Banking, Neo bank, NBFC & Business market reactions on Budget 2022-23: As Finance Minister Nirmala Sitharaman on Tuesday made an announcement outlining the economic growth for India over the next 25 years.
Here’s what the Banking, Neo bank, NBFC & Business sector experts are saying about the Union Budget 2022:
Pratyush Chandramadhur, Chief Business Officer, Fintelle (AuthBridge):
Setting up 75 digital banking units (DBUs) in 75 districts across India through scheduled commercial banks is a welcome move. The introduction of a digital rupee will also lead to wider digital adoption and enable a digital-first economy. The announcement of the use of emerging technologies like blockchain in RBI will keep the momentum going towards modernizing the technology infrastructure. This will give a push to not only the government sector but also emerging fintech companies and digital ecosystem enablers. Together, these policy changes will take India forward in the direction of financial inclusion and digital transformation at scale.
Vineet Tyagi, Global CTO, Biz2X:
The Government’s aim to spread digital banking services to remote areas in India is a welcoming move. The Finance Minister proposes the inclusion of Post Offices in the core banking system customers. With this, Post Office account holders will be able to make online transactions and even transfer money to other bank accounts through net banking.
This will be beneficial especially for farmers, senior citizens and SMEs in rural areas, enabling interoperability, and financial inclusion. Acknowledging Digital rupee is a great acknowledgement by Government and is a massive digital boost. It will promote fintech and technology-based development which is a much needed push. The use of technology in every important project is the key highlight of this year’s budget and an epitome of “Naya Bharat.”
Sarosh Amaria, Managing Director, Tata Capital Financial Services Limited:
The Government has continued its support to the MSME sector with measures announced in the Budget like extension of ECLGS scheme and integration of digital portals. Higher allocation towards capital expenditure at Rs. 7.5 lac crores will aid the industry in sustaining recovery after the pandemic.
Tushar Aggarwal, Founder & CEO, StashFin:
The Finance Minister has announced support for digital payment and banking in the Union Budget 2022-2023, which will be welcomed by the sector. The measures include introducing a Digital Rupee that is to be issued by the RBI, prioritizing digital economy and fintech industries. We, at Stashfin, are grateful to the Government of India for this decision of extending support towards neo-banking start-ups.
The government is taking steps to ensure that digital services reach even remote areas in the country. India’s digital payment and banking industry has shown stellar growth, and Stashfin along with the government would like to bridge the gap between financial institutions and users across the country.
Building awareness of digital payments and promoting financial literacy is critical to India achieving the vision of a $1-trillion digital economy. We look forward to strengthening the payment ecosystem and go along with the government vision for financial inclusion via digitalization.
Prodipto Roy, Co-Founder, Quickshift:
The overall outlook is for state-led Growth, one would have preferred to see some tax exemptions that could have led to increase in consumption. It appears that there was hardly any elbow room to provide any tax benefits to the middle-class. E-commerce companies essentially target middle income segments, any relaxations there would have led to the growth.
Chandra Shekhar Ghosh, MD & CEO, Bandhan Bank:
“The Union Budget for 2022-23 seeks to support the recent economic growth momentum India has seen, and help it sustain over the long-term. The substantial rise in planned capital expenditure for creation of infrastructure, focus on affordable housing, welfare & development of MSMEs, and the farm economy will prepare India for the next phase of growth. This can lead to creation of millions of new jobs, helping India leverage its young demographic dividend. The new business opportunities and enterprises that will come up due to these projects will also benefit the banking sector.
The extension in timeline and increased outlay towards ECLGS and additional infusion of funds in the Credit Guarantee Trust for Micro and Small Enterprises will provide relief to MSMEs, especially those engaged in contact-intensive sectors, who have been adversely impacted due to the pandemic. The significant additional allocation towards PM Awas Yojana will boost demand for affordable housing, and in turn demand for housing finance. It was also heartening to hear about the Prime Minister’s Development Initiative for the NorthEast Region finding special mention in the Budget, in line with the capex projects planned for the rest of the country.”
Siddhartha Sanyal, Chief Economist & Head of Research, Bandhan Bank:
The Budget aimed at a near term boost to consumption, as well as creating the necessary physical and social infrastructure to support the country’s long-term growth ambitions. The Budget attempted to balance the needs of large and small industries and various segments of the population in the budget. While the details of the plans related to government borrowing needs to be scrutinised closely, the Finance Minister was mindful of not allowing the deficit to balloon.
The focus to support MSMEs by the extension of the ECLGS scheme till March 2023, with a larger corpus of funds is a welcome step. The CGTMSE scheme to support small and micro enterprises should also provide much needed support for this segment. Extending support for the affordable housing sector is heartening given the strong forward and backward linkages of this sector and its potential to generate employment at various levels.
The focus on some of the long term priorities such as skill development, financial inclusion, social security, and clean energy in the budget remains noteworthy.”
Manish Chourasia, Managing Director, Tata Cleantech Capital Limited:
The announcement of the Finance Minister to issue sovereign green bonds to mobilize resources required for green infrastructure will certainly help boost the financing of clean energy projects, thereby providing an impetus to the Indian energy sector. With the Approved Module Manufacturer List becoming applicable from April 2022, the allocation of an additional INR 19,500 crore under PLI scheme for solar would help create a much needed manufacturing ecosystem. The enhanced focus on electric mobility is showcasing the clear desire to mainstream this emerging industry. Overall, the budget is giving clear direction for India to meet its COP26 commitments by 2030.
Himanshu Pujara, Regional MD, APAC, Euronet Worldwide:
“Money has changed forms over centuries. From salt & cattle to now paper money which lasted the longest time. This is a historic budget that has defined the future of money i.e Digital Currency. A landmark step that will improve the economy and reduce Its dependence on paper money. We welcome the introduction of the Digital Rupee using block chain technology by RBI.
Pranay Jhaveri, MD, India and South Asia, Euronet Worldwide:
We see that the government has laid out a strong framework for a digital ecosystem to make it safer, secure and affordable for individuals and businesses. With the target to complete the laying of optical fiber in villages by 2025, settlement of 75% of running bills in 10 days, and setting up an online eBill system are focused projects to expand digital infrastructure, improve internet access, increase payment touchpoints across hinterlands of India. Introduction of the digital currency will bring in security and transparency. We also welcome the initiative of setting up 75 banking units in 75 districts. As 1.5L post offices come into the core banking fold, we hope that ATMs will become as ubiquitous as post boxes which will directly serve the financial inclusion narrative of India”-
Poshak Agrawal, Co-Founder & CEO, Florence Capital:
We welcome the vision outlined in the Union Budget 2022 regarding digital payments and how it can be a key tool towards enabling financial inclusion. The Budget has acknowledged that taking forward the digital banking and fintech innovations is the way to go – it is proposed to set up 75 digital banking units in 75 districts of the country by scheduled commercial banks. We hope to be able to support this mission and vision of financial inclusion by providing secured, transparent and accessible credit to women. Financial inclusion will play a key role in ensuring that the goal of 9.2% economic growth is achieved.
Amit Nigam, COO & Executive Director at BANKIT:
FinTech industry is an ever-growing sector of the society. As per one of the ideologies of budget 2022 “Atma Nirbhar Bharat Ka Budget”, the FinTech industry also strives to make everyone self-reliant. According to the budget 2022-2023, India’s growth is expected to grow by 9.27% including high-yielding opportunities for start-ups. As digital payments have grown at a rapid pace, the benefits of digital banking should reach every nook and corner.
So, 75 digital banking units will be set up in 75 districts by scheduled commercial banks that will be like icing on the cake. Focus on the usage of Digital Payment Apps will also be enhanced from our end. All the 1.5 lakh post offices in India will be connected to the core banking system that will enable people to access their accounts online and transfer money within post office accounts and to other banks also. As tax incentives for start-ups to be incorporated until March 31, 2023, Union Budget sounds favorable for FinTech start-ups. Next phase of “Ease of Doing Business, Ease of Living” is also ready to be launched. Hence, we are looking forward to making the best use of new technological and advantageous opportunities designated by the Union Budget 2022-2023.
Abhishek Pathak, Founder & CEO, Greenwear:
“The budget for the year 2022-23 has provided a promising start for a greener and cleaner future of our economy. Sovereign Green bonds for mobilising resources for green infrastructure will definitely add value in reducing the carbon intensity of the economy. It would have been an icing on the cake if the budget allocation in the clean energy sector would somehow be directly linked with livelihood generation at the local level. Announcement of Vibrant Village Programme and inclusion of decentralised renewable energy resources for villages located on the northern border is also a welcoming step. There is not much for the traditional textile industry. However, the budget incentivises textile exports by exempting various embellishments which might help bonafide exporters indirectly working with traditional crafts.
Ajay Pareek, Chief Business Officer, Fullerton India:
The FM has delivered a Union Budget today that was clearly focussed on economic recovery through increased capital expenditure for the country’s growth. The push towards self-reliance reveals the government’s steadfast intention to achieve the long-term goal of ‘Atmanirbhar Bharat’. The extension of the ECLGS scheme till March 2023, as well as the expansion of the guarantee cover by ₹50,000 crore to ₹5 lakh crore is a welcome sign for the NBFC sector and over 130 lakh MSMEs. The thrust to digitise India and the focus on the fintech segment will help enhance financial inclusion. The affordable housing segment also received a boost today, with the allocation of Rs 48,000 crore under the PMAY urban and rural schemes.
Dr. Manoj Singh, CEO, RUBIKA India:
Very intrigued to know about the setting up of the digital university and the AVGC task force that the government has announced in the budget today. The budget certainly looks to be forward looking and promising as the AVGC (Animation, Visual Effects, Gaming and Comics) industry in India happens to be worth about 40 billion dollars today and would be growing to about 60-70 billion dollars by 2027/28. This is a very welcoming step keeping in mind the growth in AVGC industry, augmenting global demands for quality content and the current resource crunch of the trained and skilled individuals. We sincerely look forward to seeing an ecosystem being developed for the same.
Umesh Revankar, VC & MD, Shriram Transport Finance:
“The union budget 2022 is a bold and growth-oriented budget which will result in a multiplier effect on the economy and benefit the Aam Aadmi, despite no direct benefit transfers. We believe the FM has presented an investment led budget and this will propel sectors like cement, steel and construction which will lead to increased movement of goods, boost bulk transportation movement and help in the revival of the transport industry. The government widening the ECLGS scheme & revamping CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises) are steps taken to accelerate growth and reduce stress particularly in the MSME segment. Housing project allocation of Rs 48000 crore is likely to boost growth momentum for the building materials sectors and real estate activities in general. We believe the budget is a very forward looking one with emphasis on digital economy and reducing carbon footprint, which will benefit digital lending and lead to environment friendly policies going ahead for the vehicle sector. Ease of doing business has taken centre stage as the Government has committed to a long-term growth of over 8% for the next 3 years. India’s economy is now well placed and we are optimistic on credit uptake in the economy.”
Avinash Godkhindi, MD and CEO, Zaggle:
The honourable FM has presented a balanced budget with a strong push for digitalization, financial technology and digital payments specifically. As one of the very few profitable SaaS Fintech players, we believe the biggest news is the issuance of the digital currency by RBI which will open a wide range of options and opportunities. Additionally, the endorsement that digital payments are user friendly and economical is a big boost to the morale of FinTechs and all digital payments ecosystem players, the continued support is most welcome. The aim to take digital banking to every citizen is extremely heartening, positive and a bold statement. The plan to create 75 digital banking units in 75 districts is great. Possibly the best way to execute this would be for scheduled banks to partner with FinTechs to roll out these effectively.
The Union Budget 2022 has various encouraging initiatives that will propel aspiring entrepreneurs and boost Fintech and startups. To further ease the business environment for startups, the government has announced the existing tax benefits for startups to be extended by one more year up to 31st March 2023. Overall the FM has presented a growth oriented budget focusing on capital expenditure that will go a long way in providing the much needed support for India’s long term growth story and help create employment opportunities for the wider section of the society.