Indian Union Budget 2021-22: How budget can promote digital payments

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January 28, 2021 6:50 PM

With the pandemic providing the necessary thrust to digital payments, there is an increased need for advancement of end-to-end infrastructural as fragmentary solutions may not sustain in the long run.

union budget 2021, budget 2021-22The upcoming budget 2021 is expected to add value to the economic relief announced following the pandemic by various means of incentives, the introduction of new policies, and tax reliefs.

Union Budget 2021-22 Expectations: A key result of the pandemic was a huge upsurge in digital payments, leading to the need for quicker digital transformation through building relevant infrastructure and capabilities. Industry experts say the rise of fintech in India can be attributed to various macroeconomic factors, including the adoption of cashless society especially post COVID, extensive penetration of smartphones and a supportive regulatory regime.

The upcoming budget 2021 is expected to add value to the economic relief announced following the pandemic by various means of incentives, the introduction of new policies, and tax reliefs.

Ankit Gera, co-founder, Junio says, “In the upcoming Union Budget, we hope that favourable policies are introduced to ensure large-scale penetration of credit instruments and spur demand in the economy by supporting consumption.”

Additionally, experts say that KYC formalities should be relaxed since this comes as a huge challenge for fintech players in terms of their scalability. Gera says, “Reduction in GST for the financial services industry in order to boost the entire ecosystem and transfer the benefit to consumers by lowering the overall transaction cost, could be a welcome move. With the pandemic providing the necessary thrust to digital payments, there is an increased need for advancement of end-to-end infrastructural as fragmentary solutions may not sustain in the long run.”

At the same time, Nityanand Sharma, Co-Founder and CEO, Simpl says, “Large, traditional banks and financial institutions should partner with fintech firms. These institutions will benefit from new-generation digital lending technology expertise, and fintech players, in turn, will gain the advantage of solid structural backing and regulatory competencies that such large organizations provide.

He further adds, “We also expect a concerted focus on increasing last-mile credit access for businesses, that will enable us to make a tremendous mass impact on end-users, as UPI payments did.”

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