The Union Minister of Finance Smt. Nirmala Sitharaman, during the Inaugural speech at Global Fintech Fest (GFF) held in Mumbai on 5th September 2023 said that India’s G-20 presidency called for the framework for handling issues related to the crypto-assets. IMF and FSB have given their synthesis paper.
The Finance Minister said that the technology is a potent tool for creating a diverse, resilient, and sustainable financial ecosystem. She also urged international cooperation and collaboration, which she argued is essential for a responsible financial ecosystem.
The Union Minister emphasised that we must also contribute to the discussion of responsible globalisation. In this regard, the Union Finance Minister also stated that consideration should be given to risks to the global financial ecosystem, such as those posed by physical border threats, cyberthreats, cryptocurrency threats, the drug threat, tax havens, the round-tripping of resources, and tax evasions.
During India’s term as the presiding nation, discussions and requests have been made for international collaboration in various areas, including reforms within multilateral development banks, addressing global debt challenges, tackling tax evasion, and implementing a two-pillar tax solution, among other topics, said the Finance Minister.
The Finance Minister emphasized that improving cross-border payments has been a key agenda for the G20 since 2020. As part of India’s G20 presidency, a prominent area of focus is “Sharing information about national experiences and global initiatives related to the compatibility of national rapid payment systems, enabling a smooth flow of funds across borders.” The Finance Minister expects that this initiative will enhance cross-border payments.
Finance Minister Nirmala Sitharaman conveyed the following points to emphasize India’s progress in ensuring inclusivity within its financial system:
- In a span of 4 years, the number of Demat accounts has increased by 2.5 times, from 4.1 crore in 2019-20 to 10 crore in 2022-23.
- A record number of Mutual Funds SIPs are being registered, which helps to generate long-term wealth, with the monthly flow in the mutual fund industry through the route reaching an all-me high of Rs 15,245 crore in July 2023.
- The Assets Under Management (AUM) of the Indian mutual fund industry have increased tremendously in the last decade. It grew more than four-fold from Rs 10 lakh crore in May 2014 to a significant Rs 46.37 lakh crore (July 2023).
- Top 30 cities of India are usually expected to be ahead in formal savings. However, in the last four years, the share of Cities beyond Top-30 cities in total mutual fund assets has grown from 15% to 26%.
- Instruments like SIPs are only democratizing this wealth-creation opportunity. Just like UPI (Unified Payments Interface), democratized payments and now ONDC (Open Network for Digital Commerce) is poised to do for e-commerce.
- Fin-techs are driving more inclusion and creating their niche. Today in lending, fintech have 36% share of new-to-credit customers vs 22% share in banks. In Payments, Fintech have 93% share of UPI transaction value vs 7% share in banks.
- In WealthTechs, Fintech broking have 80% share of active broking clients vs 20% active in traditional broking.
- ITR data released in August signals “Formalisation of the Indian Economy”. There is now wider access to benefits like credit facilities, and social security (pension, insurance, etc). Each Tax bracket (Tax Slab) has seen a minimum Threefold increase in tax filings, some even achieving a nearly Four-fold surge.
- While Maharashtra continues to be the leader, other states are moving up with respect to ITR filings. In places like North-East, Chhattisgarh, even Jammu & Kashmir, the new ITR filings have grown by double digits. This augurs well for the Fintech Industry.
- As per a SBI Research, Per capita income is expected to increase by 7.5 times from Rs 2 lakh in FY 2023 to Rs 14.9 lakh in FY 2047 (in USD terms, the corresponding increase comes to ~$12,400 in FY47 from ~$2500 in FY23).
- Our workforce is expected to increase by 19.5 crore to 72.5 crore in FY 2047 from 53 crore in FY 2022-23.
- Workforce share in population will increase from 37.9% in FY 2023 to 45% in FY 2047.
- Taxable Workforce /Workforce eligible to pay taxes to rise to 85.3%, from the current 22.4%. There would be approximately 48.2 crore IT filers in FY 2047 from approximately 7 crore in FY 2022-23. (seven times more).
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