Fintech Players Eye Tax Relief, MSME Credit Expansion, and Regulatory Reforms in Budget 2025
The Fintech sector is eagerly anticipating Budget 2025, set to be presented by Finance Minister Nirmala Sitharaman on February 1. Industry leaders expect key policy changes, including tax reforms, increased MSME credit access, and government-backed innovation support, to drive growth.
With the sector experiencing rapid expansion—fueled by the rise of digital lending and record-breaking UPI transactions—stakeholders are looking for measures that will enhance financial inclusion, ease regulatory burdens, and boost investment opportunities. The upcoming budget is expected to address these demands, ensuring that Fintech companies continue to play a crucial role in India’s economic transformation.
Support for Innovation and MSME Growth
Fintech industry stakeholders expect significant financial service innovation support as a top priority in their industry. Government financial backing of fintech innovation can help extend financial product services beyond traditional boundaries to underserved communities according to industry leaders. Fintech companies actively explore capital programs that focus on improving access to small business credit because traditional lenders often ignore them
The availability of capital reserves for MSMEs represents a fundamental opportunity that the government targets to enhance sector development. Small-scale lending resources allocated by the government offer vital financial support to start-ups and new businesses. This opportunity allows both fintech companies to succeed and enables MSMEs to enhance their operational scale so they can augment economic development.
Major stakeholders recognize that Non-Banking Financial Companies (NBFCs) require tax policy reforms that will reduce regulatory barriers. These new regulations will simplify the current rules to help fintech startups succeed in their setup. When the government reduces taxation for NBFCs it will create additional investments and increase financial inclusion throughout the nation.
Expansion of MSME Credit Scheme
The MSME credit scheme expansion represents a main strategic priority. Industry leaders predict that growing this program both in size and scope will unlock extraordinary growth prospects for numerous thousands of small and medium-sized companies throughout the country. The present size constraints of the MSME credit scheme block businesses from obtaining adequate funds so they cannot achieve quick expansion.
Fintech players advocate for growing the assets under this scheme because increased funding would give businesses immediate access to capital which enables better financial challenge resolution. They function as major job creators yet face substantial obstacles in seeking borrowing opportunities from conventional financial institutions. Government enhancements to MSME credit systems will boost startup innovation and entrepreneur growth thus promoting nationwide economic development.
Leading industry representatives propose that improved credit application procedures and adaptable lending terms would enable smaller businesses to understand the complex nature of financial institutions.
Tax Relief for Middle-Income Groups
Tax relief represents a fundamental expectation that stakeholders expect from the fintech sector. Stakeholders anticipate the forthcoming budget will establish a tax-free threshold at ₹15 lakh because it would grant financial respite to the middle-class sector. Such a policy change would provide advantages to individual people and raise their disposable cash which could then drive both domestic market expansion and economic development.
The higher tax brackets demand revisions according to financial technology industry players who specifically identify the 30% tax rate as a primary target. The existing tax framework creates heavy financial strain on wealthy individuals who find it hard to invest money or make purchases because of their soaring tax rates. An adjusted taxation system would bring fairness as well as broad-based inclusivity which benefits both personal and commercial stakeholders.
These proposed transformations aim to create better conditions that would encourage personal savings along with investments. By gaining more stores of value people will be drawn to financial products which boosts their involvement in the developing fintech market.
