Fintech Firms Confident of Robust Digital Infrastructure by the Government
Several reactions from various sectors of the country trailed the 2017 Union budget presented by Finance Minister Arun Jaitley on Wednesday. The Union Budget 2017 – 2018 is the fourth budget by the Narendra Modi Government and for the first time, Railway budget was merged with the General Budget.
As far as the Indian startup sector goes, the fintech companies have cheered the measures for tax concessions for startups and digital economy.Here is how CEOs of some of the most prominent fintech startups reacted after the budget announcement:
Incentivizing Cashless transactions Will Upgrade Digital Infrastructure
Sashank Rishyasringa, Co-founder and Managing Director, Capital Float feels this budget is transformational at its core, aimed at propelling India towards becoming a digital economy while increasing employment opportunities and having a determined focus on rural development.
“The Government’s push for digitizing infrastructure is heartening. Incentivizing cashless transactions at fuel stations, hospitals, railways, rolling out 1 million POS terminals by March and proposing a payment regulatory body to the RBI will help create a robust architecture for digital transactions. Activating Aadhaar Pay and providing referral bonuses and cashback schemes to promote BHIM will also drive digital money in Tier 2 and Tier 3 markets," he said
Incentivising Digital Payments Was The Need of The Hour
According to Isha Siraj Kedia, Founder, DoorstepForex , India is on the cusp of digital revolution and the push by the government for digital payments accelerates the opportunities for Fintech start-ups.
"The government is taking several steps to promote digital economy. Incentivising digital payments was the need of the hour. With the Referral Bonus Scheme for individuals and a Cashback Scheme for merchants, the government, is ensuring that both consumers and businesses benefit by adopting digital transactions. Also, along with prompting digital payments the huge task that the government now has is to ensure good connectivity across the country,” said Isha.
Good News For Start-Ups
Manavjeet Singh, Founder & CEO Rubique described Budget 2017 as good news for the startups.
He said “The increased period for profit-linked deduction for three years out of 7 years as against five years is welcome, as start-ups are not expected to make profits for the first few years. The need was for a 10-year period, but an extension to 7 years is nevertheless welcome.”
Budget Backing Payment Regulatory Board Is a Welcome Move
Mr. Rajeev Agarwal, CEO and Founder, Innoviti Payments Solutions believes a regulatory board under RBI will go a long way in bringing both inter-operability and reliability in payments.
"Apart from the broad support announced for further progressing the current push for increased digital payments, the intention to create a Payment Regulatory Board within RBI is a welcome move. One of the challenges in adoption of digital payment technologies has been lack of inter-operability between various payment innovations. This has led to increased friction in adoption at user level,” he said.
Digital Payments Will Be the New Normal in 2017
Bipin Preet Singh, Founder & CEO, MobiKwik laid strong emphasis on how the focus on digital payments will lead to revolutionary transformation in Indians' payment habits.
“Digital payments will be the new normal in 2017 and we are very excited about this. As we become more digital, India will see new taxpayers and better transparency in incomes.Upgrading digital infrastructure to support cashless transactions in rural and semi-urban areas will encourage more merchants and consumers to transact on non-cash and online platforms, “he said.
However, he also added that the government must have also considered promoting startups in the digital payments and digital security areas.
Tax Concession For Startups Is A Real Relief
“Being a startup in the fintech and IT space, one of the most debilitating issues is taxation. Start-ups in the country will certainly benefit from the budget announcement on tax concessions for startups in the first seven years is a minor relief, however, if the establishment criterion could have been relaxed, it would have been a boost for the startup ecosystem in this critical phase,” said Siddharth Arora, Co-founder, ePaisa in his view over budget .
“The aim to set up over 2,500 crore digital transactions for 2017-18 and 10 lakh Point-Of-sale terminals, will provide a stronger reach and deeper penetration for digital and technology driven services in India. Banks will have to partner with Fintech startups and work towards creating an environment that supports new innovations for digital technologies,” he added