Union Budget 2023 wish list: FINTECH

The Tech Panda asked the FinTech industry what their expectations are from the upcoming Union Budget 2023.

The Union Budget 2023 is coming, and the financial industry has many expectations from the Finance Minister Nirmala Sitharaman on 1^st of February 2023.

Last year’s budget proposed several steps for a more digitally financial India, with a push towards a cashless economy and financial inclusion. The Budget was praised for its potential for blockchain adoption as FinTech took priority through the digital Rupee.

The Tech Panda asked the FinTech industry what their expectations are from the upcoming Union Budget 2023.

Abhijeet Sehgal, Co-Founder & CEO, 1Pay

“India is in a position to become a global leader in fintech innovation thanks to the thriving startup ecosystem and corporates that are enthusiastically driving the change. With our Finance Minister announcing the Union Budget for the fiscal year 2023-24 on February 1, 2023, we are hoping that the government will implement better corporate tax and GST rebates that will further encourage industry growth and development.

Since the RBI has issued the framework for payment aggregators in 2022, we are eagerly waiting to learn more about the roadmap ahead for Payment Aggregators

“We are also excited to hear on the adoption of Account Aggregation & multiple FSR’s participating in the Ecosystem (such as the RBI, SEBI, PFRDA, IRDA, and GSTN), FIPs, and FIUs, which will benefit customers by seamlessly connecting all types of asset classes with only a single consent approval in order to generate a 360-degree view. Since the RBI has issued the framework for payment aggregators in 2022, we are eagerly waiting to learn more about the roadmap ahead for Payment Aggregators.”

Rahul Raj, Co-founder, FloBiz

“In Budget 2022-23, Finance Minister Nirmala Seetharaman announced the setting up of 75 digital banking units (DBU) in 75 districts by RBI-regulated banks. The step is aimed to enable access to the core banking services for rural markets and improve financial inclusion. The government may consider the NITI Aayog’s recommendation to issue a licensing framework for such digital banks focussing on creating niche solutions for specific underserved segments, such as credit products for MSMEs.

In Budget 2022-23, the government may also think of revamping credit guarantee schemes, grants and subsidies to support loans originated by partnerships between RBI regulated entities and fintech entities

“In its effort to recover from COVID-induced slowdown, India has witnessed the significant growth in credit to MSMEs in the last two years. This was largely supported by incentives provided under the Emergency Credit Line Guarantee Scheme (ECLGS). In Budget 2022-23, the government may also think of revamping credit guarantee schemes, grants and subsidies to support loans originated by partnerships between RBI regulated entities and fintech entities.”

Rishabh Goel, Co-Founder & CEO, Credgenics

“Over the past year the Indian fintech sector has witnessed many regulatory changes. Our expectation from the Union Budget are measures that both increase financial inclusion and spur the fintech sector’s growth by encouraging collaboration between banks and NBFCs. This could be through providing adequate co-lending limit to banks and NBFCs and through better co-lending rates. Further, digitalization of NBFCs, fintech companies and shadow lenders operating in tier 2 and 3 cities will improve both financial inclusion and last-mile reach of financial services.  

“The reintroduction of a partial credit-guarantee program to cover MSME’s subsequent lending will improve the credit delivery system. It will also make it easier for credit to flow to the MSE sector, and infuse more money in the financial system. Thereby, it will benefit NBFCs in a big way. What will help further is an overall lower tax burden and improved lending arrangements for banks and NBFCs.

Digitalization of NBFCs, fintech companies and shadow lenders operating in tier 2 and 3 cities will improve both financial inclusion and last-mile reach of financial services

“For small businesses and startups to grow and become globally competitive, more government initiatives like tax breaks and easy access to funding are required. Introduce policies to broaden startup funding, increase consumer access to funds to encourage consumer spending, and promote entrepreneurship education at leading institutions. 

“Further, the adoption of new-age technologies like automation, Artificial Intelligence (AI) and Machine Learning in the financial sector should be incentivized. This will not only make India globally competitive but will also strengthen the government’s Digital India initiatives.”

Govind Sankaranarayanan, Co-founder & COO, Ecofy

“Firstly, we hope the FAME subsidy will be extended to enable the EV space to achieve its full potential. Further a tax credit to individual house owners on loans for residential rooftop installations below 20 KW would democratize the use of solar.

The Government could expedite the creation of a green taxonomy to identify what is eligible for green finance and have a specific focus on SMEs

“It would also be good to increase fund allocation to enforce robust implementation of battery and waste management rules. The Government could expedite the creation of a green taxonomy to identify what is eligible for green finance and have a specific focus on SMEs. To encourage SMEs to undertake the green transition CGTMSE guarantee can be expanded where green loans qualify for higher coverage.”

Kumar Gaurav, Founder & CEO, Cashaa

“The Budget for 2023 is scheduled to be discussed on 1st Feb 2023, after imposing a 30% fixed tax rate on all income generated through crypto trading in Budget 2022. After having launched the e-rupee, we are expecting that the government would bring in more regulations for cryptocurrencies.

Estimations point out that crypto ownership in India is almost double compared to the rest of the world. These being said, the government will more likely introduce a regressive tax for cryptocurrencies

“Estimations point out that crypto ownership in India is almost double compared to the rest of the world. These being said, the government will more likely introduce a regressive tax for cryptocurrencies.”