MUMBAI: The Indian middle class, which is expected to gain on the back of the tax-relief bonanza announced in the budget, will help generate demand among consumers, internet entrepreneurs told ET.
Interim finance minister Piyush Goyal said in his budget speech that full tax rebate will be offered to individual taxpayers earning up to Rs 5 lakh annually. Digital stock-broking company Zerodha’s chief executive Nithin Kamath said with the middle-income segment saving more on taxes, it is also an opportunity to encourage them to invest. “The finance minister has put more money in the hands of the consumers which is always a good sign for companies like ours. This can also help them invest more and tech platforms like ours are ideal to cater to their requirements,” said Kamath. While Goyal’s budget speech did not address many of the other hot-button issues like angel tax, startup entrepreneurs said the increased digitisation momentum of the government could help them grow their business fast and take services digitally to rural areas. Further, the guaranteed income scheme for the rural poor and pension protection for the workers in the unorganised sectors can help companies working in the financial-inclusion business. “The government is talking about direct cash transfer of Rs 6,000 per annum to small farmers. To be able to access the cash from their bank accounts they will need micro ATMs and Aadhaar-enabled PoS terminals, which is where we come in,” said Anand Kumar Bajaj, founder, PayNearby, which has deployed more than 1.5 lakh AePS PoS terminals.
Highlighting the government’s attempts to digitise villages, payment companies have pointed out that it could mean that digital payment solutions could be deployed in villages as well.
“The government’s target to reach 1 lakh digital villages will help in increasing the penetration levels of channels such as PoS, QR code and UPI, and augur well for acquirers like us,” said Ravi B Goyal, managing director, AGS Transact Technologies, which deploys PoS terminals for banks.
Further, on the DBT scheme, payment industry executives pointed out that instead of a full-fledged bank account, a prepaid account could be ideal since the benefit amount is low. “A prepaid account or a wallet solution could be ideal to transfer the minimum income scheme that the government is talking about,” said Naveen Surya, chairman, FintechConvergence Council, an industry body of fintech companies. “We need more clarity on this matter as to how the transaction can be made.” Surya added that while the overall digitisation agenda of the government looks interesting, the lack of specific rebates and incentives for entities in this space was a big disappointment. Bajaj from PayNearby also said that the business correspondent industry, which helps drive financial inclusiondigitally, was not mentioned while customer service centres were spoken about. The business correspondent industry is suffering from high GST rates, which is a stress for these companies since operation margins are anyway low in this business, he said. Stressing on the overall digitisation agenda of the government, Goyal pointed out by 2030 the country’s foundation will be built on the digitisation initiatives it has undertaken over the past few years, for which tech startups will be playing a critical role.