Finance Minister Arun Jaitley on Wednesday tabled the Union Budget 2017-18 ahead of major state elections. While there are mixed reactions by political parties across the nation, mobile wallet giants Paytm and MobiKwik are considering the Budget as a “progressive” one for the digital-first economy.
“Big digital push is the thrust of the Budget and is a very welcome and the right move for the future growth of the economy. I commend this progressive budget that invests heavily in technology and digitisation,” said Bipin Preet Singh, founder and CEO of MobiKwik.
Singh believes that digital payments will be the “new normal” in 2017. This would bring new taxpayers and bring better transparency in incomes, he said.
The Finance Minister emphasised on the benefits of the digital-focused economy for the Indian citizens. “Promotion of a digital economy is an integral part of government’s strategy to clean the system and weed out corruption and black money,” Jaitley said in his Budget speech.
In the last financial year, Prime Minister Narendra Modi had brought demonetisation to curb black money. He replaced the previous highest denomination currency notes with the new Rs. 500 and Rs. 2,000 notes. That move encouraged a large number of people in the country to shift to digital payments. Ultimately, Noida-based Paytm and Gurgaon-based MobiKwik emerged as the major beneficiaries of the digital push.
Singh-led MobiKwik witnessed 200 percent growth following the currency ban announcement in last November. Paytm wallet, on the other hand, received 250 percent growth in transactions.
Vijay Shekhar Sharma, founder and CEO of Paytm, considers the new Budget as a “digital economy budget” by the Central government.
“The government has pushed the digital theme in every area of the budget,” Sharma said. “Every person from small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loads based on a digital footprint will create a larger merchant ecosystem for digital payments.”
Jaitley during his speech revealed the launch Aadhar Pay, a merchant version of Aadhar Enabled Payment System. This new technology is aimed to help the government surpass 2,500 crore digital transactions for 2017-18.
“Aadhar Pay will be launched shortly. This will be specifically beneficial for those who do not have debit cards, mobile wallets and mobile phones,” the Minister announced.
The government is also in plans to bring 20 lakh Aadhar-based PoS (point-of-sale) terminals by September 2017.
A boost for startup ecosystem
Singh of MobiKwik states that alongside digital payments, the latest Budget is designed to promote the existing startup ecosystem in the country.
“Reduction in the corporate tax for medium and small scale enterprises (MSMEs) to 25 percent will also go a long way in attracting more investment in the country. It will surely give the domestic sector a massive push and indirectly help the country in restoring its healthy GDP growth forecast,” Singh said.