Union Finance Minister Nirmala Sitharaman is set to present the annual budget for the financial year 2024-25 on February 1. This longstanding tradition, established in 2017, takes on added significance as the upcoming budget is an 'interim' one, coinciding with the impending general election in April-May. The complete financial roadmap for FY24-25 is anticipated in July, to be revealed by the newly elected government, be it a fresh administration or a re-elected one.
As the nation eagerly awaits the presentation of the interim budget for the financial year 2024-25, renowned FinTech leader Ms. Jaya Vaidhyanathan, CEO of BCT Digital and independent director on the Global Board of PwC, expectations from the budget measures on the FinTech industry and provides valuable perspectives on the impact of these measures on digital transformation.
Budget Overview and Fintech Expectations
In an exclusive interview with TICE, Ms. Jaya emphasizes the significance of the upcoming budget, which, being a 'vote on account,' will not witness major announcements but could still influence policy measures crucial for the fintech sector.
"This budget is a vote-on account, so the usual buzz regarding path-breaking changes is not there, and rightly so. However, without even a physical outlay, you can look at policy measures that could be beneficial," states Ms. Jaya.
She underscores the need for policy relaxations, such as ease of registration for Indian fintechs and regulatory relaxations from SEBI and RBI, to foster innovation and support real-time transaction-related solutions.
Reverse Flipping of Startups and Policy Interventions
Ms. Jaya addresses the concept of reverse innovation and suggests that India should become a creator rather than a beneficiary of innovations in the later stages of development. She emphasizes the importance of understanding the cultural context of India and innovating for India.
"Complete flip can only happen when we become the creators, when we kind of take this to various markets and then they look at let's start with an innovation idea in India and see how that works," says Ms. Jaya. She highlights the need for policy measures that ease entry into banks, simplify references, and facilitate a more business-friendly environment.
Custom Solutions for India
Drawing parallels to examples like the Tata Nano car, Ms. Jaya asserts that custom solutions for India require a unique perspective. She explains that addressing India's problems with an Indian lens is crucial for developing technology solutions that cater specifically to the country's needs.
"More and more we need to look at that. And a lot of exemptions in that when you say make in India, you can't apply for, you know, earlier you wouldn't be able to apply for large public sector bank RFPs if you didn't have three references before," highlights Ms. Jaya.
She stresses the importance of easing the entry of innovative solutions into the market.
As Ms. Jaya Vaidhyanathan shares her insights, it becomes evident that beyond fiscal stimuli and tax exemptions, the fintech sector in India requires a supportive policy environment for sustained growth and innovation. With the interim budget just around the corner, stakeholders in the industry will be closely watching for signs of policy measures that will shape the future of digital transformation in India.
India's Fintech Market
According to Deloitte Report, Indian FinTech is one of top five markets by value of capital funding and investments in the sector with nearly $270 million of funding in 2016.
The Invest India Report states that the Fintech sector in India has witnessed funding accounting to 14% share of Global Funding. India ranks #2 on Deal Volume. The Fintech Market Opportunity is estimated to be $2.1 Tn by 2030. Indian fintechs were the 2nd most funded startup sector in India in 2022.
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