Budget 2022: Fintech sector wants tax reforms, measures to ease credit disbursement to small biz

Budget 2022: Fintech sector wants tax reforms, measures to ease credit disbursement to small biz

FPJ Web DeskUpdated: Monday, January 31, 2022, 11:40 PM IST
Digital payment ecosystem can unlock value for MSMEs by helping them expand customer base, improving cash flows, says fintech sector. / Representational image | Photo credit: Pixabay

With the government making strides through several initiatives including the recently set up Fintech Department and the introduction of Payment Investment Development Fund (PIDF), the sector is expecting to see more opportunities and initiatives being taken forward by the government that will help in the expansion of the market, influence customer behaviour, and impact long-term changes in the financial industry.

Aditya Damani, Founder, Credit Fair

The government needs to play a fine balancing act between spurring economic growth while consolidating its finances. Subdued interest rates especially in government bonds and fixed deposits will be needed to spur capex, SMEs and fintech lending. As a creator of Alternative Assets we hope the Budget will nudge individuals to diversify their portfolio and enable pension funds to invest in a wider range of fixed income or equity assets that have been created by fintechs.

Aloke Bajpai, Group CEO & Co-founder, ixigo-AI-based online travel portal

We are looking forward to the government strategising a sustainable long-term plan to help revive international travel which is currently disrupted by ongoing waves. The introduction of innovative initiatives like the ‘sandbox schemes’ currently being followed by countries like Thailand and Indonesia will help India build a more resilient tourism economy going forward. We also expect the upcoming Budget to allot incentives for domestic tourism and promote it within the country. IT deductions on domestic travel and tourism spends will help incentivize tourism and boost domestic travel further. Tax breaks and waivers for the airline sector will also help aid faster recovery of the industry. Bringing ATF under the ambit of GST (which currently comprises 40-45 percent of the total operating cost of an airline) will bring much-needed relief to the aviation sector.

Amit Das, CEO and Co-founder of Think360.ai – parent Company of Kwik.ID.

As a growing startup focused on financial services, AI and innovation, we hope this year’s budget is focused on rapid growth across these sectors, while also laying down some more foundational rails for continued growth and resilience. 1) Budgetary provisions for foundational data and information technology infrastructure – these rails, over the next decade, will unlock significant opportunities for growth and economic development, and an opportunity for us to be the next world leader. They are essential for cross-country distribution of opportunities, capital, wealth, and growth. 2) Setting up focused financial institutions and sandboxes that drive innovation, and drive public-private partnerships. The benefits of these lead to a chain reaction of opportunities. For example, bringing private innovation indirectly benefits transfer through blockchain and digital currency-led innovations.

Amit Nigam, COO & Executive Director, BANKIT

The expected outcome of the efforts of Fintech industries is to make people rely on uncomplicated, safe, and one-stop-solution services. Fintech industry is based on technology and innovation. With a huge investment on IT infrastructure and manpower, we are expecting tax relaxations on these investments.

Anand Kumar Bajaj, Founder, MD & CEO, PayNearby

The digital payments space has proved its mettle as a stable growth avenue during the pandemic. To ensure the same benefits reach the less-savvy citizens, our government could waive GST and TDS for financial inclusion services at Business Correspondent (BC) outlets across India. We sincerely hope that TDS for income below Rs 50,000 a year can be waived off.

Anuj Khosla, Chief Executive Officer – Digital Business, Hitachi Payment Services

The Budget 2022 should incentivise the MSME sector to adopt digital payments progressively. The digital payment ecosystem can unlock value for MSMEs by helping them expand customer base, improving cash flows through faster realization of funds, providing upsell opportunities, reducing costs and creating a digital footprint that would enable easy access to credit at cheaper rates. With the impact of the pandemic and the shift towards online purchases and adoption of digital payment modes by consumers, MSMEs need to be adequately equipped to cater to changing customer needs and behaviour while enabling them to thrive in an evolving digital landscape.

Arun Nayyar, Chief Executive Officer, NeoGrowth Credit Pvt Ltd

In the upcoming Union Budget 2022-23, we expect to see initiatives that would further strengthen the financial inclusion of MSMEs in India and encourage digitisation. With the third wave upon us, we expect to see an extension on priority sector lending to NBFCs by banks extending credit to underserved and unserved MSME segments. To boost adoption of digital payments by the MSME sector, we would like to see the introduction of incentives such as tax breaks for merchants who adopt digital payments.

Ashraf Rizvi, Founder & CEO, Gilded

The Union Budget should be looking at formulating transparent guidelines for investor protection and chalking out a clearly defined regulatory framework consistent with other parts of the gold industry. Currently, capital gains on profits from the sale of gold can be as high as 20 percent compared to profits on shares taxed at 10 percent. An alignment among the tax regimes for investments would give investors greater flexibility in choosing the assets that best fit their needs as a store of value and foundation for wealth creation. The government can bring in proper regulatory guidance, framework, and business incentives, and pave the way for India to become a leader in developing the capabilities, technology, and infrastructure necessary to digitize physical gold assets.

Ashish Jain, Head Treasury and Dy Chief Financial Officer, LoanTap

While the government did take a supportive stance in 2021, the expectation from Budget this year would be more backing in terms of easy availability of funds, tax SOPs and enhanced regulatory framework. In spite of making a big impact on the overall economy, fintech industry doesn’t enjoy the level of liquidity which is otherwise available to large traditional Financial Institutions. We need the government to encourage banks to work alongside Fintech NBFCs and resume funding for them and look for parameters beyond ratings. Allowing refinance benefits to Fintech NBFCs can be a step towards the right direction. The government must continue to supplement its credit support programs to continue to empower the NBFC segment.

Ashish Nayyar, Co-Head, OakNorth India

We hope that urgent policy intervention through the upcoming Budget doesn’t just support livelihoods in the near-term but also establishes a sustainable future framework based on quality public education and skill development, that facilitates upward occupational, and therefore economic, mobility of the masses. We look forward to further reforms being announced in the areas of taxation, promoting a favorable compliance and regulatory environment, and simplifying investment avenues along with measures to ease credit disbursement to small businesses.

Akash Sinha, Co-Founder & CEO, Cashfree Payments

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 favorable 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.

Anil Pinapala, CEO & Co-Founder, Vivifi India Finance

I hope to see a strong mandate for financial inclusion and assistance from the GoI for startups attempting to bring in credit for all transcending language, literacy, location, livelihood like FlexPay. Relaxation in norms and assistance with liquidity to lending NBFC fintechs who are attempting to offer credit to the under-served and unserved would be a welcome move. I also hope that non-prime lending could be brought under priority sector so that NBFCs can truly work to bring credit to all.

Ankur Gupta, Founder and CEO, Ruptok Fintech Private Limited

Budget 2022 should introduce regulations that will help in greater credit access to people and curbing illegal activities while building trust in the digital lending process for the last mile. In line with the government’s goal of creating a digital economy, introducing credit schemes will incentivize the sector and help in providing timely credit to customers that have struggled due to the lack of credit accessibility through traditional means of lending which has directly affected their business opportunity. Increase tax benefits on Gold Loans. We expect the government to introduce regulatory changes that would create an easy line of access for start-ups & MSMEs to secure credit from online lending players. This will further help in boosting our economy.

Amit Ratanpal, Founder & MD, BLinC Invest

Indian capital market has seen seminal reforms over the last decade. However, taxation on long-term capital gains (LTCG) acts as a big deterrent for low and middle-income groups that want to invest in the market. Reduction in taxes on LTCG will incentivize this segment of customers, thereby, increasing their participation in the capital markets. Additionally, the government should allocate some budget for providing credit to SMEs (for multiple use cases such as supply chain, working capital, etc.) through a transparent process that is managed and monitored by a Public-Private Partnership.

Anshuman Narain, Vice-President, CashBean (P.C.Financial Services Pvt Ltd.)

The main impetus that finfech needs today is the further dignification of India through state investment in e-infrastructure. A lot of the country is still behind in terms of high-speed internet access and while private players have proliferated the internet, a state-focused effort in this direction will provide manifold growth to the tech industry (and subsequent tax accruals for the government).

Bhavin Patel, Co-founder & CEO, LenDenClub

The economy is projected to gradually return to its previous trajectory, with fiscal priorities in the upcoming Budget invigorating it. A regulatory body to oversee payment recovery is the need of the hour. An enhanced procedural aid to the legal recovery of repayments from digital borrowers to further protect the rights of those who lend money. Such a specialized government vehicle to oversee fintech could not only help startups run more effectively, following compliance requirements, but it would eliminate possible fraudsters.

Returns from investments in Peer-to-Peer (P2P) Lending could be exempted from tax under Section 80C of Income Tax law, or a different provision could be carved out to reduce tax rates such as tax exemption for gains below Rs 20,000. This will encourage people across geographies to invest in P2P lending, making funds accessible on multiple platforms.

Darsh Goleccha, Founder and CEO, Monechz

Focus areas of the current Budget will be the EV & Green energy initiatives will be of high focus point with schemes. To facilitate the same to be promoted, finance minister should focus on offshore energy storage. Indian Mobility will be one of the highlights of this government policy, with tax breaks on manufacturing, consumption to be extended and new schemes may be launched. There will be clarity on creator taxations and gains from creator purchases and digital assets likely be announced. Spending on digital infrastructure will increase, whereas physical infrastructure may continue to have a standard budget allocation and hike with Technology Media Telecommunications being the major focus. FinTech policy and regulations may get stricter, however, some extensions and initiatives may be announced to promote cooperation between banks and FinTechs. Expect a policy around international, startup IPOs to be released and startup index launch. Government regulations around Cryptocurrencies might be light however some policies might be floated for testing purposes.

Deena Jacob, Co-Founder and CFO, Open Financial Technologies Pvt. Ltd

As the economy limps back from the impact of the pandemic, three things are extremely crucial to fuel growth; Re-skilling and upskilling for the workforce who lost their livelihoods, ease of consolidation for ailing businesses and flow-based and revenue based credit to boost the recovery of impacted sectors. The talent pool to match the newer models and technology is putting a huge strain on the cost of product developments, whereas a lot of talent can be tapped and groomed for growing sectors. This should be done through a public private partnership with a job-oriented curriculum run in partnership with the companies in the high growth new age sectors and rolling out tax holidays, incentives, GST exemptions and subsidies for qualified job-based training programs run by private sector companies, also with focus on tapping talent from tier 2 and tier 3 regions.

Dr. Rashi Gupta, Chief Data Scientist and Co-Founder, Rezo.ai

We anticipate a next-generation reform budget in this year's Budget, which will boost startup confidence in the country. We urge the Indian government to consider launching more incubator and accelerator programs to help companies across the country. We also request them to look at FDI tax relief measures so that startups all throughout the country can access foreign capital with more ease.

Dilip Modi, Founder, Spice Money

Union Budget 2022-23 should ensure there’s a special focus on bolstering rural development. Exemptions on procurement of point of sale terminals, GST rates for rural banking agents remitting funds among households, and subsidies to compensate for merchant discount rate (MDR) waiver are among some of the measures that will help in promoting digital awareness and initiatives across the country.

Fintech Association for Consumer Empowerment (FACE).

This year, we expect the Budget for this sector to be pragmatic and progressive for our economy to reach the $5 trillion goal by 2025. As fintechs and digital lenders continue to innovate to address the credit gap in India, the 2022 Budget needs to focus on: Making provisions to increase liquidity for NBFCs and digital lenders to widen the scope of credit access. This could be having banks to have larger exposure for digital lenders. Enabling the lending ecosystem to have access to low-cost funds to lend with more confidence; addressing liquidity for small and medium NBFCs and digital lenders- a possible solution is to encourage co-lending partnerships between banks and digital lenders; enabling the lending ecosystem to have access to low-cost funds to lend with more confidence. Allow insurance companies to have exposure to digital lenders in the MSME / SME space.

George Sam, Business Head & Co-Founder, Mindgate Solutions

With India's digital economy picking up, we expect the government to continue its efforts in encouraging the digital payments ecosystem in the Union Budget 2021-22. Like last year's fund for incentivizing the industry and offset losses incurred due to waiver of Merchant Discount Rates (MDR) on UPI and RuPay transactions, we hope the finance minister will take further actions to minimize translational costs, thereby promoting large ticket size payments in the B2B segment. One such critical step is expected to come through a push towards prepaid transactions through UPI. With the digital payment industry playing an instrumental role in ushering transparency and formalization of the economy, the government is expected to promote the industry by encouraging new business deployment solutions.

Gurjodhpal 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 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 be addressed. We are looking forward to a budget that will further push for digitization. Significant spends 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 focus on new businesses and enabling entrepreneurship are key to provide the much-needed impetus for the sector.

Harshil Mathur, Co-founder and CEO, Razorpay

Small businesses and entrepreneurs who had been at the frontline of the COVID-19 crisis have been recovering from the impact and are gradually picking up. With an aim to aid further development of small businesses, the Union Budget 2022-23 could introduce additional startup friendly policies and tax relaxations that enable spending on innovation, ease-of-doing business and reduce compliance costs. It is hoped the government will think of alternatives to the Zero MDR policy, as that will help promote e-payments and drive significant digital adoption amongst businesses. Initiatives like these will also lead to new innovations in the payments infrastructure.

It would be desirable for the Government to increase contribution to the FFS funds for startups. Hassle-free loan disbursements, automation of tax and compliance, paper-less approvals, and incentives to adopt digital banking practices will also be welcome changes that can support the growth of MSMEs.

Himanshu Gupta, Co-founder & COO, WeRize

The Budget should focusing on building a stronger fintech ecosystem. This could be done through liberalization of the tax regime, which would bring considerable relief to the industry. It would also be a step in the right direction to see the introduction of new start-up friendly policies, additional support mechanisms and tighter regulation for our industry.

Jaya Vaidhyanathan, CEO, BCT Digital

For consumers and salaried employees, simple tax-related exemptions and benefits would be welcoming this year. On the business side, reduction in duties, concessions, simplified compliance measures, investment incentives, and state-sponsored programs to boost manufacturing, are all desirable steps to keep up the momentum of growth. It is also most critical to acknowledge the role of fintech in the future of economics. The expectation is for the government to reward and sustain fintech intervention to bolster India’s position as a global growth leader.

Jitin Bhasin, Founder & CEO- SaveIN

Startups have a significant role to play in strengthening the healthcare ecosystem across the country. 70 percent of expense towards healthcare is borne out of pocket and penetration of health insurance is less than 1 percent. The government should consider additional sops for individuals allowing them to spend on preventive healthcare, insurance, personal fitness and also consider special tax concessions for startups focused on the healthcare sector.

Ketan Patel, CEO, Mswipe

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 Rs. 5 crore as it will help them procure service equipment through institutional credit for advancement of their technology. The Government should also look at tax breaks for companies providing technology support to MSMEs. Subsidizing the cost of funds to NBFCs that focus on lending to small merchants for loans below Rs. 20 lakhs is 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 cost for digital players to promote digital payments in tier 3 to 6 towns.

Kevin McCole, Managing Director, UK India Business Council

UK businesses are even more interested in the Union Budget than before because the India-UK FTA negotiations have just launched. Now, Budget 2022-23 will set the direction of India’s economy for the next 12 months and beyond, so it really matters. The UK India Business Council’s budget submission to the Finance Ministry highlighted reforms which would promote greater investment, growth and job creation across sectors. Specifically in the BFSI sector, we recommended tax parity between Indian and foreign companies. As it stands, Indian companies pay an effective corporate tax rate of 25.17 percent with their foreign counterparts paying 43.68 percent. This higher tax rate is often the deal-breaker when it comes to foreign companies investing in India, so we recommend a clear and phased approach to achieving parity.

Kumar Abhishek, Founder and CEO, ToneTag

We are hopeful that the upcoming Budget will focus on bolstering the digital infrastructure of cooperative banks across the country and initiate reforms that drive digital financial inclusion. It is also crucial to capitalize on the success of homegrown technologies such as the UPI and encourage tech startups to invest in R&D and explore avenues to leverage existing tech and create new products. We are hopeful that the upcoming Budget will consider offering tax benefits and incentives; thus encouraging innovation.

Lalit Mehta, Co-founder & CEO, Decimal Technologies

Budget 2022 should introduce regulations that will help in greater credit access to MSMEs and curbing illegal activities while building trust in the digital lending process for the last mile. In line with the government’s goal of creating a digital economy, introducing credit schemes will incentivise the sector and help in providing timely credit to MSMEs that have struggled due to the lack of credit accessibility through traditional means of lending which has directly affected their business opportunity.

Madhusudan Ekambaram, Co-Founder & CEO, KreditBee and Co-Founder, FACE (Fintech Association for Consumer Empowerment)

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. Focus should also be on enhancing the country’s digitization bid, to empower the consumers to avail various credit products.

Manish Lunia, Co-Founder, Flexiloans

Smaller businesses have suffered due to the pandemic, and the fear of Omicron doesn’t look to be subsiding soon. The government should focus on expanding digital footprints for enabling quicker access to financial services. Enabling systemic financial institutions like fintech NBFCs to support the small businesses via cheaper funding schemes, the extension of Credit Guarantee Fund Trust for Micro and Small Enterprises cover, and attractive priority sector lending guidelines will help.

Mandar Marathe, CEO, Koppr

A special focus on making health insurance affordable by reducing GST on premiums from 18 percent to 5 percent is a viable option. The government could also look to increase the limit of deduction under Section 80D from Rs. 50,000 to Rs 1 lakh. A significant allocation of the budget should be made towards bolstering the healthcare infrastructure of the nation. From the current 1.8 percent of GDP spent, the FM minister should further raise it to 3%. Apart from healthcare, the Modi government could do wonders to bring in more domestic equity investments by reducing the rate of capital gains tax from 10 percent to 5 percent or doing away with LTCG tax altogether.

Meghna Suryakumar, Founder & CEO, Crediwatch

Simplify banking norms and encourage a digitisation of financial services to aid the Fintech Sector. Further investments in strengthening digital public infrastructure.

Mitesh L Thakker, Founder & CEO, MissCallPay

UPI, as a revolution from India, has reached only 20 crore users of 118 crore mobile subscribers in India. Government should incentivize new users, primarily the Low Middle Income and Jan Dhan Account holders who on-board on UPI for the first time, provide incentives to fintechs into Feature Phone, Voice and USSD-based payments space to help absorb operational cost of technology so that UPI revolution reach into nook and corners of Bharat.

Mukund Rao, Co-Founder, Muvin

On the lending side in particular, the guidelines being envisaged by the RBI around digital lending will bring about much needed transparency for consumers. The Niti Ayog recommendations on establishing a framework for Digital Banks will help neobanks to potentially transition from being pure technology and customer acquisition layer to a full fledged digital bank. This in turn will open up massive opportunities to offer very customized and tailored offerings to both retail and enterprise customers in the country. Neobanks are driving a high amount of financial inclusion and awareness especially amongst the underbanked segment in India. Public-private partnership programmes will further help to broaden reach and take these initiatives to the masses.

Suitable grants and tax incentives can be provided by the Government to encourage such efforts that have an impact at a grassroots level. Last, but not the least, the RBI had a strong financial literacy agenda in 2021 and this should continue into 2022 by partnering extensively with fintechs.

Murali Nair, President-Banking, Zeta

Given the surge in digital payments, the Budget should consider offering tax incentives to consumers, merchants and ecosystem enablers. The digital payments ecosystem can be a force multiplier for economic growth. In order to accelerate innovation in the fintech space, the Budget should also support more partnerships between banks and fintechs- this will aid in pushing the economy towards financial inclusion. We expect the new Budget to include supportive initiatives to provide a modern payments framework which can ensure high-quality performance while gearing up for the next wave of transformation.

Muralidharan Srinivasan, Head of Payments, APMEA Region, FIS

We expect the Union Budget 2022 to further layout concrete measure 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 / 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 increase in large-scale penetration of credit instruments in Tier II / 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.

Narayan ‘Naru’ Ramamoorthy, Chief Revenue Officer, Global PayEX

This year, we hope the government and Union Budget will focus on further enabling working capital efficiency and productivity across the B2B supply chain and also help the rapidly evolving B2B SaaS companies and ecosystem in India. Considering the ongoing supply chain challenges across the globe, we believe some key areas that will help enhance supply chain efficiency and productivity include continued incentives for adoption of digital technologies in B2B, payment innovation such as open banking, higher limits for eNACH, additional data and measures/laws to ensure MSMEs (and all customers) get paid on time, and building further on the e-Invoice, e-way bill and GST compliance success. B2B SaaS companies can play an important role in democratization and automation of supply chain, which will enable the digital transformation of Indian Economy.

Nitin Rao, CEO - InCred Wealth

It is unlikely that the government will be able to announce any earth shattering reforms or populist measures since the Code of Conduct is in place at state levels. I would therefore expect a low-key budget this time and the markets would likely discount sentiments revolving around earnings and election expectations in this period.

Nikhil Sahni, Division President, South Asia, Mastercard

In the upcoming Budget, we look forward to interventions to further accelerate the impact of Digital India on citizens, via promoting innovations in fintech, enabling digital infrastructure, and incentivising solutions with a focus on safety and convenience for both merchants and consumers. Investments in R&D to introduce newer products and diversify into underserved areas, especially in rural India, could be incentivised. Support towards technology skill-building initiatives in startups will go a long way in creating a viable fintech ecosystem.

To ensure that the benefits of fintech and digital payments percolate to customers in rural India, the government could introduce initiatives to expand digital infrastructure: payment touchpoints, internet connectivity in remote areas, and make the digital ecosystem secure for individuals and businesses. This will facilitate speedy transactions and improve the overall payments ecosystem.

Nitin Misra, Co-founder, indiagold

In Budget 2022 we expect the government to introduce a policy framework where FinTechs can work with the relevant institutions to financialize India's 24,000 tonne-gold reserves through initiatives like the current Gold Monetization Scheme and the proposed Gold Savings Account, as mentioned in NITI Aayog's February 2018 report.

Nitin Mathur,CEO, Tavaga Advisory Services

In the last two years, the fintech sector, which has always been a dynamic space, has seen a rapid influx of developments. First, we saw a huge increase in e-commerce and a shift toward contactless payments as a result of the pandemic.The industry clearly expects a level playing field for all the fintech players. Regulations, especially around those set of companies who tend to act and collect the personal data of their customers without any appropriate license should be asked to cease their operations or follow the rules laid out by the respective regulating authority post coming under the ambit of a proper licence.

Payal Jain, Founder, Funngro

Last couple of years have seen significant growth of online education and role of technology companies in this space needs to be strengthened further. Relook at the GST rates for online education, expanding the net of 80C and specific focus of government in growing financial literacy of citizens would be the primary expectations from the budget. These changes would greatly enable online education access for all Indians.

Pradip Seth, Founder & CEO, S-Ancial

While navigating the digital financial ecosystem (spending, transferring money, borrowing), every customer leaves a digital footprint. To avoid the risk of frauds in absence of a data privacy law, RBI has put a ‘no storage of card data’ rule applicable to all players in the payment ecosystem. This has ‘tokenisation’ challenges to overcome and market players have been pushing for extension. Such issues as cross-border payments, more attention to DLT (Distributed ledger technology), and securing consumer data and privacy must be addressed. We expect the upcoming Budget to bring more clarity in the regulatory framework and policy support for fintech companies.

Pratik Gauri, Co-founder & CEO, 5ire

Crypto technology and blockchain are long-term phenomena that are not going away. And as the government regulations focus on protecting its constituency from the bad it does, it should also look towards utilizing its power of good for better governance and accountability. India has been a significant player in developing solutions for the rest of the world with modern technology; it is high time we become a model of utilizing it ourselves.

Poshak Agrawal, Co-founder & CEO, Florence Capital

The Union Budget for 2022-23 will be crucial for women as they have suffered disproportionately due to the COVID-19 pandemic. The Budget needs to not just reverse this trend but create the ground for better formal sector job opportunities for women. This requires work from the ground up, including higher capital expenditure on education and health – issues that are key for women. We hope that the Budget for 2022-23 will prioritize spending on gender budgeting to help reduce inequalities.

Rahul Raj, Founder & CEO FloBiz

MSMEs contribute to 30 percent of our GDP, account for over 45 percent of EXIM activities and employ more than 11 crore people - this is a testimony to the importance of MSMEs in our economy. In the wake of the 2022 Budget, we expect a special focus from the government to help this sector recover and accelerate overall economic growth. This can come in the form of funding support to NBFCs to maintain liquidity and promote financial inclusion with a distinctive focus on MSMEs under priority sector lending. In addition, reduction in GST rates and relaxation in compliance burden for MSMEs around taxes, audits & loans will go a long way in helping this sector regain its lost momentum. We hope this upcoming Budget will lay out initiatives for infrastructure development that can further promote trade and commerce in the country. The government also needs to encourage institutions and startups aiming to establish digital frameworks for e-KYC, online payments, digital banking & lending with a special focus on this sector.

Rohit Gajbhiye, Founder and CEO, Financepeer

Budget 2022 should encourage the growth and success of the fintech industry by enacting favorable policies and relaxing restrictions. The booming digital infrastructure won’t be complete without having a robust data protection mechanism. Budget should focus on building the necessary infrastructure for data security. Secondly, NBFCs are an important pillar of our country’s financial ecosystem. The Budget should focus on further strengthening the NBFCs through incentives and investments, to give it the required push.

Rohit Garg, Co-Founder & CEO, Smartcoin

We eagerly anticipate increased spending on liquidity and guarantee programmes to help improve loan supply and make NBFCs more capital accessible. The NBFC sector is likely to grow more modestly this year and new capital is expected to be supplied to support this expansion. We look forward to working with a new era of NBFC/FinTechs beginning this year in which the government promotes more banks and larger NBFCs while also giving credit access to individuals who are yet not served by the banks.

Ram Shriram, Founder, BharatATM

The accelerated growth seen by the FinTech and startup ecosystem in 2021 has shored up the need for a more focused approach towards sustaining the growth and protecting customer confidence. Exemptions on procurement of point of sale terminals, GST rates for rural banking agents remitting funds among households, and subsidies to compensate for merchant discount rate (MDR) waiver are among some of the measures industry executives are keeping an eye out for.

Rajat Deshpande, Co-founder, CEO, FinBox

Year 2021 has been tough for the retail and SMB segments. The digital lending space, small-ticket loans as a part of cash flow lending and supply chain financing have immense potential to provide impetus to financial inclusion. But low-value loan collections can be a costly affair for lenders. UPI mandate, like the NACH mandate, is a cheaper alternative and could help solve this collections puzzle a great deal. But its enforceability remains a problem as UPI payments don’t find cover under the Payments and Settlements Act, 2007. Although, UPI AutoPay and collection mandates aren't currently backed by the same legal framework as eNach or cheques. The onus is upon the government to update laws in tandem with technological advancements. In addition, anti-competitive practices such as zero MDR, large capital requirements, and caps on market share are less than ideal practices that are sure to limit innovation and growth.

S Anand, CEO and Co-Founder of PaySprint

It is critical for Budget 2022 to draw bold policy interventions to strengthen digital infrastructure which would eventually help digitizing banking and thereby the overall economy. I would ask for: 1) POS Terminal & Biometric Devices-The Budget should consider making devices such as the PoS terminal / Biometric Devices as the most viable acquiring infrastructure for banks and fintech companies by offering incentives such as a GST subsidy. 2) Incentivise Development of more Technology Solutions like UPI: UPI has been a breakthrough, technology and it is important we replicate its success through newer and more innovative technologies. 3) Data Security Infrastructure: The Budget must encourage organisations who work towards enhancing the security infrastructure to protect and manage data seamlessly.

Sanjay Sharma, MD, Aye Finance

The Government should consider extending and expanding the ECLGS program for better part of the new financial year. It is important that rates of interest in these schemes should not be capped so that lenders are encouraged to make these funds flow to the micro scale businesses where their operating costs are high. Capping the rate of interest diverts most of these funds to the bigger enterprises and thus starves the most needy micro businesses. Loan restructure program has been the life support for so many micro businesses that have been established by years of toil by the business owner. We are not yet out of the woods and the lenders should hence be allowed to extend the restructuring window by 6-12 more months, to enable these businesses to pull through this trough.

Sanket Shendure, Co-Founder and CEO, Minko

About $400 -500 billion or 30 to 40 lakh crores of B2B payments from retailers to distributors in India's retail market happen through cash. If the government provided some incentives to small shop owners to make supplier payments digitally, in the budget, it could potentially save costs and bring about increased financial inclusion.

Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital

It is essential that the Hon'ble Finance Minister announces effective measures to enable speedy recovery and growth of the MSMEs, considering the sector’s significant contribution to the economy. In the upcoming budget, policymakers should provide due consideration to boost liquidity support to the NBFCs as well as encourage frameworks like co-lending, which will greatly boost the reach of financial institutions and progress in the financial inclusion imperative. EASE 4.0 talks about Co – Lending between Banks and NBFC as a means to increase the credit penetration, however the treatment of Tax Deduction at Source (TDS) treatment for NBFC and Banks are different and that is proving to be a major operational challenge to accelerate credit. It is expected that TDS rules would be harmonised between Banks and NBFCs.

Sharan Nair, Chief Business Officer, CoinSwitch Kuber:

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 regularised environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government's vision.

Shruti Aggarwal, Co-Founder, StashFin

Priority Sectors Lending: An increase in overall limit from 5% to 7% of individual banks’ total priority lending to NBFCs and inclusion of MFI will drive financial inclusion for those who have a limited credit footprint. Moreover, it will boost the economy and kickstart allied activities in priority sectors lending. Income Tax Rebate and Standard Deductions for Women Entrepreneurs-In the latest Unicorn Report of 2021, there were as many as 13 female unicorn founders. To encourage more women to not only enter the fintech space, but also thrive, it will be encouraging if the budget generates avenues and an ecosystem for them by introducing tax incentives such as standard deduction, and easy accessibility of funds, especially for early-age women run ventures that have less than 10 employees. This will give an impetus to the overall community, allowing every woman entrepreneur to be financially empowered by these solutions. Tax Incentives for Fintech Firms: Reduced GST and TDS tax rates, especially for NBFCs, would assist rural areas. This would reduce the cost of seamless banking services, and push for greater financial inclusion and a digital economy.

Shubham Jain, Chief Business Officer, Real Estate and Infrastructure, CredAvenue

Investment in infrastructure will be the key. We need an aggressive approach so that its multiplier effect provides not just the greatest bang for the buck but also the most sustainable one. India needs to invest $1.4 trillion in infrastructure to become a $5 trillion economy by FY25. Happily, the government has made infrastructure spending a focus area. Last year’s Budget set the stage with an allocation of Rs 5.54 lakh crore – a 35 percent increase YoY. This year, it might be a good idea to prioritise assets for focused implementation by giving necessary confidence to the private sector as well as the lending community. The confidence-building measures could include maximum upfront land acquisitions/right of ways, single-window clearances, a faster dispute resolution mechanism and a strengthening of the payment security mechanism. Securing cheap, long-term finance for infrastructure has also been a challenge due to asset-liability mismatches of lenders as well as the not-so-pleasant experience of lenders in the last decade. We need to look beyond conventional banking. Relaxing investment restrictions through IRDA and PFRDA would help.

Siddharth Kukatlapalli, Co-Founder and CBO, Syntizen

As we move closer to the Budget announcements, we are eagerly waiting to know what is new and upcoming for this year for all digital businesses – big, medium and small. With the adequate infrastructure, right audience (which already exists in the country), and ample support, Digital Businesses can flourish and support the people and the economy in all ways possible

Saumya Shah, Founder, Tarrakki

No taxation in switching from Regular to Direct plans: Income tax (LTCG or STCG) is being applied if an investor switches from a regular plan to direct plans or switches from Growth to Divided or vice versa. Given the underlying assets of all the schemes are the same, I'd hope in this year's budget we see taxation only being applied when the units are sold and not when the user switches the plan.

Sudhesh Chandrasekar, Chief Financial Officer, slice.

The NBFC sector has witnessed liquidity crunch in the last few years. Therefore, boosting the liquidity flow to fintechs and smaller NBFCs focused on consumer credit would be key to reviving economic growth and putting the economy back on a double-digit growth rate trajectory. In a bid to ease lending, the government also could promote banks to specifically fund fintechs and smaller NBFCs which are furthering financial inclusion in the retail segment. Another welcome move could be the Extension of tax sops on MLDs which has the potential to increase the flow of capital to the fintech space. The government’s policies can also be helpful in promoting the flow of overseas capital by easing the requirements and thresholds for Indian debt instruments.

Sujith Narayanan, Co-Founder, Fi-neobank

The government should consider increasing household savings not only benefits individuals but provides a source of cheap and long term funds to the government. The Vudget should increase the annual limit of Rs 1.5 lakh on tax-saving schemes under section 80C to encourage savings and investments. Additionally, the lock-in period of five years on tax-saving fixed deposits under this section should be reduced to three years to make it a more attractive investment option. Along with creating more jobs, skilling and up-skilling, the workforce is equally important for the economy and growth. To this end, the Budget should incentivise investments in education, for oneself or for children. A new section of investments for education can be earmarked as tax saving schemes. In the absence of deductions, education investments can be exempted from long term capital gains with checks and balances in place to curb any misuse. Such measures will certainly result in higher returns for all stakeholders in the economy.

Sumit Gwalani, Co-Founder, Fi

This year’s Budget offers an opportunity to shrug off the impact of the third wave and push the economy towards higher growth. Throughout last year, we have seen that more individuals are keen to take part in India’s capital market success. To enable them, digital infrastructure for financial services from banking and payments to credit, investment, and wealth management needs to reach the last mile.

Swapnil Pawar, Founder, ASQI

The Fintech industry is looking forward to financial inclusion. We want to highlight the fact that the access to credit for small businesses and thin-file borrowers can be improved with innovation in Fintech and blockchain. A lot of the current regulatory constraints in peer-to-peer lending and small business lendings are heavily stacked against small fintech firms. The current financial regulatory regime is quite straight-jacketed and could use a bit of an aggressive sandboxing approach which will help people innovate, even if in small groups. The current sandbox that we see is too basic and can use an open-minded attitude in its approach. If the regulations around peer-to-peer lending and small business lending can be relaxed, it will allow greater innovation. To be more specific, easing regulations around decentralized dematerialization of securities, whether it is listed or unlisted, debt or equity, funds or stocks; any combination of these will enable small businesses and individuals to get into using smart contracts reducing the legal burden and the need to trust third parties or work only with large companies.

Tanul Mishra, CEO, Afthonia Lab

The fintech industry has only touched the tip of the infrastructure transformation iceberg. In the years to come, we are likely to see that transformation journey evolve and go deeper into the tier 2/3/4 cities and semi-urban and rural spaces to create true impact. This is only possible with the continued support extended by the government, in terms of reforms, flexible regulatory environments, and budgetary allocations towards state and regional sandboxes that help create structural and foundational changes to India's complex financial services industry.

Vicky Jain, Founder, uKnowva

There are two critical challenges to the startup industry which need to be addressed: (i) many startups in the country lack a compelling revenue base and require an infusion of cash flow for survival (ii) there is an immediate need to accelerate their digital transformation with technology. Thus, the government needs to look at helping startups through policies and support mechanisms towards domestic capital participation, create a favorable investment climate in tier 2 and tier 3 cities, provide incentives to set up incubators in every state, come up with tax exemptions in FDI, and focus on startup infrastructure development. Further, measures like streamlining approvals, quicker adoption of technology, and compliance for ease of doing business would also be immensely helpful.

Vikram Subburaj, Co-Founder and CEO, Giottus Cryptocurrency Exchange

2022 should be a year of clarity for the crypto ecosystem. The upcoming Budget is a good opportunity to start a dialogue around various undefined aspects of the asset class that need addressing. We expect well defined regulations around crypto and blockchain technology to eventuate this year which will drive confidence in the ecosystem. We hope the regulations are forward thinking setting a precedence to the developing world with regards to thought leadership and industry development.

Businesses and individuals would then be able to operate with much clarity as the ambiguity around taxation is cleared and crypto assets get defined appropriately under various taxation laws.

Vineet Tyagi, Global CTO, Biz2X

In the spirit of tech innovation and digital transformation, we hope, through the Union Budget 2022-23, the government will bring game-changing reforms, new policies, and regulations that will offer relief and tax sops to MSMEs and the overall startup ecosystem. With the pandemic providing the boost to digital payments, there is an increased need for revolutionary advancements of end-to-end infrastructural as fragmentary solutions may not sustain in the long run. In 2022, we expect that the government to focus more on the development of digital infrastructure to enhance customer experiences, credit quality, and streamline the growth of financial entities in FY22-23.

Vivek Banka, Founding Team, Goalteller

My expectations from this years Budget is status quo which in itself would bode well for everyone in the ecosystem. Whether it be personal taxes, corporate taxes or capital gain taxes, the regime should be made easier and progressively lower as the government has themselves stated earlier. The focus should continue to remain on more transparency, greater compliance and finally easier rules of doing business ( whether it be relaxed norms or government portals working smoothly every single thing that helps empower startups with easier processes eventually helps us save time and money.

Tarun Nazare, Co-founder and CEO, Neokred

In Budget 2022, we are looking forward to financial wellness as a syllabus and program in the education sector. Banks and Merchants working together to facilitate 100 percent loan coverage to farmers in helping them get fertilizers and seeds as per their crop grown on their land. Importance is given to solar energy, creating Gigafactories PAN India which will decrease electricity cost by 70 percent in a year and in the second year it will make it 100 percent. Hence, there will not be any electricity cost incurred by any citizen. Mandatory life and medical insurance facilitated to all bank account holders.


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