We welcome the Union Budget. Although it does not contain direct policy mandates for the Fintech segment, there are several positives that we would like to highlight:
- Income Tax Relief and Increased Discretionary Income: The relief in income tax is expected to boost consumer spending, which in turn will drive more digital transactions.
- 5G Market Growth and Smartphone Penetration: In a rapidly growing 5G market, improved smartphone penetration is essential for broadening payments. The Budget’s focus on reducing the cost of imported components and finished products, potentially leading to lower retail prices for mobile phones and accessories, will benefit the fintech sector by expanding the base of smartphone users and enhancing access to digital payment platforms.
- Reduction in E-commerce TDS: The reduction in e-commerce TDS from 1% to 0.1% will encourage more merchants to embrace digital payments. This policy change will lower the compliance burden on merchants, making it easier for them to participate in the digital economy, thus driving further adoption of digital payment systems.
- E-commerce Hubs and Public-Private Partnerships: The establishment of dedicated e-commerce hubs through public-private partnerships presents an exciting opportunity for innovation in cross-border B2B trade payments, potentially using UPI rails.
- Expansion of IPPB Branches in the Northeast: The opening of 100 IPPB branches in the Northeast also opens opportunities for other payment companies and fintechs to expand their services to new regions, tapping into a market with significant growth potential.
– Deepak Chand Thakur, Co-founder and CEO of NPST Ltd