pole stars that give direction to the economy. The allocation of 35,000 crore for the green capital expenditure is a big and explicit confirmation of the government’s commitment to net zero. The duty exemption on inputs for the production of lithium-ion batteries and the plan to replace government vehicles will help EV growth. By choosing to expand the credit guarantee scheme for SMEs, these companies will become part of the green transition. The tax exemptions on biogas-mixed CNG will also accelerate the growth of waste to the energy sector.
I’ve always believed that in a developing country the government needs to drive capital spending, so the 33% increase in capex should be an engine for much-needed post-pandemic job creation. The reduction in direct taxes should help us grow by the 6.5% projected.
Sagar Agarvwal, Co-Founder and CEO, Beams Fintech:
This year’s budget has been quite positive for the startup ecosystem. The extension of incorporation deadline for IT incentives provides an additional push to the Indian startup ecosystem. More importantly, the extension of the carry-forward period for changes in shareholding from 7 years to 10 years makes start-up acquisitions more attractive, supporting consolidation in the industry and thereby enabling exit opportunities for entrepreneurs and investors. Announcements of PAN being the common business identifier and expansion of Digilocker’s scope will further lead to some reduction in compliance costs for banks, NBFCs and fintechs. Given that more startups today are focusing on SMEs, we are also excited about the Rs. 9,000 Cr renewed credit guarantee scheme. Access to low-cost funding will help SMEs grow faster, creating enormous value for the startup ecosystem that exists around it.
However, we also expected to see some more changes specific to the PE/VC investment industry, hoping to get favorable changes around LTCG, carried interest etc. We hope that the Indian government will follow up with some relaxations for investors in the coming financial year
Ashwin Chawwla, Founder and CEO, Escrowpay:
The Government of India has proposed the use of Aadhaar-based Unique Identity Number (UID/UAN) as a common identifier for all digital systems of specified government agencies. This will enable the government to identify individuals across different agencies without having to maintain separate records for each agency. PAN will be the only identifier and will help stop multiple submissions for MSMEs.
The UID/UAN will be used to securely store and access personal data about residents, and to facilitate access to public services. In addition, it will also enable the authorities to better track the use of public services, improve public services and reduce fraud and corruption.
Sameet Chavan, Chief Technical and Derivatives Analyst, Angel One Ltd:
Market seems to have given thumbs up to the budget. We have already managed to regain the 17800 mark which was compromised last Friday. Now today’s finish will be quite decisive. If Nifty managed to stay above 18000, we should brace ourselves for a strong rally in the coming days.
Anuj Arora, Co-Founder and COO SahiBandhu:
During the Union Budget 2023, Nirmala Sitharaman mentioned increase in customs duty on gold, silver and diamond. If the market price of gold increases, people who want to use loans against the gold will receive a higher loan amount for their gold that is sitting idle at home. We encourage Bharat citizens to make the most of this opportunity to avail formal loans with SahiBandhu Gold Loan and further the Saptrishi goal of financial inclusion
