Union Budget Wish List For The Indian Fintech Sector

In the past decade, the significance of the Union Budget has declined as managing a growth-driven economy demands frequent reforms and initiatives. For a country at the cusp of being the most populous nation globally, with one of the largest working-age populations, improving social metrics and low per capita credit access, the focus has been on developing a sustainable, formal, affordable, and inclusive financial services ecosystem. A flurry of reforms has already hit the financial services, and fintech sectors post the previous year’s budget, namely regulatory, compliance and transparency measures. Growth has been a 365X24 hours agenda for a nation on the road to becoming a USD 10 trillion economy. Therefore, my budget wish list may not be limited to the budget day but can unveil over the next few months. 

1. Disruption without a roadmap destroys: Nothing hurts more than the intent to do good in bits and pieces. Being a nascent sector, still learning the ropes, fintechs must be nurtured consistently. Without sharing the big picture, arbitrary changes in tranches hurt business continuity. While I am sure fintechs love to embrace disruptions as they accelerate the growth path, there is indeed clarity needed from the Government of India on its vision around the regulatory compliance roadmap. More importantly, once the clarity is imparted, due time must be conferred for adoption.
   
2. Reward the deserving: UPI has become the country's gold standard of contactless real-time payments. In the past few months, the Indian Government’s cornerstone of digital India has found much deserving fame in the global media and power corridors. As the Government is initiating the global roll-out of UPI as the next growth chapter, I wish that the that the UPI incentives will continue for a long time. In other words, the core implementation champions of an ambitious scheme (read as the fintechs) should be given their due rewards in terms of incentives and reimbursements from banks. This will further strengthen the partners' commitment to helping the government achieve its next big hairy audacious goal in the future. On the other hand, the incentives will also ease the road to profitability for the fintechs. 
3. Make (IT easy) in India: Fintechs find it easier to understand the bleeding edge technology but extremely hard to decipher income tax. As an Indian, I am proud to acknowledge that the ease of doing business has seen a welcome change. However, some issues, mainly taxation, remain an eternal bane. My third wish is – uncomplicated taxation for new-age companies. I am quite sure the questions being pondered by the Hon’ble finance minister will be how to consolidate, optimise or rationalise multiple taxations. Given that GST comprises a significant cost for service providers, especially in the absence of GST inputs, there is an urgent need to reduce the tax bracket. The reduction in GST rates for service providers will have a positive domino effect on accelerating affordable financial inclusion for millions of Indians.

To round off my wish list, inclusion can’t be achieved without incentivising the process. Take investments and how a sustainable and scalable market was created using tax incentives and exemptions. Such incentives and exemptions must be strategically rolled out across the credit and investment cycles of small-ticket consumers and facilitators for India to become a genuinely inclusive and dominant growth-led economy in the next decade.