Budget 2023: What Financial Technology Firms Are Expecting

Finance Minister Nirmala Sitharaman is set to present the Union Budget on February 1.

In light of the upcoming Budget session, NBFCs (Non-banking financial companies) and financial technology firms (fintech) hope to see an expansion of digital services across the country and more clarity on governance and norms.

Expectations of fintech players and start-ups from Budget 2023:

Sandbox regulation

Measures to improve the regulatory environment would be welcome by fintech companies. A dedicated fintech regulator or the implementation of a sandbox-style regime which would safely allow firms to test new products and technologies would be welcome moves. To be able to test and try new products without the fear of penalties would aid the growth of fintech firms.

Need For Level Playing Field

The fintech sector expects a level playing field for online and offline vendors, industry experts have noted. There have been demands from industry players for RBI to put in place a regulatory structure to govern the fintech sector. Industry players are hoping for clarity in regulatory norms which would aid firms operating in the sector.

Support To Fintech Start-up Ecosystem

Fintech start-ups would be hoping for tax breaks in the Budget announcement. Tax rebates for angel investors and venture capitalists and subsidies for fintech start-ups would attract greater investment in the fintech sector. Less red tape would encourage fintech firms to expand their network and bring in new people under the net of financial services.

Support To Digital Payments

Digital payments have become increasingly popular over the years. Fintech firms will expect policy announcements to boost digital payments in the country. Schemes and policies to incentivise the use of digital wallets by customers would be awaited by industry players. Concessions such as GST (Goods and Services Taxes) waivers for digital transactions in rural and semi-urban areas would accelerate the growth of firms operating in the payments sector.

Strengthening Digitisation

Fintech players are expecting digitisation and expansion of internet services across rural areas to aid their expansion. The augmentation of schemes to bring internet to the doors of a greater number of people could boost the bottom lines of these companies.