With the new financial approaching, now all the eyes of the industry are on the forthcoming union budget 2022-23, provisions of which regarding tax laws, financial support, etc are bound to affect the industries in many different ways. Below is a list of comments of the industry leaders.
Mr. Alok Dubey, Chief Finance Officer, Acer India
“We are hoping this Budget, the government announces steps to revitalize and reorganise the economy which has been impacted by the pandemic. This can be a positive start to encourage sustainable growth and push Digital Infrastructure- 5G, edge computing, and secured data management in India. The comprehensive program for the “development of sustainable semiconductor and display ecosystem in the country” will be a boost in making India a global hub of electronic system design and manufacturing but we would like to see reforms that will drive consumption and improve consumer demand. We are optimistic about the upcoming budget and expect it to usher in a balanced combination of reforms and regulations which will, in turn, boost Digital India, contributing positively to India’s growth story.”
Mr. Rajan Navani, VC & MD, JetSynthesys and President of Indian Digital Gaming Society (IDGS)
“2021 was a make-or-break year across all industries when India Inc went into business recovery mode. Digital became a buzz word with multiple industries maximizing and leveraging its massive reach to stay ahead of the curve. While the pandemic extended a shot in the arm to tech-first and digitally-backed companies, there is still potential to grow the category further and for the digital economy to contribute 20% to the GDP from the current 8%. With the Union Budget coming up, we hope to see a stronger government focus on the gaming and digital transformation industry in the context of Atmanirbhar Bharat. India has the power to become a global gaming and e-sports hub creating huge employment opportunities. We expect the budget to further incentivize investments in digital technology, and particularly in the startup and scale-up ecosystem of India, which has been one of the brightest sectors of last year. This would give the already growing space a much-needed turbo charge. We would further like to see the government come up with ways on how more domestic capital can be invested in new age sectors, therefore finding a way to normalize long-term capital gains tax for private equity of 20% and match it to the long-term capital gain for public markets which is currently at 10%. We would like to see more investments pumped into the digital infrastructure, as digital has been one of the strongest areas coming out of the pandemic and needs to be further strengthened. Looking forward to the budget this year and hoping for the best.”
Mr. Alok Mittal, Co-Founder & CEO, Indifi Technologies
“In response to the economic hardship created by COVID-19, several liquidity measures to support the MSMEs were announced. However while the headline schemes were attractive the fine print made it very difficult for the new age fintech NBFCs to take advantage of the schemes. Due to such constraints the expected benefits of these support schemes did not reach/ transmit to the bottom of the pyramid MSMEs mostly catered to by fintechs/ small NBFCs. This budget must be in pursuit of better implementation of the schemes already in place. Further, the fiscal budget should announce measures to incentivize and strengthen support from SIDBI-like institutions and PSB’s towards lending to smaller NBFCs to ensure credit to SMEs at lower cost of capital.”
Mr. Sameer Kanodia – Managing Director and CEO of Lumina Datamatics Limited (a service provider for publishers and eCommerce companies)
“Everyone will be looking up to this year’s Budget for various relief measures. The pandemic has affected many industries, and it may continue for some time. Stimulus packages and lower interest rates have been a saving grace for the economy in the past. The IT and ITeS industry wants the government to give out better incentives, and it is expected that supportive measures may be provided at this time. Everyone pins their hope on this year’s Budget at the industry and an individual level. We feel happy to be part of multiple platforms that increasingly see content creation and consumption. The print segment and the traditional content platform have been under pressure, and demand for digital content will only increase. Unfavorable steps from the government may dampen the enthusiasm. Similar headwinds are seen in eCommerce, with retail trade going digital. Physical barriers, such as lockdowns and restrictions, hamper the local stores. They are increasingly adopting the online route. Government’s stimulus to this sector will further boost its contribution to the economy.”
Mr. Mitesh L Thakker, Founder & CEO, MissCallPay (Fintech startup)
“UPI as a revolution from India, has reached only 20 Cr users of 118 Cr mobile subscribers in India, Government should incentivize new users, primarily the Low Middle Income and Jan Dhan Account holders who on-board on UPI for the First time, also provide incentives to Fintech’s into Feature Phone, Voice & USSD based payments space to help absorb operational cost of technology so that UPI revolution reach into nook and corners of Bharat.”
Mr. Mahesh Palashikar, President, GE South Asia (Technology company)
“India’s commitment to achieve net zero emissions by 2070 is ambitious and prudent. However, to achieve this, we must make some important policy interventions today. Conversations on diversifying the renewables portfolio are gaining pace. Along with solar, we need policy paradigms to promote wind power, hydro power, nuclear power, green grid corridors, etc., to ultimately transition to round-the-clock hybrid power. Funding remains another critical need where government intervention would enable fast and smoother actualization of renewable energy projects in the country. I am hopeful that the upcoming Budget will directly address these specific challenges and ease the way for climate change financing to help the country transition to a net-zero emissions economy.”
Mr. Rajiv Bhalla, MD, Barco India (Developer of visualization and collaboration solutions)
The Indian Government is strongly focused on growth and development, and this trend has continued even during the pandemic. Given the hybrid normal we at Barco, are creating solutions aimed at promoting seamless remote work and bolstering the economy. We look forward to a budget which offers a roadmap for heightened economic revival, with greater spending on infrastructure and enhanced incentives for corporate capex. We believe that the country is still on track to achieve the $5-trillion vision by 2025 and expect a host of reforms aimed at empowering the start-up and entrepreneurial culture while augmenting healthcare and allied sectors. Technology, manufacturing, and R&D comprise the future of India and we look forward to initiatives aimed at making India a global super-power in these frontiers.
Mr. Bhavin Patel, Co-founder & CEO, LenDenClub [Fintech company]
Earlier last month, Prime Minister Narendra Modi emphasized the importance of transforming fintech initiatives into a fintech revolution to provide financial empowerment to all citizens. This notion led to the founding of the FinTech Department at the Reserve Bank of India. We believe it is a positive step to ensure that the authorities properly service the Fintech sector, and that the sector will gain more trust and thrive faster with the proper framework. It will assist in promptly recognizing and addressing the sector’s difficulties and developing opportunities in the right direction. The initiative will help FinTech companies find it easier to innovate and create new products to serve their clients better. Based on this excellent decision to make in the FinTech department, the sector anticipates more positive developments in the upcoming Budget FY 22-23.
Mr. Mandar Agashe, Vice-Chairman & MD, Sarvatra Technologies Ltd. [Fintech company]
We applaud the RBI’s foresight in creating a fintech division within its ambit. Thanks to digital banking, underserved populations now have improved access to banking services at the touch of a fingertip. Technology has been a significant facilitator in the rise of the digital economy, allowing it to reach out to far-flung locations. The RBI’s progressive move will aid in fostering innovation and accelerate digitization of technology and adoption of new delivery channels and product offerings across levels.
The new fintech department working closely with fintech providers representing the fintech ecosystem, will play a crucial role in re-aligning regulatory guidelines, chalking out industry responses while exploring new opportunities. Over the last two years, there has been a massive adoption of digital payment systems in India. This move by RBI will go a long way in strengthening the country’s fintech infrastructure to encourage the introduction of path-breaking services similar to Immediate Payments Service (IMPS), Unified Payments Interface (UPI). This will eventually improve and automate the delivery and usage of financial services across the eco-system.
Mr. Joginder Rana, Vice-Chairman & MD, CASHe [Fintech company]
We wholeheartedly welcome this very progressive move by the RBI. Fintechs will continue to play an important role in the financial inclusion of the masses in the years to come and we will see path-breaking innovations in the lending and payments sector. As the fintech landscape is maturing, the industry is witnessing a rapid growth in financial entities and technology firms experimenting with a host of financial and technological solutions in a bid to address untapped segments and expand to newer markets. Therefore, setting up a separate FinTech department within RBI will aid in accelerating innovation and experimentation while driving transparency and the overall progress of the sector.
The new fintech department will play a significant role in representing industry members adequately and will provide a robust framework that will eventually empower the sector to stay on top of emerging trends. Besides addressing impending challenges in a timely manner, this will also help drive opportunities for both incumbent market participants and newcomers alike while empowering every citizen.
Mr. Anand Kumar Bajaj, Founder, MD & CEO, PayNearby [Fintech company]
The Reserve Bank of India (RBI) has always nurtured innovation and created frameworks to support technological adoption in the financial community. After the Committee on Deepening of Digital Payments (CDDP), Reserve Bank Innovation Hub (RBIH), and Regulatory Sandbox (RS), the setting up of a ‘fintech department’ is yet another encouraging step in this direction.
India is all set to become Asia’s top fintech hub with an 87% adoption rate compared to the global average of 64%. We are on the cusp of a digital revolution and are thankful to have a regulator who is far-sighted and proactive. The fintech department by RBI, will not only focus and facilitate innovation in the sector but will also recognize the challenges and opportunities associated with it and address them promptly. The department comes at an opportune time to guide us better and provide a solid foundation for fintech companies to fall back on. This initiative will be key to empowering the fintech sector while propelling the growth of the Indian economy. Over the years, India has seen quantum progress in the adoption of fintech services in terms of speed and scale. The defined department will make it easier to get policies developed and implemented on time, garnering consumer trust. Spearheaded by RBI, we are hopeful that the industry will expand and penetrate newer areas in financial developments, helping India leapfrog into the next orbit. Zidd Aage Badhne Ki!
Mr. Prashant Lohia, CEO and Founder, Ginesys (Provider in the ERP and POS space)
“The ongoing pandemic has proved a catalyst for the digitization drive, with service providers stepping in to bridge the gap between the rural and urban landscapes. The Government is keen on a Digital India, and we expect the Union Budget 2023 to depict a greater and more sustained push towards the same, especially with regards to digital payments and retail technology. We expect the Union Budget to bring in more reforms for domestic retail manufacturers and brands as this would drive the Make in India and AatmaNirbhar Bharat initiatives while offering support and strengthening the local retail landscape. We are also keen on more clarity around the e-commerce guidelines and hope the Government promotes the sector in the upcoming budget. Further, we look forward to a well-calibrated reduction in income tax slabs as this will help taxpayers save money and, the money thus saved can fuel further consumption and economic growth, helping revive the economy as a whole. We also hope that the upcoming Budget focuses on growth and promotes spending by dropping the already deferred GST on textiles and garments.”
Mr. Amit Relan, Director & Co-Founder, mFilterIt (Fraud detection & prevention technology company)
“The startup ecosystem in India has already emerged as the third-largest in the global market, which highlights the massive growth of the sector in the recent years. Moving ahead, the ecosystem requires a more focused approach in terms of access to capital, allocation of more funds by the government, policy reforms for ease of doing business and creating a more supportive ecosystem in view of the pandemic’s impact. About the Indian ad-tech industry, it’s likely to cross $10 billion in revenue by 2030, making it one of the key contributors in terms of growth, job creation and export of services. In the global as well as Indian market, we can observe increasing ad spends over digital platforms which is likely to reach 60% of total advertising spends in 2022. Even the Indian government’s overall spend on digital advertising – including national and state governments – has already topped 3000 Cr per annum, which involves outreach, promotion, and adverts. At the same time, today the techniques and tricks used by the bad actors in the value chain -pose a greater threat to advertisers’ reputations through Brand Safety and Brand Infringement issues, leading to about 7-8% wastage of the overall digital spends. In this view, one of our key recommendations for the upcoming budget would be that the government should subject digital advertising expenditures to auditing in the same way that it subjects other expenditures, which goes beyond determining if procedural regulations were followed and include auditing for results as well. The government, with a vision of a $1 trillion digital economy and the massive shift to digitalization in recent years, should also pay attention to the ad-tech industry and take financial steps to help India’s existing ecosystem chart progress that will not only make India Atmanirbhar in the domain but also globally. Moreover, launching unique output-linked initiatives for the sector is crucial for India to position itself as a worldwide leader.”
Mr. Akshay Munjal, Founder, and CEO, Hero Vired [EdTech company]
“The pandemic has reaffirmed the significance of digital technologies to sustain the momentum of learning. Hence, the Budget should consider EdTech as a potent tool that can multiply the reach of education. It should prioritize scaling up allocation to the EdTech sector by 7-8% from 2021. In addition, rationalizing 18% GST in online education services would go a long way in making e-learning more affordable and realising its benefits. Moreover, there should be a tax rebate on expenses incurred on online learning programs. This is especially important in India as we face a unique ’employability paradox’. Against the backdrop of conducive policies such as the National Education Policy (NEP), strengthening infrastructure, ahead of the 5G rollout, will ensure equitable access to the highest-quality education to all learners. While NEP 2020 holds a lot of promise, much will hinge on its implementation this year.”
Mr. Sharan Nair, CBO, CoinSwitch Kuber (Crypto technology and blockchain company)
“Various macroeconomic developments in India and the world over the last year have led to a rise in crypto adoption in India. Today, leading crypto exchanges follow strict self-regulatory practices to ensure customer protection. We hope the upcoming Union Budget will bring in regulatory clarity and help standardize best practices, address misconceptions around this emerging asset class. We believe a regularized environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government’s vision.’’
Mr. Pratik Gauri, Co-founder & CEO, 5ire (Crypto technology and blockchain company)
“Crypto technology and blockchain are long-term phenomena that are not going away. And as the government regulations focus on protecting its constituency from the bad it does, it should also look towards utilizing its power of good for better governance and accountability. India has been a significant player in developing solutions for the rest of the world with modern technology; it is high time we become a model of utilizing it ourselves. The Union budget should include more resources to make our cities into more efficient, better governed, smart cities. We can create models in infinite ways, from more robust policing to e-voting, to more efficient ways to provide public services leveraging blockchain. The Union budget can aspire to not only reflect the value these services deliver day-to-day but to audit, be accountable, and find ways to provide a ground swell in adoption of blockchain technology in the meat and bones of the largest democracy in the world. Lastly, the Union Budget 2022 can be a starting point for adopting the UN 2030 Sustainability goals not only in words but in spirit to address a spectrum of work areas, chief among them environmental sustainability, or the intentional and careful use of natural capital such as water, air, solar, mineral resources, timber, and land.”
Mr. Lalit Mehta, Co-founder & CEO, Decimal Technologies (Fintech company)
“2021 was a transformative year for the fintech industry with significant technology adoption in financial services. While traditional lending still accounts as a major credit provider in India, digital lending has picked up pace with the ease of process, less paperwork and use of alternate data sources, making it a key enabler for the MSME sector. Fintech players have already shown willingness to work with the government to curb the menace of the illegal digital lending apps. Budget 2022 should introduce regulations that will help in greater credit access to MSMEs and curbing illegal activities while building trust in the digital lending process for the last mile. In line with the government’s goal of creating a digital economy, introducing credit schemes will incentivise the sector and help in providing timely credit to MSMEs that have struggled due to the lack of credit accessibility through traditional means of lending which has directly affected their business opportunity. We have also seen a rise in the number of start-ups who have turned unicorns in the last year that showcases the potential of the startup ecosystem in India. We expect the government to introduce regulatory changes that would create an easy line of access for start-ups & MSMEs to secure credit from online lending players. This will further help in boosting our economy.”
Mr. Dilip Modi, Founder, Spice Money (Fintech Company)
‘’The fintech industry has fared really well in the last two years with the pandemic playing a key role in the digital adoption of financial services across the country. With the government making strides through several initiatives including the recently set up Fintech Department and the introduction of Payment Investment Development Fund (PIDF), the sector is expecting to see more opportunities and initiatives being taken forward by the government that will help in the expansion of the market, influence customer behavior, and impact long term changes in the financial industry. As our country sets upon the goal of hitting the $5-trillion mark by 2025, I expect the digital economy to grow even further, with a majority of India’s population and small businesses adopting digital means to access payments and financial services. The rural sector will play a huge part in achieving this economic landmark, and the upcoming Union Budget 2022-23 should ensure there’s a special focus on bolstering rural development. Exemptions on procurement of point of sale terminals, GST rates for rural banking agents remitting funds among households, and subsidies to compensate for merchant discount rate (MDR) waiver are among some of the measures that will help in promoting digital awareness and initiatives across the country.”
Mr. V. Ranganathan, MD, Cerebra Integrated Technologies [E-waste management]
“The e-waste management industry requires a lot of capital investment, and for companies to do so, it would be beneficial if the government provides tax allowances, a tax holiday for ten years, along with Capex subsidies. This would go a long way in minimizing the financial burden borne by companies. Another primary focus should be to permit the import and export of e-waste for companies with the infrastructure and knowledge to do so. This, coupled with subsidized land costs, would go a long way. The government should also look into export incentives for companies exporting metals and refurbished electronic devices. Emphasizing and providing the necessary financial support is what the e-waste management industry needs at this time. A big boost for Electronic Manufacturing Services would be the free import of raw materials for manufacturing in the country, thereby further enabling the Make In India campaign. A positive policy is already in existence for government buying. In addition to this, tax and export subsidies for the Electronics Manufacturing Services sector will lower the Capex costs and catapult the sector.”
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