My Budget Wishlist Includes Higher Tax Deductions & Presenceless Account Opening

The Union Budget will shortly be presented by the Finance Minister Nirmala Sitharaman. The common man as well as the industry have high expectations from the budget announcements, given that we’re coming out of an economic slowdown.

The common man would expect tax cuts to ensure more income in his hand, which would boost sentiment and spending. The fintech industry also expects announcements to make the availability of credit easier for consumers.

Here’s my wish list for the budget.

Increase The Slabs, Especially The 30% Slab

Cut in personal income tax rates is one of the most popular demands by salaried. The government could raise the basic exemption limit from Rs 2.5 lakh to Rs. 5 lakh. Also, what it must strongly consider doing is raising the income level on which the peak tax rate of 30% is applied, from Rs. 10 lakh to Rs. 20 lakh. The 30% slab has been stuck at Rs. 10 lakh since 2012-13, and it’s time it was revised.

Announcements For NBFCs

NBFCs had a rough time in 2019. Further announcements need to be made to ensure their revival and help them scale up lending to improve the flow of credit in the economy. So their funding sources would have to be diversified and a refinance window can be created with SIDBI, Nabard or NHB at the helm.

More Credit For Low Income Borrowers

There is great demand for credit from sub-prime borrowers. Therefore, the Priority Sector Lending (PSL) benefit for unsecured loans to borrowers with income less than Rs. 3 lakh per annum can drive greater financial inclusion.

Greater Fintech Collaboration

The finance minister should announce a policy decision to increase collaboration between public sector banks and fintech companies. This would help the industry to implement new-age technological solutions to improve financial inclusion through public-private participation.

Make Presenceless Banking A Reality

Thanks to the RBI’s latest push on video KYC methods, India’s all set to take a giant leap into the digital age where the common man can open a bank account paperlessly and without having a face-to-face meeting with the bank. The use of digital access to credit via paperless and presence-less onboarding as a policy objective will drive financial inclusion.

A version of this article appeared in Yahoo! Finance

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