With Union budget coming closer day by day, the new crop digital payment players are expecting a support from the Narendra Modi’s Digital India-focused government. The new crop expects government to create incentives and digital infrastructure for successful financial inclusion
Budget 2016: With Union budget coming closer day by day, the new crop digital payment players are expecting a support from the Narendra Modi’s Digital India-focused government. The new crop expects government to create incentives and digital infrastructure for successful financial inclusion. “I hope that the budget continues on the path of fiscal consolidation. India is standing out as a beacon of growth and stability in an otherwise troubled global outlook. We expect the budget to invest significantly in strengthening the digital infrastructure of the country,” said Shankar Nath, Sr Vice President, Paytm.
He further said that, it is crucial that we develop a high bandwidth. “We would also like to see tax breaks on budget smart phones which support vernacular languages. Tier 2 and 3 cities and rural India thrive on smartphones, and have contributed significantly to productivity.The more the smartphone penetration, the higher will be the levels of entrepreneurship that we will see,” he said.
Nath also hopes that the KYC requirements will be simplified by the government. “eKYC will be the way forward in the future. We have moved up from a ranking of 134 to 130 among countries in ease of doing business. I hope the Govt will overall introduce measures that take us among the top 100 in the medium term. Starting a business, getting electricity, paying taxes, enforcing contracts, access to credit- we hope that some of these elements will be looked at during the budget,” he elaborated.
Shailaz Nag, Co-founder & COO of PayU India expects right incentives on both supply (Merchants) and demand (Customers) side in this budget session, for a push and the quick and wide adoption of electronic payments.
Adding to same, Ashutosh Pande, founder & Chief Innovation officer of PaySe said that the government said in one of its communications to the Payment Council of India that merchants with more than 50% of their transactions done digitally could get a tax rebate or a 1-2% reduction in value-added tax on all electronic transactions.
“Consumers could get some income tax rebates if they showed a certain portion of their net expenses was incurred digitally. A similar initiative was implemented in South Korea and helped transform a predominantly cash nation. Success of the initiative in Korea was driven by the willingness of the government to allow various payment instruments including open, semi-closed and closed pre-paid instruments to be within the gambit of digital payment. A similar policy will help the merchants and consumers overcome the initial inertia”, said Pande.
Reiterating the same, Pramod Saxena, Chairman & MD, Oxigen Services, feels that the FM should consider incentives for digital payments like direct subsidy credits similar to carbon credits since 95% of payments in the country are still in cash. “The FM should also focus more on according ‘infrastructure status’ to digital payments network in rural areas for financial inclusion and payments. We expect that FM should also consider allocation of budget for promotion of financial literacy in rural areas. PPI’s should be allowed to offer cash out services to expand the reach of financial inclusion,” he added.
While some players expects healthy tax regime for digital payment firm in India. Other such players are bullish about Startup India campaign by the PM Narendra Modi.
“We hope that this year’s budget will give us a clearer picture on taxation policies. With the launch of Make In India campaigns and the funds allotted by PM the startups have seen tremendous growth. We wish that this year also the budget will be focused on the growth and on investors as they are the main source of funds for the startups,” Ambika sharma, Founder, Instappy.
