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Here Is What Fintech Industry Expecting From Union Budget 2022
The budget holds high significance as it helps in building momentum in the equity markets. The industry leaders are arguing that the government should consider every possible way that can lead to the growth of the sector.
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As the Indian economy moves towards the path of recovery and growth post the pandemic, the fintech industry has urged Finance Minister Nirmala Sitharaman to provide relaxation in the tax regime for financial sector startups, amid the Union Budget 2022.
The budget holds high significance as it helps in building momentum in the equity markets. The industry leaders are arguing that the government should consider every possible way that can lead to the growth of the sector. As expectations from the Union Budget 2022-23 are at an all-time high, let's see what industry leaders have to say. Edited excerpts:
"It is heartening to see the government's recognition of fintechs’ ability to reach out to the unserved and underserved sections of the country, as evident from multiple initiatives in recent times. To further scale financial inclusion, it is essential that the government’s support is directed towards boosting digital infrastructure and innovation. Additionally, policy and regulatory efforts should be aimed at creating a favourable investment environment. While ensuring an appropriate degree of regulation, easing the investments in unlisted private businesses, especially in non-metro cities is crucial for convenient capital flow to technology start-ups towards their healthy growth. In the same respect, reducing the entry limits for Alternative Investment Funds (AIFs) and syndicates, aligning with the Government's allocation to priority sectors, will ensure fund infusion to businesses," said Co-founder and CEO at Cashfree Payments, Akash Sinha.
"Given the enormous increase in medical expenses due to COVID-19, we urge the government to hike the standard deduction from the current Rs 50,000 to Rs 1,00,000. This will further lower the tax burden and put more money in the hands of the salaried class. The government should remove the concept of speculative income and restrict income classification arising from capital market transactions to business income, long-term capital gains and short-term capital gains. We hope that the government considers tax exemption up to Rs 1,00,000 lakh on short-term capital gains tax as well as tax exemption on dividends up to Rs 50,000 for senior citizens," said Director at Upstox, Puneet Maheshwari.
"Despite the obvious pandemic-induced impediments, economic recovery and expansion are still on track, and we seem to be moving closer to the US$5 trillion targets. This is in no small part due to the recovery measures taken by the Government of India since 2016. Positive indicators in the stock market could also be interpreted as signs of progress. In addition, December 2021 saw robust GST collections of Rs.1.3 lakh crores, indicative of an era of monthly figures consistently above the Rs.1 lakh-crore mark. On the flip side, persistent and high inflation in retail and wholesale leaves the economy in a precarious position. For consumers and salaried employees, simple tax-related exemptions and benefits would be welcomed this year. The expectation is for the government to reward and sustain fintech intervention to bolster India’s position as a global growth leader," said Chief Executive Officer (CEO) at BCT Digital, Jaya Vaidhyanathan.
"We expect the Union Budget 2022 to further layout concrete measures for expanding digital infrastructure in the country that will lead to speedy transactions and will encourage Fintech companies to create new digital offerings for people. In order to achieve greater financial inclusion, tax incentives to merchants/ companies who are empowering people with digital onboarding and payments in Tier II and III cities and rural India can be offered which can be a key driver. We expect significant policies to be announced that may lead to an increase in large-scale penetration of credit instruments in Tier II and III cities and rural India, and spur demand in the economy. We firmly believe that substantial improvement in digital infrastructure and advanced payment technology will eventually help in building a cash-free economy," said Head of Payments, APMEA Region, FIS, Muralidharan Srinivasan.
"The government’s recognition of the enhanced operations and effectiveness of fintechs to reach out to the unserved and underserved population, as evident from multiple initiatives in recent times, is encouraging. We expect this emphasis to become more prominent in the upcoming budget. It is essential that the Government announce measures to ease the liquidity flow to NBFCs and fintechs. Further, while ensuring the right degree of regulation, relaxation of norms and tax liberalization to some extent will allow the fintech sector to boost their reach and operate effectively to offer innovative credit solutions to the borrowers. The focus should also be on enhancing the country’s digitization bid, to empower the consumers to avail various credit products," said Co-founder and CEO at KreditBee and Co-founder of FACE, Madhusudan Ekambaram.
"Small and Medium enterprises are the most vulnerable and have been badly affected during the pandemic and will need special attention from the government. With the roll-back of the farm bill, there can be some announcement in the budget to compensate small farmers who were benefitting from the bill. Some relief for taxpayers is likely ahead of important state elections. Incentives to boost the economy and nudge the private sector to invest more are expected. Infrastructure will continue to be the focus area," said CEO at TradeSmart, Vikas Singhania.