In a bid to boost the pandemic hit economy, through the multiple investment announcement in the sectors like Health, Infrastructure, Education, Startups, Automobile among others. Finance Minister Nirmala Sitharaman on Monday tabled the first paperless Union Budget for 2021-22 in the parliament.
Here’s what experts from the fintech industry sector want to say:
Ketan Doshi, Managing Director, PayPoint India:
“Governments move on the proposed 1500 crore fund for digital payments is a welcome move and will go a long way in strengthening payment infrastructure in the country and taking financial services to the last-mile. We would wait to see the fine print of where this fund will be allocated.
Waiver of Tax audit for companies with turnover up to 10 crs and a cash expenditure of less than 5% will push Small businesses to move towards Digital payments.”
Mr. Amit Nigam, COO & Executive Director of BANKIT:
“Though we were looking forward to some changes, we welcome the moves taken by our honorable FM on growing the Fintech Industry. We are looking forward to the setting up of the world-class Fintech hub in Gujarat International Tech City. Also, the allocation of ₹1500 crores to boost digital transactions will make for a good start and open more opportunities in the future. We hoped on seeing a GST rebate which isn’t seen in the budget.”
Mr. Raj. N, Founder of Zaggle:
“The Hon. Finance Minister has to be commended for creating a fine balance between resources and requirements to usher economic growth. The move to set up a Fintech hub in GIFT City is a very welcome one. There is a need to create more such hubs in the country for FinTech’s to grow. The decision is a clear validation by the Finance Minister that FinTech’s are an important part of the financial ecosystem. It would be really important to accord industry status to FinTechs. Many other announcements that are important and notable include the changes in the regulatory and compliance front like allowing a 1 person company and also the change in days for computing residency status of NRIs. The Budget has also allocated Rs 1500 crore to boost digital payments which is also a very significant step in the right direction. It will help in further digitizing the Indian economy.
The FM has paid adequate attention to the stressed assets of the banking industry. The move to set up an Asset Reconstruction Company and Asset Management Company to consolidate and take over the existing stressed debt is a very good one. It will help in managing and disposing of the assets to Alternate Investment Funds and other potential investors for eventual value realization resulting in the cleaning of bad books of public sector banks. Fears about the introduction of Wealth Tax and increase in LTCG tax have been allayed and that is a very praise worthy thing to happen in this Budget. In my opinion, the entire Fintech industry will benefit, be it Lending, Automation of the Financial processes, Digital Payments, P2P lending, NeoBanks, and the collaboration between the Banks and Fintechs. Recognizing Fintech as an industry would have been much sweeter but overall it’s a 360-degree growth for Fintechs.”
Mr. Satyam Kumar, Co-Founder and CEO, LoanTap:
Budget 2021 is a promising budget that has clearly defined the directions of the Modi Government’s Atmanirbhar Bharat. Increasing FDI in insurance companies, establishing a Fintech hub in IFSC, growing Health infrastructure, Highways, Railroad & public transport are steps that will pave the way towards a new India. Buying of bad loans by ARC and INR 2000 crore recapitalization of banks will provide much-needed growth to the financial services sector. With small credit push and financial inclusion schemes announced by the government, the Fintech sector will get a chance to meet consumer expectations in FY21-22 and drive SME growth.
Mr. Yogi Sadana, Co-Founder, and CEO, Cashe:
The 2021 Budget has some great positives for the Banking, Digital Lending, and Fintech sector that will further strengthen the economy. The measures to clean up the NPAs in the banking sector by creating an ARC and AMC that will take over the stressed assets and sell them to AIFs is a welcome move and will help improve the health of the banking sector. It will also bring in a lot more transparency in the way the sector is run and how they report. Privatization, disinvestment, and monetization of assets are necessary and will bring in much-needed liquidity if implemented correctly. The government’s commitment to facilitate a world-class fintech hub at Gift city and Development Finance Institution capitalized with Rs 20,000 crore can open routes for a wide range of fintech offerings. Reduced margin money for start-ups, proposal to double MSME allocation, and Rs. A 1,500 crore financial incentive scheme to promote digital modes of payment will further encourage digital transactions in the country thus aiding financial inclusion.
Mr. Madhusudan Ekambaram, Co-Founder & CEO, KreditBee, and Co-Founder, Fintech Association for Consumer Empowerment (FACE):
The Government’s decision to boost entrepreneurship and digital payments in India is a testament to its commitment to realize its vision of an economically self-reliant nation.
The COVID-19 pandemic has given a fillip to the adoption of digital payments as more and more consumers realized the benefits and convenience they have to offer. I welcome the Rs 1,500 crore scheme announced by the Hon’ble Finance Minister in the Union Budget 2021 to promote digital payments as it will help create a robust and dynamic payments ecosystem in India’s emerging digital economy.
The extension of the tax holiday by one more year to March 2022, along with capital gains exemption, will boost startups by helping them tide over the economic crisis unleashed by the COVID-19 pandemic. Furthermore, the proposals to incentivize OPC incorporation along with measures like the removal of the restrictions on paid-up capital and turnover or reducing residency limit is in sync with the government vision of encouraging and catalyzing entrepreneurship in India.
Akshay Mehrotra, Co-Founder, and CEO, EarlySalary:
“This is India’s first digital budget with a clear emphasis on strengthening the country’s infrastructure. With Atmanirbhar Bharat at its core, Budget proposals rest on 6 pillars of health and wellbeing, capital and infrastructure, inclusive development, reinvigorating human capital, innovation and R&D, and minimum government and maximum governance. Along with upcoming min wages laws, building infrastructure will help to create jobs at a grass root level and uplift the lower-income working population. With 74% FDI in Insurance Sector, setting up of Development Finance Institution and Investor Charter will help to improve the financial service sector. Higher credit to agriculture will boost the Agri Economy.
The budget comes up with a much-needed healthcare shot required for the country’s deteriorating health infrastructure. The focus on innovation, R&D, skill development will create a path for new age start-ups in the country. Attention on primary education which will benefit 15000+ schools across the country. Lack of additional support in tax saving instruments or tax slabs is a damper to middle-class India which is going through the pain of COVID-19 impact.”
Mr. Srinath Sridharan, Strategic Counsel, and Independent markets commentator at Fintech Association for Consumer Empowerment (FACE):
Well-intentioned budget and clarity of focus in spending on infrastructure (both physical infra and social infra) development. If we get them execution correct, this could prove that we don’t need one single big-bang budget and a series of mini-budget & policy interventions can still create the same impact.
I do anticipate that the government might bring policy interventions later this year ahead to encourage digital finance, which could add to social and financial inclusion initiatives.
Mr. Ashwin Bhambri, CEO of Phoneparloan:
“The government has made the much-needed changes for the startup industry including the extension of tax holiday for another year and reducing margin money requirement from 25% to 15%. Such measures will provide Indian startups greater financial headroom to scale, grow, and execute their plans. The government further plans to infuse Rs. 20,000 crores into Public Sector Banks, which will ease the liquidity scenario to a great extent. Another key takeaway of the budget is the extension of the timeline of tax relief for affordable housing. Overall, such developments will extend a considerable relief to the taxpayers while also driving the demand of the realty segment. We are more optimistic about the future post the budget announcement.”
Mr. Ankit Gera, Co-founder, Junio:
“The Finance Minister and the Government of India have been very supportive in promoting digital payments, which is reflected in the budget speech today. While India has been one of the fastest-growing fintech markets globally, it is also important to note that the digital mode of payments has also emerged as one of the most transparent and trustworthy methods to track payment/credit repayment compliance. This can be reflected even in the budget announcement today wherein the Finance Minister, Nirmala Sitharaman proposed to increase the limit for tax audit for persons who are undertaking 95% of their transactions digitally from 5 crores to 10 crores.
Another encouraging factor has been 1,500 crores investment for a proposed scheme that will provide financial incentives to promote digital modes payment. This will further strengthen the buyer and provider market sentiment, and we are optimistic that a lot of market consolidation will happen this year. The extension of tax holidays for start-ups and capital gains will also spark greater capital activity in the investment landscape and serve as an enabler of robust early-stage venture funding for start-ups.”
Bala Parthasarathy, Co-founder, and CEO, MoneyTap:
“Union Finance Minister Nirmala Sitharaman presented Budget 2021 in the Parliament today Since we have seen that India is one of the fastest-growing Fintech Markets in the world. We do not doubt that the government’s support in creating and promoting a world-class Fintech hub at GIFT City will draw everyone’s attention, and can soon become the cradle of developing Fintech companies. We do see enormous growth not only in that region but also in creating jobs, drawing more people to work in Fintech. The exposure can bring in more innovation, technical know-how, help companies thrive in a collaboration set up, attract many incubators, investors, accelerators, help in creating an ecosystem for growth.
Regarding the Government’s Rs. 1500 crore influx to support digital payments, we all know that The Digital India Program is a flagship program by the Government of India. MoneyTap has also mirrored this goal in its aim to make more Indians digitally empowered, be able to use financial apps in better ways, improve knowledge and create apps that are easy to use, flexible, and can make people’s lives more secure. So, we are hopeful that any influx like this will help people get more convenience and accessibility to financial payments online.
Rahul Raj, Founder & CEO, FloBiz:
“I’d like to commend the government on presenting a comprehensive budget that aims to address some of the most important aspects of how we can build a resilient economy, especially in light of the global pandemic. The budget was pro-growth, pro-technology, pro-infrastructure, and also had an earmarked place for improving healthcare in our country. The initiatives announced will certainly aid economic recovery, whether that’s through capital infusion, change in taxation norms, programs for promoting domestic manufacturing, or development of relevant infrastructure – these will create large opportunities for the MSMEs and is a right step in the direction of building an “Aatmanirbhar Bharat”.
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