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The anticipation around the Union Budget 2021 is tremendous, especially for the fintech industry, considering the seam it has picked up in 2020. Given the surging prominence of digital initiatives in multiple facets, further attention needs to be given to the budget, towards enhancing its application and effectiveness.
The multi-pronged implications of the same could be tax and policy reforms for the start-ups and tech-centric firms, prominent support towards strengthening the digital infrastructure, and profound support towards local innovation in the Make in India initiative.
Further, a clear and detailed guideline on global listings is the need of the hour as more fintech players are ready to list their companies on foreign stock exchanges while awaiting clarity on legal requirements, taxes, and other details. Foreign listings can help fintech players get greater access to capital and enjoy more exposure to a larger investor base. Guidelines clarifying where the companies can get listed and taxations are one of the sector’s key expectations from the budget.
While the government’s effort towards providing liquidity support to financial institutions is appreciable, its efficacy can be improved by covering alternative lenders (like digital lenders). The same can be ensured with an institutional framework providing liquidity to the NBFC industry, holistically. While efforts have already been made towards instituting a regulatory framework for digital lenders, a definite stance is awaited.