New Delhi: Finance Minister N. Sitharaman is all set to present her third Union Budget on February 1st. This year, the Budget likely is to focus on the government making strides through several initiatives, including the recently set up Fintech Department and the introduction of the Payment Investment Development Fund (PID) to incentivize fintech in India.
Also, NBFC (Non-banking financial companies) and financial technology (fintech) are expecting to see more opportunities from the Center to expand the market scope and scale and impact long-term changes in the financial industry.
Leading fintech players and startups have shared their thoughts on what are they expecting from the Budget this year.
Here are the expectations:
Saran Nair, Chief Business Officer, Coin Switch Huber: "Various macroeconomic developments in India and the world over the last year have led to a rise in crypto adoption in India. Today, leading crypto exchanges follow strict self-regulatory practices to ensure customer protection. We hope the upcoming Union Budget will bring in regulatory clarity and help standardize best practices, address misconceptions around this emerging asset class. We believe a regularized environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government's vision."
Keaton Patel, CEO, M swipe: "The SME (small and medium enterprises) sector is the backbone of the Indian economy. In the upcoming Budget, we expect the government to make announcements that will empower small businesses, thereby reviving the economy from the impact of the pandemic. In November 2021, the government announced the Special Credit Linked Capital Subsidy Scheme for the MSMEs (Micro Small and Medium Enterprises) in the services sector. This should be extended to SMEs whose turnover is less than ₹ 5 crore, as it will help them procure service equipment through institutional credit for the advancement of their technology. The government should also look at tax breaks for companies providing technology support to MSMEs. At a time when we are expecting the third wave of Covid to hit economic activity and businesses are facing difficult times, the government must take measures to meet the SME lending requirements. Subsidizing the cost of funds to NBFC that focus on lending to small merchants for loans below ₹ 20 lakh is a way to ensure easy access to credit. Besides, we expect the Finance Minister to increase credit guarantee for lending while also providing relief in terms of tax sops or subsidizing manpower costs for digital players to promote digital payments in tier 3 to 6 towns. Lastly, this Budget should further look at propelling the country towards a digital future."
G. Singh, CEO Tide(IN): "This is the third year of the pandemic and MSMEs have been struggling all through since early 2020, several small businesses had to downsize or shut shop as they were challenged by severe liquidity crunch and dipping demand. Being central to the economy, MSMEs need assistance to be back on track, and the government can provide that much-needed support through a stronger policy thrust. Unavailability of working capital, cost of compliance and taxation are potential challenges that need to be addressed. We are looking forward to a budget that will further push for digitization. Significant spending and allowances for infrastructure, especially digital banking infrastructure, will also be an important ingredient for the success of both, the budget and MSMEs. These steps can boost financial inclusion to a great extent. Lastly, steps with a focus on new businesses and enabling entrepreneurship are key to provide the much-needed impetus for the sector."
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