Budget 2019: Fintech Companies Hope Government Could Revive the Economy
In the last few quarters, the Indian economy has slowed down considerably which has further damped consumption in the country
Now that the general election is over, the verdict is out and Narendra Modi government 2.0 has sworn in, all eyes are glued to the next big event of the year – Union Budget 2019-2020.
So far, the fintech industry has had an interesting year, especially with the introduction of the sandbox by the RBI. However, there is a lot more the industry is looking forward to, from the Finance Minister Nirmala Sitharaman and her maiden budget. Here are some of the expectations:
Ease in the Business Environment
In Modi government’s last term, the fintech industry thrived on the Digital India outlook which allowed customer on-boarding through eKYC. However, with the Supreme Court’s decision to ring-fence private companies from accessing Aadhaar data, eKYC has been a challenge for the industry.
Gaurav Gupta, Co-Founder and CEO, Myloancare.in’s says “The fintech industry is looking forward to more clarity or direction on eKYC using Aadhaar and a further push to digitalization that can allow them to offer instant loans and reach out to the previously unbanked population of the country”
Even Vinay Bagri, Co-founder and CEO, NiYO.in’s opinions echoed with Gupta as he feels the government should push digitalisation further along with tax reliefs along with containing the liquidity crisis.
He adds, “Both the Ministry of Finance and the RBI has been very supportive in creating an enabling environment for the fintech sector in the last few years. We are hoping for tax relaxations for fintech companies and payments players which can pave the way for the fintech industry to increase investments in product innovation and customer service."
Boost Domestic Economy
Though the last budget prioritised growth, infrastructure expansion, financial inclusion, and digitization, according to recent data, the rate of economic growth has slowed down somewhat and the government needs to boost consumption. Bhupinder Singh-CEO & Founder, Incred feels the primary objective of the government should be to revive the growth rate for which it needs to attack the front foot by easing liquidity conditions and bringing in needed regulatory changes to aid job creation.
“The government also needs to keep an eye out for the fast-developing global trade headwinds and put in place precautionary measures to shield the Indian growth story from any escalating economic conflict. I believe that after the massive electoral mandate, this government is well-equipped to navigate all challenges and deliver a winning budget,” he added.
Between 2018 and interim budget 2019, domestic markets have witnessed a lot of volatility with more than 75 per cent of BSE All Cap Index gave negative returns. However, Tejas Khoday, CEO and Co-Founder FYERS-Free Investment Zone notes that post the election, the stock market has shown a little life and colour over the last couple of months with equity fund flows seeing a minor rise, accompanied by retail investor participation.
As a discount broking-stock trading platform, he expects the government to reduce LTCG tax arising from the sale of equity shares (without indexation benefit) from the current 10 per cent to a level of 5 per cent while increasing LTCG exemption gain from the current INR 100,000 to INR 200,000 and above. And the removal of current 10 per cent LTCG tax on equity mutual funds.
“Alternately, any move to increase the time period of LTCG tax from the current 1-year period to a 2 or 3-year period would severely dampen the stock market sentiment,” he added.
I am a Mumbai-based journalist and have worked with media companies like The Dollar Business Magazine, Business Standard, etc.While on the other side, I am an avid reader who is a travel freak and has accepted foodism as my religion.