Stepping up demand for tax concessions in the forthcoming budget, the fintech industry is stressing that the fiscal and non-fiscal incentives are needed to promote financial inclusion and move towards a less-cash economy.
The fintech industry and experts have urged finance minister Nirmala Sitharaman to lower the tax deductible at source (TDS) rates, saying such a move would free the capital for the sector without any impact on the government’s revenue.
Ms Sitharaman is scheduled to present the budget for the next financial year on February 1.
Nitin Jain, Partner, Financial Services, PwC India, said qualification criteria for digital lenders, short-term credit, partnership guidelines with loan service providers, data governance norms, transparency norms are all required to ensure an optimal business environment for digital lending.
Mihir Gandhi, Partner & Payments Transformation Leader, PwC India, stressed on increasing the scope of the Payments Infrastructure Development Fund (PIDF) and introducing Central Bank Digital Currency for wholesale and retail payment transactions.
Shruti Aggarwal, Co-founder, Stashfin, said the financial empowerment of women also leads to her family being financially empowered.
It will be encouraging to have a budget that is guided by this principle, with a specific focus on the digital financial inclusion of every woman to enable her to be financially ‘atmanirbhar’, she said, and expressed hope that the budget will incentivise smaller NBFCs led by women entrepreneurs through tax rebates.
On what should be in the budget, Kapil Mehta, Co-founder, SecureNow, said fintech plays a major role in providing access to finance and insurance for small businesses and individuals in remote areas.
“It would be extremely helpful if, in the Budget, TDS rate for fintech startups is reduced to 1 per cent. This will free up much-needed working capital without costing the exchequer because the TDS is refunded in any case for loss making companies,” he said.
Mr Mehta also suggested that to stimulate financial access, the government could have large PSUs create a financial inclusion fund, similar to the CSR requirements. This fund could be run in a commercial manner.
Nitya Sharma, CEO & Co-Founder, Simpl, stressed that there is an urgent need to deepen financial inclusion and create a more robust financial ecosystem that would be able to withstand future disruptions like the pandemic, much better.