Sumit Chanda, Founder and CEO, Jarvis Invest
“We expect the budget to be favourable for the retail investors. Hopefully some positive steps should be taken on Capital Gains and income classification which will be a boon for the retail investors and traders. We also hope that the FM incentivizes Fintech start-ups especially those using AI. We can hopefully see positive news for manufacturing, Renewable Energy, Healthcare, EVs.
Salaried workers are the main source of the country’s tax revenue and any changes in their taxation will have a significant impact on the economic recovery. There has been murmurs about the tax exemption limit being increased to 5 lakhs from the existing 2.5 lakhs. I would certainly look forward to it. It would mean higher disposable income which can lead to higher consumption and investments. This can definitely boost the economy.
We, as a country, have a very good opportunity to become the manufacturing hub to the world. If the manufacturing sector can be incentivized in some form, this dream can be realized. The Central Government can certainly nudge the State Governments to implement the four labor codes. A reduction in the corporate tax will go a long way in making both the manufacturing and the service sectors grow. Any positive news on these fronts will be a big boost to the markets.”
Anand Kumar Bajaj, Founder, MD & CEO, PayNearby
Presently, India’s path to financial inclusion is being paved, courtesy of the ground-breaking financial solutions offered by leading fintech players. A robust tech stack riding on the back of a strong distribution network has opened doors for Bharat to access innovative financial products and services. The work that we are doing to make banking services accessible to all in Bharat is a case in point of the one-of-its-kind infrastructure that we have built to relay these services. However, for these services to reach the citizens in the hinterlands needs technology, security, trust and the necessary Government support. Towards this purpose, Budget-2023 should urgently consider and offer some tax benefits on the total expenditure incurred by fintechs involved in the financial inclusion mission. A GST subsidy, even in a small percentage, will go a long way in helping banking services and Government benefits reach the masses with much ease. Plus, this will encourage companies in the financial inclusion space to innovate more and build revolutionizing technologies to make financial services available to everyone, everywhere.
Today, more than 90% of PayNearby’s BC (Business Correspondent) network is committed to operating in tier II and beyond regions, serving as banking hubs in locations with limited financial infrastructure. To ensure the viability of this network in offering uninterrupted services to all across the country, we sincerely hope that in this Budget, the GST and TDS for financial inclusion services at BC outlets to be waived off or at least reduced. This will ensure sustainable growth and inspire more and more last-mile retail banking agents to offer seamless banking services from their stores to all citizens in Bharat.
We are moving into an exciting phase wherein fintechs, armed by the BC network, will become the force multipliers in India’s inclusion endeavor. We are positive that this Budget will be a game-changer for the financial services ecosystem, where these small yet significant steps will help bridge the urban-rural divide and bolster India towards the $5 trillion economy benchmark much sooner than later.
Bhavin Patel, CEO and Co-founder of LenDenClub
Peer-to-Peer lending has emerged as an alternative financing business model recognised by RBI. During the pandemic, the segment has proven to become a mighty source to bridge the current credit gap. However, we need help to strengthen our contribution to the government’s vision of financial inclusion. It would be helpful to receive indirect benefits for the overall digital lending sector, such as incentives or tax benefits.
Additionally, P2P lending has evolved as a prominent investment asset class, ensuring the flow of investments from those with excess to those in need. While we work to meet the credit demands, we need assistance from the government to open the supply side by incentivising P2P lenders with tax exemptions up to a certain income. Further, it should allow bad debt write-offs, enabling defaults to be treated as capital losses during filing returns.
Not just for lenders but also on the borrowers’ side, personal loan repayment can become a part of the exemption under section 80C.
Furthermore, asset-based lending should be allowed to boost the confidence of lenders. This will also encourage innovation in secured lending, while the current innovation is focused on only unsecured lending.
Deepak Kothari, Co-founder of ftcash
The Union Budget 2023-2024 has the opportunity to help provide the fintech sector with the much needed impetus. The key areas where government support will go a long way are-
- Liberalisation and Enhancement of Credit Lines from Banks-Currently fintechs collaborate with banks on a one to one basis. The provision of a government scheme which provides a sovereign guarantee by the government of such credit lines will help channelise and enhance access to funds for fintechs and also allow targeting of certain sectors/segments/regions in a cost efficient manner.
- Rationalisation of GST Input Credit Framework in Colending Arrangements-Fintechs today collaborate with other financial services players and invariably in such arrangements there’s a potential loss of Input Credit in the current GST framework. Ensuring that the input credit is fully provided for will go a long way in ensuring that revenue leakages are avoided and benefits can be consequently passed on to the end consumer
- Enhancement of Legal Framework for Wilful Defaulters-The legal resolution for defaulters today is mired in a lengthy process which is inefficient and clogging the legal system. A seamless, efficient and transparent process which provides for a time bound resolution of cases where EMIs go into default will ensure that the financial services industry is strengthened. For example today if businesses don’t pay GST, there’s a freeze which happens on the accounts, a similar framework for Sec 138 cheque bounce cases will ensure that wilful default is minimised.
Headquartered in Mumbai, ftcash, an NBFC and a responsible lending Fintech was founded in 2015 by Sanjeev Chandak, Deepak Kothari and Vaibhav Lodha. The company creates an open architecture-based platform for merchants to initiate digital payments in less than five minutes by aggregating all payment methods including credit and debit cards, net banking, mobile wallets, UPI and PayPal. The company has more than 300 employees across eight states in India and over 60,000 merchants in its network. It has disbursed Rs 600 crore worth of loans till now. Ftcash is witnessing 22X growth in AUM since 2019. The company is expecting disbursals to grow 3X by 2023. ftcash is backed by several investors including Accion, FMO and IvyCap Ventures.
Sumeet Mehta, Cofounder & CEO, LEAD
“Policy promotes the use of technology in teaching and learning. The direction and guidance of the Ministry of Education, as per the policy, is to promote multimodal learning so that high quality resources are made available to all students, irrespective of location or background. This can be enabled by increasing the penetration of digital infrastructure in schools and educational institutions. Digital tools and content in smart classrooms are key to enriching students’ learning.
GST exemption on the supply of goods (including TVs/tablets for digital education, currently @28% GST) and services (used for teaching and learning applications and content, currently @18% GST) to educational institutions and intermediaries can reduce the overall cost that is currently passed on to schools and parents. This will make goods and services for education more affordable, and will foster the implementation of NEP across the country.
Additionally, GST exemption on printing of school textbooks will make these books more affordable for low-income parents. For the same reason, printing and service of assessments/examination papers that are a part of the curricula in schools should also be exempted from GST.”
LEAD is India’s largest School Edtech company founded in 2012 by Sumeet Mehta and Smita Deorah, with the mission to transform school education in India. It combines deeply researched curriculum and pedagogy with technology to deliver an integrated system of teaching and learning that improves student learning outcomes and teacher performance in 3000+ schools across India. LEAD’s integrated system is available to schools in 400+ towns and cities across India, reaching 1.2 million+ students and empowering over 25,000 teachers. LEAD-powered schools provide children with international standard education and national-level exposure for all-round growth, with a focus on helping them become confident and succeed in…