Budget 2024 Expectations Highlights: Startups eye angel tax relief and health tech boost in Budget
'In anticipation of the upcoming budget, the fintech industry is hopeful for policies to drive innovation and digital transformation across India. Historically, budget allocations have prioritized key sectors such as agriculture, auto, and MSMEs. Building on this foundation, fintech companies are urging the government to introduce schemes and incentives that support their expansion into underserved sectors to enhance financial inclusivity.
The government can help create innovative solutions while maintaining financial stability by fostering collaborations between fintech and traditional institutions.The government must address foundational issues that impact the broader economy and continue efforts to formalize informal employment. Initiatives such as the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2024, which aims to provide social security for gig workers, are commendable.
More such legislation can help establish a formal financial structure, making formal financial services more accessible. Reforms concerning cooperative banks should be emphasized, and policies should be introduced to enable fintech's contribution to the ecosystem's growth. The Ministry of Cooperation should engage formally with fintechs to promote the digitalization of banking services.Optimizing the tax structure to empower the middle class and drive consumption will greatly benefit the fintech industry. Maintaining UPI as a free service, with no MDR on payment instruments, is essential.
Additionally, fintech companies should have easier access to incentives through a more transparent process.It is commendable that the government acknowledges the industry's maturity and the reduced need for stringent oversight of minor infractions. However, similar to the support provided for MSME growth, initiatives should be introduced to allow fintech companies to participate in government tenders and access financial opportunities currently exclusive to banks. Integrating fintech into the government's larger initiatives is crucial for fostering innovation and economic growth.
For example, the NABARD assists the government, the Reserve Bank of India, and other organizations in rural development and offers training and research facilities for banks, cooperatives, and organizations working in this field. Allowing fintech companies to directly leverage NABARD's opportunities would benefit the overall economy. By accessing NABARD's resources, fintechs could develop tailored solutions for rural financial needs, enhancing financial inclusion and driving economic growth in underserved areas. This integration would support a more robust and inclusive financial ecosystem nationwide.'
