Union Budget Expectations: Fintech, Business, And Entrepreneurship

We’re days away from hearing the Union Finance Minister Arun Jaitley presenting the union budget for the country, laying the roadmap for India’s collective spending, investment and taxation.

There are great expectations from the Union Budget of 2017. With the central government having tweaked the financial ecosystem in several ways, most notably through the demonetisation process, we’re waiting to see what further steps would be taken to simplify doing business in India.

Despite a global economic slow-down, the Indian economy was growing at 7.6 percent which was brought to a standstill by the demonetisation.

Talking from the business and entrepreneurship point of view, schemes and policies of government such as Make in India, Skill India etc. seem to have resonated with the public, but more needs to be done.

These are some things to look forward to during and beyond the budget.

In the meantime here some industry expectations from upcoming Union Budget:

Ease of opening account

For the fintech industry in India to take off in a big manner, the opening of new accounts needs to become easier. India is home to close to half a billion people who do not practice any kind of formal banking, be it through a bank, any regulated financial entity or even a mobile payment system. Despite this, over a billion people now have a cellphone or an Aadhaar number, or both.

In order to bring cellphone owners to the formal banking system, SMS OTP or Aadhaar-linked OTP is the key to completing e-KYC and e-signing to own new accounts – cashlessly, paperlessly, and presence-lessly. A handful of pilot runs are being conducted to allow people to open deposit and loan accounts through this method. We wish the government, through the RBI, would make it easier to hasten the opening of accounts through cellphones by the large-scale adoption of e-KYC, e-signing, and Digilocker.

Introduction of GST

Goods and Services Tax has been a hot topic for many months now and its roll-out has been clouded with uncertainty due to disagreements between the state and the central governments. During the budget, we expect Jaitley to provide some more clarity about the collection of indirect taxes leading to the rollout of the GST.

Lower corporate tax

This year’s Budget is likely to recast corporate taxation to boost economic growth which has slowed after demonetization. The corporate tax rate is expected to come down to 25 percent. This should cheer businesses.

Measures to stimulate cashless economy

It is expected for the government to bring more measures to promote cashless transactions. Some of these could be in terms of incentives and cash-backs. The government may promote it by providing incentives to use digital platforms such as UPI, e-wallets and netbanking. Doing so would also encourage fintech businesses to come up with innovations to increase cashless transacting.

Conclusion

To conclude, after the slowdown due to demonetization, expectations are high from this year’s budget. There’s going to be sharp focus on indirect taxes, ease of business, and going cashless. We’re hoping measures would be taken to stimulate growth.