As the dates for the release of the Economic Survey and Union Budget 2024 are close, leaders across industries and taxpayers have begun speculating what Finance Minister Nirmala Sitharaman will have for them. Since it is going to be an Interim Budget to be announced just before the General Elections in 2024, the Central Government may roll out various support schemes and policies for different sectors.
The Indian fintech industry, too, has a well-defined wish list for the new Union Budget. The Union Government introduced regulatory reforms for the fintech sector last year. Hence, the industry leaders expect further announcements from the Union Budget 2024 that contribute significantly to financial inclusion and broader economic development.
To know more about the Union Budget 2024 expectations for the fintech sector, read on.
Here’s a quick recap of the existing scenario:
Given that the fintech industry has pioneered technological innovations, the government may consider extending support and introducing regulatory reform. Check out some expectations from the Budget:
A quick glance at the yesteryears can be summed up briefly in the following way:
Here’s what to expect:
Due to the immense increase in the volume of UPI transactions, it would be necessary for the government to increase this support to fully support the banks for Merchant Discount Rate (MDR) loss. MDR is a fee that banks charge for processing digital transactions. The increased support will increase the accessibility of digital payments across India.
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As fintech companies show the highest intent for hiring in the Banking, Financial Services and Insurance (BFSI) spectrum, the industry possesses huge potential to support India’s demographic dividend. Akshay Mehrotra, Co-founder and CEO at Fibe, has also emphasised that it is the right time for India to incentivise the growth of the fintech sector in the Union Budget aligning with youth’s aspirations.
He has said, “Amid a slowdown and grim global economic outlook, the Indian economy appears to be in a favourable and optimistic spot. As per the projections of the International Monetary Fund, World Bank and Reserve Bank of India, India’s growth projections for FY24 range between 6.3 to 6.5%.
With the Interim Budget expected for 1st February 2024, there is an eagerness for an approach that resonates with the aspirations of the youth in this digital era. The government, focusing on the ‘Make-in-India’ push in the technology sector, is likely to roll out more initiatives to strengthen India’s position in the digital landscape and promote new talent.
Given the increased penetration of new-age technologies in businesses and to augment the economic impact of Generative AI, we expect increased collaboration between the public and private sectors and increased investments for training and upskilling the growing young workforce.”
He further remarks, “With an eye on economic resilience and sustainability, we hope to see a Budget that not only addresses the challenges of today’s digital economy but also builds a stimulus of financial inclusion and paves the way for a robust and progressive future for youngsters.
We hope that the Budget will not only nurture economic growth but also provide a space for the transformative power of Lending Tech companies, thereby weaving a narrative of financial empowerment that reaches every corner of our diverse nation. This will help in building a responsible lending and borrowing ecosystem,” he added.
Here’s a quick snapshot of what the fintech sector can expect from the upcoming Budget:
Moreover, there are speculations that the upcoming Budget presented by Nirmala Sitharaman may permit payment banks to extend credit facilities and introduce additional use cases of Central Bank Digital Currency (CBDC).
