Budget 2022 Expectations: ‘Expects reduction in GST, streamlining KYC norms, and expand financial inclusion’

As Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for the financial year 2022-23 on 1st February, the Micro, Small & Medium Enterprises (MSME) sector is upbeat that the forthcoming Budget is expected to provide much-needed impetus to the economy.

Sharing his expectations on the Union Budget 2022 for the MSME sector, Rajeev Yadav, MD & CEO, Fincare Small Finance Bank said: “MSMEs are a key contributor to the country’s GDP, employment, and social goals focusing mainly on the government’s Atmanirbhar Bharat. Thus, the success of MSMEs with an enabling framework, where banks can engage holistically, is imperative and is the key to self-reliance. This approach will provide a much-required boost and put our country on a multi-year growth trajectory.”  

Concern on taxation needs to be addressed within the given fiscal space. “We expect the Budget 2022 to provide the eagerly-awaited tax relief through changes in personal income tax for middle-income households to perk up the consumption. The government needs to push the disinvestment agenda to ensure that it has enough liquidity in its coffers to push consumption demand and restore confidence in the banking system to start lending,” he added.

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Yadav further added that Budget 2022 is expected to revolve around incentivizing the use of technology to make India future-ready. The Government should push for an e-identity, e-authentication, and e-payment framework in the form of Aadhaar, e-signature, and AEPS. This will go a long way in boosting financial inclusion and access to credit in the country. A renewed push for digital and support for the ecosystem players such as banks are desirable.

“In FY21, tax revenues have been buoyant, partly due to the nominal GDP growth of 23.9 per cent in the first half of the current fiscal, but also because of better compliance and the increasing formalization of the economy. The economy has rebounded well after the second Covid-19 wave and the government has been talking of a V-shaped recovery. Many of the high-frequency indicators show rapid growth. We are optimistic about the upcoming budget being growth-driven,” the MD & CEO of Fincare Small Finance Bank said.

“We hope the Budget 2022 to offer reforms on reduction in GST, streamlining KYC norms to expand financial inclusion, special SOPs for agriculture and allied industries, land reforms, micro-housing development, and rural town development,” he further added. Additionally, measures in respect to increasing income of rural households. PM-KISAN, for example, is yet to be executed fully. To trigger consumption there is a need to push for work-intensive industries, such as construction, housing, the building of roads, and irrigation frameworks, Yadav concluded.