“There have been various incentive programmes launched by the Government in the recent several Budgets which have helped encourage digital payments, notably the Unified Payments Interface (UPI) based payments,” stated Mr. Mandar Agashe, Founder MD & VC of Sarvatra Technologies. The government’s “Digital India” project, which aims to promote financial inclusion, is in line with this. In the forthcoming Budget, we anticipate the trend to continue. The mission of UPI 2.0 should be to continue serving the unserved and underserved with its most recent products, UPI 123 and UPI Lite being the two most important ones that will help penetrate India’s semi-urban and rural areas due to the ease of accessibility it provides to those who cannot afford smartphones but are using feature phones and want to transact digitally. Self-Help Groups (SHGs) may also encourage the use of offline payments using UPI at the gramme panchayat or village levels. This will facilitate the UPI’s rapid growth. The general public’s trust will start to grow once SHGs begin employing the offline UPI payment method. For the last-mile village, if such SHGs are given incentives for using digital payments, it will be a major game shift.
Fintech companies might undoubtedly benefit from tax reliefs in the upcoming budget, according to Monish Anand, CEO and founder of MyShubhLife. We are expecting for a decrease in starting taxes, maybe even the elimination of GST up until a particular company size is reached. Relaxing tax regulations to some extent would enable the fintech sector to expand its reach and run more efficiently in order to provide smooth loans to borrowers, while still guaranteeing the appropriate level of control. In terms of the FLDG (First Loan Default Guarantee) concept, additional clarification is required. We want the authorities to think it through and consider placing a sensible limit on FLDG models. To lessen the burden of taxing ESOP sales, the government must also widen the eligibility for tax relief to start-up workers. Overall, the government might help the fintech sector further by liberalising both direct tax and GST rates.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Palladian Financial.
