Fintech firms want Modi 2.0 Government to implement RBI’s Vision 2021 - What it is and its benefits

Ever since the Modi 2.0 government has taken over, the Fintech firms have been demanding from the Finance Minister Nirmala Sitharaman to implement the Reserve Bank of India's (RBI's) Vision 2021 as and when the parliamentary session begins. They said that if the RBI's Vision 2021 is implemented properly, taxes would shift more towards consumption rather than on earnings. Even abandoning income tax for people and increasing it on luxury consumption could have a huge effect in giving a fillip to the economy. 

Elaborating upon the benefits of RBI's Vision 2021 if implemented Ravi Vishvanathan, Director at PayMate said, "Tweaking the Angel Tax has not helped in resolving the matter. The tax just needs to go, and the entire section needs to be deleted altogether and RBI’s Vision 2021 needs to be backed by bold measures in the Budget 2019." Counting the benefits of RBI's Vision 2021 if implemented Ravi Vishvanathan of PayMate said, "It will reduced tax rate for businesses spending less in cash than the threshold level, stamp duty on contracts and agreements will go down, Start-up entrepreneurs in fintech sector arrange for finance from family and friends and the restrictions on loan from friends and relations that will get relaxed to a great extent and NEFT/RTGS would become a 24/7 facility (with a half hour window for settlement if required)." He said that fintechs operate on a low margin and Tax Deduction on Gross Revenue results in negative cash flow for these entities. Either Fintechs should be exempted from TDS or alternatively, Zero/Lower Tax Deduction Certificates should be issued by default based on self-declaration.

Standing in sync with the PayMate views Mayank Bidawatka, Co-founder at Vokal said, "An economy grows leaps and bounds when many new people get additional spending power. We’ve seen that happen in China and the positive effects of disposable income increasing. The amount collected from income tax is very low in India. A very small percentage of the population pays this tax and most non-salaried people find smart ways to avoid paying this tax. Of the salaried, majority of the people paying tax are in the lower rung. As a result, the have-nots get axed. Instead, if we could increase the lowest tax bracket from 2.5 lakhs to 6 lakhs, that could help increase disposable income for the majority." He said that taxes could shift more towards consumption rather than on earnings. Even abandoning income tax for people and increasing it on luxury consumption could have a huge effect in giving a fillip to the economy.