Give tax incentives to consumers, merchants & ecosystem enablers

Mumbai: Even as there was a surge in digital payments, the experts want that the forthcoming Budget should consider offering tax incentives to consumers, merchants and ecosystem enablers.

The year 2021 was a phenomenal year for the Indian fintech and startup industry. With over 40 startups attaining unicorn status in the year, the startup industry witnessed tremendous growth. With regards to the fintech industry, India saw continued explosion in digital payments and increased adoption of digital modes of payment. Around 44 billion digital payments were recorded across India in 2021. The Union budget 2022-23 must take into account this growth in the industry and continue to provide incentives for this industry to thrive in the coming months.

"Given the surge in digital payments, the budget should consider offering tax incentives to consumers, merchants and ecosystem enablers," says Murali Nair, President of Banking, Zeta.

The digital payments ecosystem can be a force multiplier for economic growth. Spurring this industry is therefore is a great way for accelerating overall economic growth and bringing about greater transparency in economic activity, he said.

In order to accelerate innovation in the fintech space, the budget should also support more partnerships between banks and fintechs - this will aid in pushing the economy towards financial inclusion.

"We expect the new budget to include supportive initiatives to provide a modern payments framework which can ensure high-quality performance while gearing up for the next wave of transformation," Nair said.

The Indian fintech ecosystem has revolutionized the banking industry to a great extent in the past two years. In the year 2021, we saw increased collaboration for growth between banks and fintechs. Neo-banks also paved the way for financial inclusion and have proved to become the next big thing in the banking industry.

Kapil Banwari, Founder and CEO, Fyp says, "We expect the Union Budget 2022-23 to undertake measures to support and boost the growth of neo-banks and fintechs in India. With full-stack digital banks proposed by the government think tank, NITI Aayog, we hope it opens up doors for growth and opportunities in terms of foraying into full-stack banking. Moreover, we expect the budget to consider reforms and policies that provide increased space for homegrown innovation. A structured regulatory framework for the functioning of neobanks in India would also be a welcome move."

"The pandemic has been extremely straining and challenging for the retail sector. The lockdown and restrictions imposed for brief periods, mandating limitations on retailing hours, movement of people, operational days, entry basis vaccination, etc., have all resulted in retailers and establishment owners incurring heavy losses. While the festive season did boost sales and growth trajectory, statistics did indicate that things were slowly pacing back to recovery. The new variant and the surge of cases have again slowed down business. The retail sector contributes a huge percentage to India's GDP, ranging from an average of 8 to 10 per cent. This industry, which is worth billions of dollars and employs millions of people, must receive a much-needed boost from the government to push it back to recovery and elevate the industry.

Mukesh Kumar, Chief Executive Officer, Infiniti Malls, says, "We are hoping that the government takes the situation under consideration and allocates resources to plan for the revival of the retail sector in the upcoming Union Budget. The allocated resources could essentially help a lot of small retailers who have been the worst affected, as well as others in the industry." Nova Benefits is an employee wellness platform focussed on corporate health insurance. Saransh Garg, Co-founder & CEO, Nova Benefits says that currently the GST levied on the purchase of health insurance policies or renewal of existing policies stands at 18 per cent.