Budget 2019 expectations: Fintech companies demand better digital infrastructure in rural areas

The growing use of the internet and increasing dependency on smartphones brought cheers for fintech companies. However, rural areas of India still demand better infrastructure to promote the digitalisation of transactions. Demonetisation and various other initiatives by government-promoted cashless transactions throughout India. Digital India has been successfully working to make Indian financial exchange transparent. But what all these fintech companies demand from the upcoming budget? 

Sangram Singh, CEO Freecharge shared his outlook on the upcoming budget with Zee Business Online, “2018 was a great year for the fintech industry in terms of new technologies and innovation. The continued focus from the Government for expanding digital penetration also saw a promising growth in the adoption of digital platforms across metro cities and tier-II markets.”

“In the near future, digital channels of engagement such as digital payments, money transfers, consumer lending will continue to grow. To strengthen this growth, we hope the budget can encourage the upgradation of digital infrastructure and digital literacy - especially in small towns and rural India, which will help drive financial inclusion through digitisation." Singh mentioned.

The rural population of India is still deprived of digital literacy and internet reach. Some of the recent initiatives such as UPI 2.0 and tokenisation provide a good opportunity for banks, e-wallets, and other players in the fintech sphere to promote digital adoption. Thefintech players should continue to focus on innovation, adding smart offerings to provide relevant and personalised customer experiences and strengthening the digital payments ecosystem in the country.

"We expect the 2019 Budget to further improve the digital infrastructure of the country with the allocation of more resources towards wi-fi hotspots in rural and semi-urban areas. The UDAN scheme can be given a boost, which will enable companies and start-ups to set up operations in smaller towns which will also indirectly lead to bridging the urban-rural divide said Abhishek Ray, Head - Legal and Compliance, ePayLater.

Concessions can be provided for the adoption of digital payments to reduce the dependency on cash transactions, which will lead to more transparency and higher tax collections. A sustained push towards a digital-first economy and digital literacy would be the best vehicle to increase and build awareness for digital transactions.

More steps need to be taken by the Government in relation to loans to MSMEs and retail borrowers. Fintech companies can be allowed to participate in the recent initiative by SIDBI to provide loans under an hour, and in the various measures under the Pradhan Mantri Mudra Yojna. The Government can also consider involving fintech lenders to regularise loans to farmers as part of the expected waiver package. 

In relation to the GST regime, steps can be taken to implement a shift towards a single slab taxation process, which will be very beneficial." Ray added.