Fintech
Union Budget 2024: What does the FinTech sector expect from the government?
The fintech sector has high hopes for measures that will boost financial inclusion and economic growth, with the 2024 EU Budget coming up in a few weeks.
Ahead of the budget announcement due on July 23, industry leaders shared their expectations and suggestions on how the government can support this vital sector.
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Dilip Modi, founder and CEO of Spice Money, stressed the importance of digital public infrastructure.
He said, “Public digital infrastructure has been instrumental in enabling the exponential growth of digital payments in India, with an increase of nearly 90 times in the last 12 years.”
Modi stressed the need for effective security measures to prevent digital payment fraud and praised recent initiatives such as the announcement of a digital intelligence platform.
To keep the payments ecosystem growing, Modi believes it is crucial to empower fintech companies that provide last-mile services. These companies bridge the credit gap, especially for SMEs and Nanoentrepreneursstimulating entrepreneurial growth and job creation.
He suggested exempting services offered through Business Correspondents from GST to ease tax burden, reduce operational costs and extend financial services to rural and remote areas.
Modi also stressed the importance of recognizing Self-Regulatory Organizations (SROs) in the fintech sector. This recognition would help maintain a balance between innovation and compliance, ensuring that fintech companies can continue to innovate while adhering to regulatory standards.
Rayan Malhotra, founder and CEO of NeoFinity, stressed the need for a clear and simple capital gains tax regime to strengthen capital markets.
He said, “Simplifying tax systems and ensuring clarity will attract major traders and stimulate market interest.” Malhotra also stressed the importance of increasing awareness about the activities being conducted at IFSC GIFT City to transform it into a global financial hub.
Malhotra called for initiatives to promote virtual banking and reduce non-performing assets (NPAs) for a healthier financial ecosystem. He suggested that encouraging virtual transactions and reducing dependence on cash could improve transparency and efficiency in economic transactions.
Seema Prem, Co-Founder and CEO of FIA Global, stressed the need for fiscal measures to support Bank Mitras, a company working on the front lines to provide financial services.
He suggested setting up a bespoke infrastructure grant fund for Bank Mitras to ensure they have access to the latest equipment. Prem also proposed setting up the India Business Correspondent Equity Fund (IBCEF), similar to the India Microfinance Equity Fund, to provide capital to Bank Mitras, helping them achieve scale and efficiency in operations.
The monsoon session of Parliament, which will begin on July 22 and conclude on August 12, will see the budget presentation on July 23.
Published on:
July 17, 2024