Fintech
How Union Budget 2024 Can Strengthen India’s Fintech Superpower – Budget 2024 News
By Bipin Preet Singh
AS India gears up for the 11th budget under Finance Minister Nirmala Sitharaman, expectations are high for a document that not only charts the nation’s economic recovery but also guides future growth. With the economy rebounding with a GDP growth of 8.2% in fiscal 2023-24 post-COVID, this budget assumes critical importance, especially for the burgeoning fintech sector poised for its next phase of evolution.
The National Strategy for Financial Inclusion 2019-2024 highlights the importance of bridging gaps in traditional financial services for disadvantaged populations. Fintech companies are key in expanding digital infrastructure in rural areas, ensuring universal financial access. Targeted subsidies can further drive innovations for low-income groups, balancing commercial success with social impact.
Access to financial services stimulates investment, reduces economic vulnerabilities and supports employment. However, many SMEs and households in emerging metropolises and small towns lack access to credit due to poor banking facilities. Therefore, improving accessibility to financial services is crucial, supported by a solid PMI credit flows and incentives for small banks. This is where initiatives like the allocation of Rs 22,137.95 crore in the interim budget highlight potential fiscal impacts on SME growth and digital integration.
Fintech companies are expanding beyond basic payment solutions into areas such as insurance, personal finance, and digital gold lending to broaden their service portfolios. Neobanks and ecosystem banking models are emerging to provide comprehensive financial services to consumers and businesses. InsurTech is another rapidly growing segment within fintech, offering significant market opportunities. Similarly, alternative investment platforms are also gaining traction, offering new avenues for retail investors to interact with capital markets.
In line with the ongoing evolution of the fintech sector, regulatory clarity emerges as a linchpin for sustained growth and innovation. The role of the balance sheet in addressing regulatory uncertainties and creating an enabling environment for over 6,000 fintech companies will fuel the sector’s expansion while safeguarding the interests of consumers.
This alignment also represents a unique opportunity to integrate the Digital India initiative with the transformative potential of financial technology, fueling resilience, fostering innovation and driving inclusive economic growth. In addition, initiatives such as the Open Credit Enablement Network (OCEN) and unified KYC frameworks are key to streamlining operations, reducing compliance costs and improving overall efficiency across the industry.
Additionally, collaborations between public sector banks (PSBs) and fintech firms also present opportunities for sectoral growth. Leveraging the reach of PSBs with fintech’s technological expertise through strategic partnerships can amplify financial inclusion efforts and strengthen customer engagement. Additionally, government investments in AI-based solutions can help overcome language barriers nationwide, resulting in significant economic opportunities in rural areas while transforming customer service and efficiency across urban India.
As the budget approaches, expectations are high for measures that unlock the full potential of fintech. With strategic policies and investments, the government can pave the way for an advanced, inclusive and integrated fintech ecosystem, driving substantial economic and social progress.
Bipin Preet Singh is the co-founder and CEO of MobiKwik. The views expressed are personal. Reproduction of this content without permission is prohibited.