Budget 2018: Fintech and digital payment companies are betting big on the upcoming Union Budget and have many expectations from Finance Minister Arun Jaitley, particularly in view of the Modi government’s digitisation drive. These include improving the adoption of digital technologies across industries as well as announcing measures to upgrade digital infrastructure.
“The last few quarters have been transformational for the fintech and banking payments services industry in terms of increased governmental policy push such as Aadhaar pay, UPI and others. These policy initiatives have not merely encouraged consumers onto digital platforms, but have also promoted financial inclusion. However, it would be appropriate to point out that cash still co-exists along with increased push towards digitization,” says Ravi B Goyal, Chairman & Managing Director, AGS Transact Technologies Ltd.
Goyal adds that as cash continues to be the preferred mode for transactions, especially in semi-rural & rural areas, they strongly believe that the government’s pro-business policies will usher in a new era of prosperity providing stimulus to cash and digital payments alike.
Also, in line with the government’s vision of promoting digitisation in India, it becomes imperative that it is made easy for people in the lower socio-economic strata to become a part of this revolutionary change. “For example, people without a PAN number still have to rely on paper-based Form-60 to complete the account creation process. So, I would request the government to work out a strategy to manage this digitally,” says Ramki Gaddipati, Co-founder and CTO, Zeta.
The GST reform has given the essential digital push to the economy transforming sectors of agriculture, manufacturing and more. “The government should look at improving the adoption of digital technologies across industries if we need to compete with manufacturing hubs such as China and the US. The government needs to move towards 100% digital procurement process where start-ups can compete effectively and efficiently,” says Rahul Garg, Founder & CEO, Moglix.
The industry also wants the forthcoming Union Budget to announce measures to upgrade digital infrastructure, especially with regards to the protection of data stored online, so that consumer confidence is enhanced.
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Need to finalise regulatory rules governing fintech businesses
Another suggestion is that the government should continue its firm stand on not allowing unnecessary loan freebies to the agro or the MSME sector as passing on such freebies destroys the credit discipline and rewards offenders, and thus indirectly punishes the diligent loan repayers.
Further, “the regulatory rules governing the fintech businesses need to be finalized on priority. Last year has seen these go through discussions and consensus building. This year should see the rules formalized into policy pronouncements. The focus of the regulators should be to enlarge the reach of organized lending, especially in bringing the excluded parts of the economy into the fold of organized lensing. Fintechs are, and will, play an important part in achieving this objective,” says Sanjay Sharma, MD and CEO, Aye Finance.
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Start-ups need a boost
Some believe that the country has a great potential to foster a start-up environment and right initiatives and incentives can indeed go a long way in encouraging millions of talented individuals to succeed.
“The Indian government is taking great strides towards digitising the entire country with its Digital India
Some believe that start-ups are doing a great service to the nation. Beside obvious things like job creation, FDI and innovation, they are bringing consumer-centric approach to the business. “This is pushing well entrenched old-world companies to look after customers as individuals with varying needs, unlike a production belt approach which they presently have towards the customers. Naturally ‘startup’ ecosystem needs soft-hand approach from government and regulators. Of course, the authorities also need to differentiate based on good and bad intentions of the startup,” says Satyam Kumar, Co-Founder and CEO, Loantap.in.