Narayan ‘Naru’ Ramamoorthy, Chief Revenue Officer, Global PayEX: “AI can digitize B2B processes at scale – speed, costs, and productivity. Companies doing business in India have a tremendous opportunity to leverage AI across the B2B process flows right from purchase order (PO) to payments and reconciliation. Today a lot of these processes are manual – hence in-efficient both from a cost and time perspective, e-invoicing is a great first step by the Government of India. This will enable AI led digitization of invoice acceptance and reconciliation processes for buyers. The next step is to enable tracking payments. If payment data becomes available, AI can help track key metrics, such as Days Payments Outstanding (DPO) and Days Sales Outstanding (DSO) across receivables and payables and start providing actionable insights for companies and the economy as a whole. This will also help address the key issue for MSMEs– getting paid on time, besides enabling digital lending through cash flow, payment, and invoice data.”
Kumar Gaurav- CEO and Founder, Cashaa: “The Indian government has been pushing the digital India initiative which still has a long way to go. Among other major sectors, banking and finance is one that needs a complete digital transformation by all means. Considering the current health of the banking sector, we expect the government to welcome the model that the new-age businesses are introducing like blockchain-based banking and cryptocurrency. The convenience, safety, options, and growth will only increase if the economy begins to accept the new solutions. Now that SC has removed the ban, we expect the government to consider allowing self-regulatory system for cryptocurrency industry so that users gain more clarity and we take another step towards strengthening the larger aim of digital India,”
Shachindra Nath, Executive Chairman & Managing Director, U GRO Capital: “The MSME sector is vital for India’s economy, responsible for employing over 120 million people. Unfortunately, the sector was severely hit by the pandemic. Aware of its importance, the government has already undertaken exceptional work with TLTRO, TLTRO 2.0, Partial Credit Guarantee Schemes, and the Emergency Credit Line Guarantee Scheme (ECLGS) in 2020. Rescuing the sector from the pandemic should be the top priority for the government in the upcoming Budget 2021.
The crucial challenge would be to address lenders’ risk appetite in the face of loan default fears. Lending can be encouraged by bringing the existing Credit Guarantee Scheme in line with the ECLGS.
The government must also ensure that NBFCs can access liquidity. This, in turn, would give them the tools to support MSMEs. The 2021 budget needs to set up a dedicated institutional framework for the same (existing or new), which would provide credit enhancements to NBFCs in different formats. A long-term financing institution for NBFCs would be the right revival strategy to tide through a liquidity crisis.
There are several schemes and systems in place to democratize credit in India, such as OCEN, account aggregators, and co-lending initiatives. The Budget should put into place a governance and oversight framework to protect customer interests.
Provisions for the right framework and liquidity will empower them to digitize and make this the year of recovery for MSMEs.”
Lalit Mehta, Co-founder & CEO, Decimal Technologies: “The lockdown brought with it an economic downturn for enterprises of all sizes, which urged the government to offer Loan Moratorium to borrowers amidst liquidity crunch. While this helped kick-start the economy, the government must introduce a long-term stimulus in its upcoming budget to ensure cash-flow for the BFSI industry. In the post-COVID19 economy, credit is going to be the enabler of businesses, we expect the government to introduce credit schemes that will provide a fillip to the sector. Schemes that would ensure continuous availability of credit as and when needed will provide a great boost, especially to the lending industry. During the lockdown, borrowing, for both commercial and personal purposes, increased, facilitated by FinTech players. We expect the government to announce necessary regulatory changes that would create an easy line of access for FinTech players to secure credit from conservative banks and further disburse loans to borrowers.
Covid-19 catapulted India into a digital economy and the FinTech start-up ecosystem witnessed some high-value investments in 2020. While the PM has already announced a Rs 1,000 cr Startup India seed fund, the FinTech start-ups can further benefit from the launch of a fund focused on equity capital requirements of start-ups in the lending space. This will help give steam to India’s $ 5-trillion GDP target by 2024 and fill the $380-billion MSME credit gap.”
Ashraf Rizvi, Founder & CEO of Digital Swiss Gold and Gilded: “India’s working-age population (15-59 years old) is a cohort estimated to comprise roughly two-thirds of India’s total population, which the United Nations estimates at 1.38 billion in 2020. As the economy opens up, we expect the government to roll out more initiatives and investment that create jobs which will will to more spending and consumption, and also more saving and investing as personal finances improve, Digital Gold being one such safe, flexible and scalable investment option suited to all investors.
We, at Digital Swiss Gold, are among the many excitedly anticipating Indian Finance Minister Sitharaman’s Union Budget 2021-22. Gold continues to be one of the biggest imports in India and is an easy source of increased revenues for the government. We will be eager to see if the gold business draws additional import duties as has been the case in prior budgets over the past decade. We are confident that this budget will spur growth across industries while keeping the needs of Indians at its core. With our cutting-edge financial technology and unparalleled service, Digital Swiss Gold hopes to play a role in helping Indians realize their financial hopes and dreams in 2021 and beyond.”
Dilip Modi, Founder of Spice Money: While encouraging initiatives such as PIDF by RBI have already been announced, in the upcoming Union Budget, we expect the government to announce a subsidy on MDR and POS devices. Waivers on MDR and POS are pertinent to encourage the expansion of these services via the BC network. Accessibility of financial services is a major gap in financial inclusion and POS terminals would be more sustainable than ATM infrastructure in semi-urban and rural areas.
Another key aspect, like many have echoed, would be taxes. The earnings of the underbanked population are hit with taxes levied on basic money transfers. The government should consider providing some GST relief on smaller transactions conducted on the BC network. A special provision on GST and TDS for the BC model will help create visibility for this business. Further, tax benefits to the rural end-customer on digital purchases will also help boost adoption of digital financial services in the low-income groups.
The government showed support for the rural areas by deploying DBT schemes with the BC networks backing them by providing withdrawal services. The government should further this support by building BC networks as it will spell growth for the vision of Digital India beyond simple internet connectivity. It will allow more financial products and services to reach the remotest parts of India and accelerate the bridging of the gap in the access to banking services in India.”
Mr. Rishab Mehta, Founder & CEO, GrayQuest: “The significance of this year’s Union Budget can be inferred from the fact that this is the first budget post pandemic. While the National Education Policy has set a great opportunity for the Indian education sector to grow and flourish, the Covid-19 induced pandemic has had serious implications both on education and education financing. Therefore, government intervention is the need of the hour to make education more affordable and accessible.
The successful integration of technology with education, witnessed in 2020, is here to stay and therefore steps to improve and enhance the technological infrastructure is one of our key expectations from the government. This will also be a crucial step in bridging the gap between rural and urban areas thus providing equal opportunities to all.
With growing aspirations among parents and students, education fees nowadays form a significant proportion of any household expenditure. The current pandemic has caused a significant liquidity crisis among parents thereby highlighting the need for education financing options more than ever. This requires the government to take measures to reduce the interest rates on education loans so that students can pursue the education of their choice without being held down by financial burdens. Another key step in this regard would be to increase the percentage of GDP allocated towards the education sector which will incentivise infrastructure creation and promote quality education.
As a representative of India’s booming start up industry, which has withered several storms over the past 12 months, we would like to urge the government to provide tax reliefs by easing the present Angel Tax norms and decreasing the GST rates applicable on us. These measures would prove to be substantial in ensuring prosperity in a post-pandemic world.”
Mr. Vinay Bagri, CEO & Co-founder, Niyo: “The expectations from the upcoming Budget 2021 have soared ever since the FM has indicated this will be unlike any other in the “past 100 years”, especially in the backdrop of the unprecedented economic downturn and disruption of business activities globally due to COVID-19 and the subsequent lockdown and travel ban.
There is an expectation of a well-defined and faster license approval process for different licenses such as NBFC, prepaid wallet (PPI), UPI third party processor etc., as regulatory clearances are imperative for fintech lenders and start-ups as a whole. With the renewed focus and enthusiasm around bitcoin and other crypto currencies, a clear regulatory and legal framework around usage, storage and investments in crypto currencies is also the need of the hour.
The 5% TCS (tax collected at source) for outward remittances has resulted in fewer investors remitting money due to the capital outlay that they need to do early in the year, as well as foreign currency transactions during travel or educational spends by students. We expect a rationalization of this tax to a smaller value (say 2%), that can be offset through a marginal increase in capital gains tax on Short Term CG on overseas investments.
The Budget should make necessary provisions and enabling framework towards fulfilling the Digital India mission to improve digital acceptance at grass roots level, with greater focus on newer technologies like AI, blockchain and robotic process automation to drive the agenda.
Overall, we expect the government to push forward new reforms with renewed vigour and urgency under the umbrella of “Digital India 2.0”, as well as strengthen the measures to achieve financial inclusion. We are hoping for tax relaxations for fintech companies and payments players which can pave the way for the fintech industry to increase investments in product innovation and customer service.”
Anand Kumar Bajaj, Founder, MD & CEO, PayNearby: “PayNearby’s retail network has worked tirelessly to ensure seamless access to financial services, especially during the peak lockdown months last year. 93% of our business correspondent network has been committed to working in tier 2 and tier 3 towns, serving as the sole point of cash disbursal in locations with limited financial infrastructure. However, the commission rates for BC services are very low to make it a profitable business. Additionally, BCs, by default, come under the 27% GST and 5% TDS on cash withdrawal even after the tax act having enabling provisions. This makes it difficult for them to stay afloat.
We hope that this Budget takes into consideration the tough working condition of the BC network and make a few regulatory changes to ensure the viability of a community that has been vital to the cause of financial inclusion in the country. To continue sustaining the competitive advantage in Digital proliferation in India, restoring normal MDR on transactions will incentivise the digital ecosystem and facilitate a smoother growth trajectory towards innovation.
Mandar Agashe, Founder, MD and Vice Chairman, Sarvatra Technologies: “With the world’s largest immunisation drive already underway, economic recovery will be the major focus of the government. Despite the wreck created, the pandemic has offered a huge impetus to digital penetration all throughout the country, which has accelerated in the unlock phase. It is therefore critical the budget draws out bold policy interventions to strengthen digital infrastructure which will eventually help in digitising the overall economy.
The PoS terminal is financially, infrastructurally, and operationally far more affordable and far less demanding than an ATM. However with just 4 million POS machines active in the country, the budget should consider making devices such as the PoS terminal / mini ATMs’ the most viable acquiring infrastructure for banks and fintech companies by offering incentive such as a tax subsidy. Additionally, tax breaks in GST for merchants providing digital payments and tax benefits for companies helping build digital infrastructure for friction-free digital on boarding, too will catalyse the financial inclusion movement envisioned by the government.
The government should also consider a dedicated fund to strengthen digital infrastructure of co-operative banks across the county which will offer a big boost to a more inclusive financial system. Budgetary concessions such as a GST waiver for digital transactions along with incentivization, especially in semi-urban and rural India will further augment cashless payments.
UPI has been a breakthrough, home-grown technology and it is important we replicate its success through newer and more innovative technologies. Fintechs and technology startups should be encouraged to invest more in R&D to introduce newer products and diversify into newer geographies. The upcoming budget should therefore consider offering tax benefits such as private investments being exempted.
Besides, considering the amount of data being created and stored across industries growing at unprecedented rates, enhancing the security infrastructure to protect and manage data seamlessly should be another focus area. In the post-COVID world, digital infrastructure will be a game changer for companies and countries and therefore it is important we take timely measures to ride this wave.”
Mr. Rahul Pagidipati, CEO at ZebPay: “We’re optimistic that the government now recognizes the huge potential of blockchain technology and of Bitcoin as a reserve asset for companies, individuals, and even central banks in the near future. Crypto assets, properly regulated, can bring tremendous economic benefit. The government’s twin goals of promoting prosperity and protecting people from fraud and harm are our goals, too. That’s why we have world-class security, KYC, and AML policies. We hope 2021 will bring healthy regulations for crypto investors, so they can know how to pay taxes correctly and access all the potential of this revolutionary new asset class.”
Bitex Founder and CEO Monark Modi: “Just like any other financial markets that have matured in India owing to regulations, cryptocurrency investors have similar expectations from the government from this budget that will help this new financial market move towards certainty.
India has seen phenomenal growth in cryptocurrency trading volumes as well as the size of the community participating in this alternate investment class. But due to lack of clarity and in the absence of regulation, banks are still hesitant in providing services to exchanges and have been blocking transactions related to cryptocurrencies, which is impacting investors.
Also, due to growing investment in cryptocurrency, there are many questions being raised on how such transactions and trades are being reported within the country. The crypto industry is volatile and a mark to market approach is usually used for capital gains. Taxation on realization helps in defining a lock-in effect and this interests the investors more to retain their assets when the economy benefits from a difference in investment.
Therefore, all stakeholders of the ecosystem, including retail, institutional investors, cryptocurrency exchanges and financial institutions are looking forward for answers to some of these questions in the upcoming budget. While exchanges like Bitex do provide support to their customers with a detailed report on each individual transaction to facilitate the reporting requirement; cryptocurrency stakeholders across the ecosystem will look for clarity on how individuals and exchanges can report crypto trades on their filing.
Another aspect that requires government’s approval is crypto mining, since presently, exchanges have to depend on the import of cryptocurrency by remitting funds. It is quintessential that the government considers practices in the upcoming budget that protect the interest of Indian cryptocurrency exchanges and help funds remain within the country.”
Sudarshan Lodha, Co-founder, Strata: “Considering the real estate sector is the second-largest employer in the country and directly or indirectly, accounts for approx.10 percent of the GDP, it deserves serious attention in the upcoming budget. Within realty the commercial real-estate has been a watch-out sector for investors both overseas and back home owing to its strong fundamentals and resilience. The government should therefore consider measures to further encourage more NRI investments in the country. For instance considering a reduction in the income earned from long-term capital gains would be helpful.
Owing to fractional platforms, affordable commercial realty is now a reality in India and therefore for retail investors intending to invest in commercial assets, the government should consider a higher exemption limit. Alternatively since both the interest income as well as dividend earned by investors are taxable as per their slab rates, the government should consider a waiver of tax on dividend. These measures will help boost retail sale which in turn can offer a huge impetus to trade and economic activities. Considering personal loan is expensive, the government should also bring in a policy whereby retail investors can avail a loan seamlessly from banks at a reasonable interest rate for investment in commercial assets through fractional route.
Besides it is important to address investor sentiments while also addressing the challenges being faced by developers. For instance considering a stress fund can help generate cash flow for developers thereby helping build the supply side of the industry. Alternatively encouraging banks and NBFCs’ to lend to commercial real-estate projects or take over and restructure stalled projects will also go a long way in kick-starting the economy. Similarly properties that are not sold but developed for leasing, GST at 18 percent should be reconsidered as it is a huge liability for the developers as it pushes the cost of construction and poses further challenges in the wake of a liquidity crunch.
Additionally, the Government should also consider incentivising alternative asset classes such as warehousing, SEZs’, data canters and co-working spaces to build momentum on both the demand and supply side.”
Sumit Gupta, CEO and Co-founder, CoinDCX: “Cryptocurrency has been emerging as one of the fastest-growing digital assets globally and India has seen tremendous traction building up following the supreme court lifting the banking ban. With growing awareness, there is growing consensus that cryptocurrencies will certainly play a crucial role in the way we deal with money and therefore it can positively contribute to the nation’s GDP. . At the moment, one cannot ignore the industry’s growth and the interest it has generated from the investors. In the past few years, the industry has generated thousands of direct employment in the country.
As more and more companies related to cryptocurrency set up base in India, the industry expects recognition. A recognition can accelerate its contribution to the GDP and employment by multifold. It will bring a trust factor not only for the retail investors but also for the institutional players. While there may be a delay in bringing in bringing in smart and sensible regulations for the sector recognising crypto as a tradable commodity will be a significant relief. Further, to tackle AML & other funding concerns, the government should consider a formal direction to exchanges to follow the virtual assets guidelines of FATF.
Additionally, considering the ambiguity among investors pertaining to the tax applicability for the income earned from crypto trading, we expect the upcoming budget to bring in amendments in the income tax and GST laws thereby offering more clarity to investors, traders, and crypto organizations.”
Sanjay Bhatia, Co-Founder, Freightwalla: In the year 2020, the pandemic brought global industries to their knees. The USD 160 billion Indian logistics industry was also not spared as it came to a standstill during the pandemic lockdown. The industry faced many challenges in terms of clearance, processing, and movement of shipments. Few technology-driven businesses managed to overcome some of the EXIM industry’s challenges during the pandemic. The stumbling-blocks faced by the exporters and importers could have been avoided if the entire ecosystem was working digitally. There is a pressing need for a complete digital transformation of the industry to handle international shipments efficiently. Consider the case of customs that have taken part in their processes online. There are still many things that need to be re-moulded with advanced technologies. We hope the union budget to announce suitable investments towards the digitization of the shipping and logistics sector. A leap towards the initiative will bring in transparency, reduction in cost, and better cost management. Digitization should also include implementing smart single-window clearance for smooth processing of shipments or approvals. Such initiatives will prepare us to tackle any untoward incidences in the future, like the current pandemic. Investments in Artificial Intelligence, Machine Learning, and BlockChain technologies can facilitate complete transformation. It can boost productivity in every sector, and style pretty effective and successful workflow
Further, the Union Cabinet recently approved a multimodal logistics hub proposal and set up industrial corridor nodes at Krishnapatnam and Tumakuru. We hope to see implementations of these at the earliest. It will facilitate the transportation of goods, thereby cutting travel time and making the system more efficient.
There is also an expectation that the proposed National Logistics Policy may get announced during the announcement of union budget 2021. We are optimistic that that will improve productivity and reduce logistics costs.
