The fiscal policies of the 'Amrit Kaal' budget fueled fintech expansion, driving digital transactions. Looking ahead to 2024, industry leaders advocate for inclusive policies for broader digital adoption
Last year's budget for 'Amrit Kaal' featured a robust set of policies aimed at bolstering the Fintech sector. From advocating for green technologies to focusing on digital public infrastructure (DPI), the government demonstrated a clear commitment to advancing digitization.
Within the fintech segment, digital transactions continued to garner a broader level of acceptance as FM Nirmala Sitharaman reiterated the commitment to extending fiscal support for digital public infrastructure.
According to government data, the total volume of digital payment transactions surged from 2,071 crores in the fiscal year 2017-18 to 13,462 crore in the fiscal year 2022-23, a compounded annual growth rate (CAGR) of 45 per cent. As of December 11, 2023, in the ongoing fiscal year 2023-24, digital payment transactions have already amounted to 11,660 crore.
As all eyes are set on February 1, the fintech industry is expecting a push for a wider adoption of digital payments, coupled with an emphasis on inclusivity in technology. "In the Union budget 2024-25, the government should push for initiatives that will focus on boosting adoption of digital payments in tier 2 and beyond regions. Policies should incentivise the creation of a fertile environment for fintech startups to innovate and build products and solutions that will be more inclusive, adaptable for both consumers and businesses," said Akash Sinha, CEO & Co-Founder, Cashfree Payments.
However, the growing utilization of digitalization has led to a rise in cybersecurity risks. According to a report by RBI, there were 6,659 reported digital frauds (card/internet) amounting to Rs 276 crore in the fiscal year 2022-23. This represents an increase from the 3,596 fraudulent transactions worth Rs 155 crore reported in the preceding year.
Keeping in view the same, the Reserve Bank of India (RBI), last month, had proposed the implementation of a cloud facility for banks and financial institutions. Governor Shaktikanta Das highlighted that such a measure would improve data security, privacy, scalability, and business continuity.
Industry executives believe that customers expect digital payments to be fast, secure, and seamless, at the current stage. Considering this, financial institutions and companies will need to leverage new-age technologies to meet these expectations.
"Cloud technology will play a big role here. RBI's proposal to establish a cloud facility for the financial sector was a major move in this direction. I hope the FM furthers this in the Budget, and we would like to see dedicated policies on cloud technology for payment," said V. Balasubramanian, CEO, FSS Cash Tech.
While it is worth noting that this year's budget will initially be an interim one owing to the upcoming elections, industry leaders remain hopeful about broader developments in digital infrastructure policies.