All eyes will be on Finance Minister Nirmala Sitharaman as she unveils the Union Budget 2022 on February 1. The financial technology (fintech) industry has had a phenomenal year, with Covid restrictions forcing people to stay and manage everything from home. The government has consistently pushed for digital transactions and the use of technologies such as the Unified Payment Interface (UPI), which was one of the goals of the demonetization announcement in 2016. Since then, smartphones have become a valid mode of financial transactions. Mobile wallets and other forms of digital payments are made through smartphones.
Fintech companies are also using smartphones to provide instant financial services to users like approving loans, activating stock trades, etc. Around 44 billion digital payments were recorded across India in 2021.
Here’s what the fintech industry expects from the 2022 budget
“The year 2021 has been a phenomenal year for the Indian fintech and startup industry. With over 40 startups achieving unicorn status during the year, the startup industry has witnessed phenomenal growth India has seen a continued explosion of digital payments and increased adoption of digital payment methods,” Murali Nair, President-Banking at Zeta.
“Given the surge in digital payments, the budget should consider providing tax incentives to consumers, merchants, and ecosystem enablers. To accelerate innovation in the fintech space, the budget should support more partnerships between banks and fintechs – this will help push the economy towards financial inclusion.We expect the budget to include support initiatives to deliver a modern payments framework that can ensure high-quality performance while preparing for the next wave of transformation,” he said.
To enable access to digital financial services for all, Sumit Gwalani, co-founder of Fi – a neobank created for working professionals – said the budget can encourage the adoption of technologies such as UPI and account aggregator in the financial sector through partnerships with digital services. suppliers either through direct funding or through tax incentives.
“While the Reserve Bank of India (RBI) has paved the regulatory way for innovations such as UPI and Account Aggregator, the budget can encourage the adoption of these technologies in the financial sector through partnerships with digital service providers, either through direct funding or through tax incentives,” he said.
Take a look at what others have to say
Vineet Tyagi, Global CTO, Biz2X
In the spirit of technological innovation and digital transformation, we hope that through the Union Budget 2022-2023, the government will bring about game-changing reforms, new policies and regulations that will provide relief and tax breaks for MSMEs and the entire startup ecosystem. In 2022, we expect the government to focus more on developing digital infrastructure to improve customer experience, credit quality and streamline financial entity growth in FY22-23.
Vivek Banka, founding team, goalkeeper
Be it personal taxes, corporate taxes or capital gains taxes, the system should be simplified and gradually reduced, as the government itself said earlier. The focus should continue to be on greater transparency, greater compliance and ultimately simpler rules for doing business.
Amit Damani, Credit Fair
“The government needs to find the right balance between stimulating economic growth and consolidating its finances. We hope it will be a fiscally responsible budget, as inflation has increased and this could lead to higher rates. interest rates, which would be a headwind for fintechs Moderate interest rates, particularly in government bonds and fixed deposits will be needed to boost investment lending, SMEs and fintech as a creator of alternative assets, we hope that the budget will encourage individuals to diversify their portfolios and allow pension funds to invest in a wider range of fixed income securities or equity assets that have been created by fintechs . »
Nikhil Sahni, Division President, South Asia, Mastercard
A few actors believe that timely government measures have supported the recovery of MSMEs as they have been hit hard by the Covid-19 pandemic, but this momentum should be continued to support their recovery. “We must build on our momentum by giving small businesses innovative digital finance solutions such as supply chain finance, subsidizing loan insurance for financial institutions that serve MSMEs and continuing to simplify GST slabs to further strengthen the area. Incentivizing asset-light innovations can enable millions of small business owners to adopt and benefit from digital payments,” said Nikhil Sahni, President, South Asia Division, Mastercard.
Suhail Sameer, CEO of BharatPe
Fintech major BharatPe CEO Suhail Sameer has urged the government to reduce the merchant discount rate (MDR) for online and card payments. Sameer also noted that the government should consider making the MDR void or offering incentives or subsidies to small merchants accepting card payments.
“Today, fintech companies are working closely with MSMEs and offline merchants to fund their digital acceleration through easy access to credit. Uncertainties are set to continue with further waves of Covid-19 and businesses will experience sudden changes in the opening and closing of economies. In the next budget, I hope the government will put in place conducive policies that will further enable fintechs to address the credit gap in the country,” said the CEO of BharatPe.
Archit Gupta, Clear CEO
As the government awaits the Cryptocurrency Bill, much-needed clarification is expected on its taxation in the upcoming Union Budget 2022. applicable taxation, TDS/TCS and GST implications on the sale and purchase of cryptocurrencies, etc., which we hope will be clarified during the budget.