What Fintech & Heath-Tech Wants?: Budget Expectations

Now the entire industry is seeking some relief and some motivation from the upcoming annual financial policy document - The Budget 2019. However this year, it will be an interim budget hence many of us are expecting some glossy attractions. For Prime Minister Narendra Modi who is preparing for the action-oriented Lok Sabha general elections and in order to compete with the opposition parties in the Elections 2019, a well defined and well-thought budget is needed. Finance Minister Arun Jaitley on February 01 will present the budget and as an exercise many industry bodies, forums are coming forward with their set of budget expectations. The ruling party once elected for India, will introduce an overall Budget sometime later in the year.

While many sectors are eyeing some good news for themselves, which is why even fintech industries look forward to some major reforms in their segment especially in regards to tax relief.

Delhi-NCR based healthcare fintech startup, LetsMD, has set the demand before the ensuing Union Budget 2019-20 on behalf of the heath care industry. Nivesh Khandelwal, Founder and CEO LetsMD said, “India’s healthcare inflation is about 15-17%, so, every year the cost escalates by 15-17%. Second, Insurance penetration in India is negligible. 80% of India’s healthcare expenditure is out of pocket. And, 50% of that out of pocket expenditure today, is financed through loans. So a lot of work has to go to on the preventive healthcare side, to make healthcare affordable in the long run in India.”

Speaking on the budget expectations, Khandelwal, said, “Health sector demands incentives for setting up hospitals in smaller towns and cities and that is the primary demand, the industry is looking up to in this year’s budget. There should be easy loans available for creating viable healthcare infrastructure in smaller towns and cities. Also, the priority sector status must be accorded to the healthcare industry.”

Further, Khandelwal, appreciated the Ayushman Bharat drive of the government and said, “There will be a demand-supply gap in healthcare financing, the need of the time is to rationalize rates of Ayushman Bharat and other government insurance schemes so they become viable for top tier hospitals.” The focus has to be on ensuring the last mile availability of financing at tertiary care facilities. LetsMD aspires to create a viable option for financing the healthcare needs for people of all strata, he added.

He also demanded, “There is dire need to incentivize and regulate setting up of medical colleges to ensure quality manpower is created. Without adequate medical colleges, quality doctors and support staff,  India’s health care mission will not succeed.

Khandelwal also requested government to consider credit guarantee, since payments take time to come to hospital under govt. insurance schemes, government should incentivize /give credit guarantee to lenders who are willing to fund the receivables.

 “Government should also come up with medical innovation fund separately to boost health tech start ups,” he demanded. “We are looking forward to a positive turn out from the Union Budget 2019 for start-ups and emerging entrepreneurs, especially in the health tech domain”, said Khandelwal.

On another front of pure fintech, while representing a credit platform, Ranjit Punja, CEO and Co-Founder CreditMantri commented, "It is undeniable that digitalisation has made a powerful impact on financial transactions. It is expected that the Government would continue to push digitization of financial systems whilst the consumer will, more and more, be encouraged to shift to digital platforms for financial transactions."

Punja further added, "Good and Services Tax (GST) is a landmark reform that has delivered several major economic benefits."

Thereby, Punja says, "It is expected that a certain tax relief would be given to companies who accept digital payments. This will drive significant investments in the fintech sector, providing innovative solutions to merchants and consumers.

However, in Punja's view, "it should be such that ease, speed and convenience now made available is not compromised. Greater collaboration between Banks and Fintech companies can be the best path to long-term growth. This will help understand each other’s strengths and weaknesses to improve the customer experience and reduce operational costs."

The Indian Government has taken tremendous steps to improve the ease of doing business with new technologies and innovation. This year’s budget will be crucial for both fintech companies and start-up businesses as to how the budget will sustain the wave of digitization and other major initiatives.