India s Fintech sector has a lot of a wishlist for the upcoming Union Budget 2022 -- 23 which will be presented by the Union Finance Minister Nirmala Sitharaman on February 1. The fintech sector expects a liberalised tax regime, relaxation of norms and FM to announce measures to ease the liquidity flow to non-banking finance corporations NBFCs and fintechs. They said financial inclusion was enhanced due to the operations of fintechs aimed at reaching the poor population.
It is important that the Government announce measures to help reduce the liquidity flow to NBFCs and fintechs. While ensuring the right degree of regulation, relaxation of norms and tax liberalisation will allow the fintech sector to boost their reach and operate effectively to provide innovative credit solutions to the borrowers, the right degree of regulation will be achieved. The focus should be on enhancing the country s digitisation bid, to empower consumers to avail various credit products, said FACE Madhusudan Ekambram, co-founder and CEO of the CreditBee and Fintech Association for Consumer Empowerment.
Some experts think that the government will introduce the Rajiv Gandhi Equity Savings Scheme RGESS to allow first time investors to save taxes while investing in stocks. The RGESS was discontinued after the Union Budget 2017. According to the NSDL website, the scheme was designed to promote the flow of savings of small investors in the domestic capital market.
Under this scheme, a New Retail investor can invest up to 50,000 in eligible securities and get additional tax benefit i.e. Under Section 80 CCG, there is a deduction of upto 25,000 rupees. This is over and above the limit of Rs 1,00, 000 currently available under Section 80 C of the Income Tax Act, 1961. The investor can avail of RGESS benefits for three consecutive years from the year in which the investment was made for the first time by the investor.
More than doubled the number of demat accounts opened in the last 3 years. This is a heartening trend as Indians' equity assets are held by Indians compared to global benchmarks, and this has risen from 3.5 crore at the end of 2018-19 to 5.5 crore and 7.3 crore in 2020-21 and October 2021, respectively. As an ecosystem, these new investors need to demonstrate the right behavior for an asset class like equity, said Vasanth Kamath, founder and CEO of online stock investment platform.
He stated that he would love to see the introduction of a scheme like the Rajiv Gandhi Equity Savings Scheme RGESS, which allows investors to save taxes while investing in a specific universe of stocks. This would incentivise investors to stay invested in a portfolio of relatively volatile stocks for the longer term, helping them witness the benefits of equity and compounding. Industry players want the government to lower translation costs in order to promote large ticket size payments in the B 2 B segment. Like last year s fund for incentivising the industry and offset losses incurred due to waiver of Merchant Discount Rates MDR on UPI and RuPay transactions, we hope that the finance minister will take further actions to minimize translational costs and promote large ticket size payments in the B 2 B segment. The government is expected to promote new business deployment solutions through a push towards prepaid transactions through the Unified Payments Interface UPI With the digital payment industry playing an important role in the implementation of transparency and formalisation of the economy, according to George Sam, Business Head and co-founder at the end-to- end retail transaction banking company Mindgate Solutions.
Akshay Mehrotra, CEO and co-founder of the online personal loan app EarlySalary, believes that the government should work towards helping customers get access to affordable credit on demand. We hope that the budget for 2022 will be a boon for the fintech sector as the lending space continues to grow. I think there should be changes in debt financing options to get access to financial institutions beyond banks.