Nirmala Sitharaman, the honourable finance minister of India, presented the Union Budget 2024-25, and the Indian fintech sector expected further evolution from this budget. Would you like to check whether the Union Budget successfully met this expectation of the fintech industry?

Look no further; just go through the following sections:

Highlights of Union Budget

The main focus areas of this year’s budget were:

1. Agriculture
2. Employment and skilling
3. Human resource development & social justice

It also caters to other areas, such as urban development, infrastructure, energy security, manufacturing/services, innovation, R&D, and reforms.

Position of Indian Fintech Industry So Far…

As reported, the Indian fintech market is a billion-dollar market, and by the close of 2024, this industry is expected to reach $110 billion. Looking at the 5-year growth prediction, it is expecting a 31% CAGR, and the number will be around $420 billion. Next year itself (2025 closure), it will be $150 billion. 

Thanks to UPI, cards, and all other tools that enabled digital transactions right at the fingertips of the users in past years. Not just that, their innovative zeal is ongoing so that they can bring forth some more useful solutions for the users.

As per the Fintech Strategy For Financial Inclusion 2019-2024, banks and non-banks are successful enough in bridging the gaps between financial services and the rural population of India. The government of India and banks have introduced supportive schemes to address the issue. At the same time, the fintech industry has helped them access banking services with convenience. Altogether, digital transactions are widely used in India right now.

Union Budget 2024-25: A Hope for India's Fintech Industry

Even though there is no policy or policy change for fintech industry in this Union Budget 2024-25; yet, there are hints of further growth in this sector.

Encouragement to MSMEs – Growth Opportunity for Fintechs

Union Budget 2024-25 focuses on bringing more employment opportunities in the form of jobs as well as business. And online payment has become an integral part of today's business. From small grocery stores to food carts to fruit vendors, everyone collects payment online today. So, welcoming MSMEs is actually an encouraging factor for the fintech companies. Also, loan limits, credits for MSMEs, turnover threshold – all these got more flexibility in this budget. So, the fintech industry will have more scope to flourish.

More employment = More Investment – More Use of Fintech Products

Today, fintech is not limited to payment gateway, payment aggregator, and only payment-related products. Rather, it includes insurance, lending, personal finance, investment, as well.

From this perspective, the fintech industry can remain faithful, too, because the revised tax slabs will increase the savings of employed individuals. It will elevate their investment mindset; hence, the fintech industry can expand.

Further Employment Opportunities – More Transactions

The Union Budget emphasizes employment opportunities for a job-ready workforce. Thus, there will be more transactions to set up new ventures or expand existing ones to employ these skilled laborers, where fintech solutions will be much needed.

Innovation on the Go – Making Financial Services Unavoidable

The explicit mention of infrastructure and industrial development in the Union Budget makes it evident that fintech support in terms of loans and fintech products/services will be essential. In short, the fintech industry's growth will come along with the development of other related sectors.

Union Budget 2024-25: A Hope For Indian Fintech Industry

It is not wrong to claim that the Union Budget indirectly fuels the Indian fintech industry by encouraging more MSMEs to emerge. We can also assume that RBI will introduce more schemes to continue the digital India initiative like previous years. Indeed, a bright future is waiting ahead for the fintech industry. So, more collaborations between public sector banks and fintech companies and more openness to digital banking solutions are on the way—let's get ready to welcome them.