The past two years have been very difficult for all in general. The new normal in a world where Covid-19, unfortunately, has become part of our life and will bring about many changes in the way businesses will be conducted, and more importantly the way we live our life. The Union Budget 2022 -23 is being keenly watched by many sectors. The 3rd & 4th quarters of 2021 did see the economy looking up, the third wave or Omnicron which hit us in mid-December was the dampener.
The pandemic also saw a huge surge in digital payments and the rise of eCommerce platforms. Fintech sector is hoping that this budget will waive GST & TDS and a level playing field for this sector.
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 start-ups 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. P2P lending plays a significant role in empowering small businesses in India. Tax benefits in P2P lending will magnify the growth of businesses when capital from P2P platforms is diverted to the sector.
The pandemic has resulted in significant job losses, primarily due to people’s inability to keep up with evolving technology. The way the government is spreading awareness is remarkable. Further to that, setting up avenues for advanced technical education, for instance, could help it drive so much further. Presently, India requires professionals with technical and financial competence to conduct the Fintech revolution. More institutions that provide formal education and certifications are needed to create a skilled group of individuals required to grow P2P lending platforms and the Fintech industry”.
Anand Kumar Bajaj, Founder, MD & CEO, PayNearby: “The digital payments space has proved its mettle as a stable growth avenue during the pandemic. A positive impact was seen on digital payments due to benign taxation for self-service digital customers. 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. A GST and TDS waiver will help reduce the cost of offering seamless financial services and help high-end tech reach the technology-oblivious segment. We stand with the government’s intent of taking digitization to the last mile and passing the GST waiver benefit to end-users as this will push for greater financial inclusion and a digital economy in the country.
Moreover, low-income citizens are mostly catered to by low-earning retailers who barely cross the value of taxable income, and hence, do not file IT returns to claim a refund of TDS. Thus, TDS is only a cost to them and not a refundable deduction because they do not know how to take a refund by filing returns. We sincerely hope that TDS for income below ₹ 50,000 a year can be waived off. We are positive that this Budget will consider the grim working condition of the BC network and make the needful regulatory changes to ensure the viability of a community that has been vital in driving the cause of financial inclusion and democratization of digital payments in the country”.
Zafar Imam, CEO, FinShell: “Technological and Digital disruption have impacted and led to the growth of all industries – the financial sector is at the top of that list. With the growing smartphone users and internet penetration, FinTech has become an invaluable part of each user’s life. The increasing users of digital financial platforms have brought in strong competition in the financial services industry. It goes without saying that with the access and usage of financial platforms online, the benefit has reached users irrespective of geographies, time, and socio-economic boundaries. The consistent growth in the number of UPI users showcases and establishes the digital penetration in the payments business. There is also a significant growth in the investments and insurance sectors that has been led by this enhancing digital footprint. At this time, with this growth, it is important for us as part of the larger industry to support and enable digital finances and its infrastructure to make each user’s life easier and smoother”.
Anshuman Narain, Vice-President, CashBean (P.C.Financial Services Pvt Ltd.): “The main impetus that FinTech 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)”.
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.”
Anil Pinapala, CEO & Co-Founder of Vivifi India Finance: “In the upcoming union budget, I hope to see a strong mandate for financial inclusion and assistance from the GoI for start-ups 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”.
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 license.
Regulation around cryptocurrencies is much needed, as soon as possible. There is a lot of confusion and uncertainty around the tax to be paid from the profits made out of trading in cryptocurrencies. While the budget would not be the appropriate place for the FM to regulate cryptocurrencies or the attached Blockchain technology, clarity is expected on the taxation front of it.
There should be more focus on educating the commoners about Digital Currency, which India intends to bring in the market. Tax concessions and incentives around digital payments will ensure a further boost in tax revenue collected by the government”.
Neeraj Sharma, VP, Globale Media: “There are multiple expectations from budget 2022 for salaried class, agri-sector, fintech& banking; however one of the sectors which are on boom & are waiting to get entry to the assets and TDS law provisions which is Crypto. Crypto is going to fuel the next version of the internet, Web 3.0. Plus there are multiple other digital assets like NFTs, etc which will help India create a strong base on its journey towards becoming a $5 trillion economy. Also, I hope the budget this year allows policies that result in the increase across the disposable income and enhance the viability and profitability that will contribute a lot to the advertising/media spending.”
Sharan Nair, Chief Business Officer, CoinSwitchKuber: “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 regularised environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government’s vision.’’