As Union Budget 2024-25 is eagerly awaited, the fintech industry is expecting policy directions that will shape its future trajectory. Fintech companies are confident that Budget proposals will offer a strategic opportunity to reinforce India’s position as the global leader in digital innovation and financial technology.
Expectations revolve around fiscal incentives and regulatory frameworks that foster innovation and accelerate digital transformation. Enhanced regulatory clarity is the foremost anticipation of fintech companies.
Finteh players also expect policies that support entrepreneurship, help attract investments and promote adoption of modern technologies such as blockchain and AI.
Speaking to the Daily Guradian, Arpit Chug, Chief Financial Officer, Razorpay, said: “There is a collective anticipation for policies that will further nurture a growth-friendly environment. Critical factors include enhanced regulatory clarity, better access to funding, lower TDS rate for startups and extending the TDS exemption enjoyed by banks to startups would alleviate working capital challenges.”
Tax incentives for startups are crucial. Manufacturing companies benefit from lower tax rates to boost activities in line with the Make-in-India initiative. Chug said similar tax incentives should be considered for startups, especially those working to strengthen the Digital India initiative.
S Anand, Chief Executive Officer and Founder of PaySprint, a leading fintech venture, said budgetary provisions that encourage green fintech initiatives, promote ESG (Environmental, Social, and Governance) principles, and incentivize sustainable growth practices are welcome. Such steps will enhance India’s reputation as a responsible player in the digital economy, he added.
Measures to accelerate digital transformation and bolster cybersecurity infrastructure are keenly anticipated in Budget 2024-25. FIntechh players expect budget to focus on safeguarding the fast-growing digital economy.
Beams, a fintech fund that primarily investing in the growth stages of companies, hope to see reforms aimed at financial inclusion, which will expand access to financial services for underserved populations.
Sagar Agarwal, co-founder and managing partner of beams fintech, said the fintech industry is looking forward to dedicated policy announcements in several key areas. “We expect guidance on the adoption of cloud technology, which is vital for scalability and innovation in our sector. Furthermore, clarity on the implementation of Central Bank Digital Currency (CBDC) will help fintech companies prepare for this significant shift in the financial landscape,” he said.
Stating that the MSME sector, a crucial driver of our economy, requires increased access to credit, Agarwal said, “We hope the budget will address this by allocating a larger credit corpus for these enterprises.”
Maintaining India’s position as a global fintech hub also requires tax incentives that will foster research and development in emerging technologies, he said.
“Cybersecurity and data privacy are paramount concerns in an increasingly interconnected digital landscape. Strengthening cybersecurity frameworks and ensuring robust data protection measures will be critical to maintaining consumer trust and safeguarding the integrity of financial transactions. The budget provides an opportunity to introduce comprehensive cybersecurity policies that mitigate risks and enhance resilience against cyber threats,” Anand said.
