Mr. Gaurav Jalan, Founder & CEO, mPokket
“The constant innovative reforms and technological advancements have provided an impetus to the growth of the FinTech industry in India. With the annual budget just around the corner, it is expected that the government will prioritize the needs of the FinTech players and implement policies to add to their growth trajectory.
It can be expected that the government will bring in reforms to strengthen the partnerships between FinTech institutions and banks. We are expecting that the Finance Minister will take into account the financial burden on start-ups and suggest policies to ease it. In the last budget, she gave major tax reliefs to start-ups and employees, in order to boost their development and to resolve the dual taxation issue and the tax burden that employee stock ownership plans (ESOPs) have on employees. However, the qualification criteria were too stringent, and as a result, very few start-ups could gain benefits from them. So, we can expect that the government will look into this and provide tax relief to budding FinTech start-ups and their employees.
India’s journey to financial inclusion is being paved by exceptional financial solutions provided by FinTech companies. The work that we are doing to make financial services accessible to all is a major positive outcome of digitization. FinTech will continue to grow at a faster rate and penetrate deeper into the country only if rural areas have a strong digitization network. This sector expects more assistance from the government to develop strong partnerships with banks and financial institutions in order to foster better financial inclusion, both offline and online.
The upcoming budget should also consider and offer tax benefits on the total expenditure incurred by FinTech startups, maybe in the form of a small GST subsidy. “Since personal loans now make up the bulk of the loan market, efforts to offer some form of tax refund for people who take out personal loans and education loans, similar to what those who take out house loans receive, would also be appreciated by people who take out such loans.”