Pre-budget expectations by Neeraj Dhawan, Managing Director on behalf of Experian India.


National, January 30, 2022:

  • Measures for SME lending to accelerate and succeed: Helping MSMEs build a good credit line and a credit history is the need of the hour. A good credit line will help them with quick and easy access to secured credit, also assuring the lenders such as banks on the risk they will be underwriting. For this purpose, providing Credit Bureaus with access to utilities bills data, cash flows and invoices data, income tax data, and GST and expanding the scope of the Bureau data to include alternate data will be effective steps to scale up credit access to MSMEs. Mandating Permanent Account Number (PAN) for all commercial reporting to Credit Bureaus is a necessary step helping build credit history that the government could consider bringing to effect.
  • Allow deduction for expenditure of covid treatment who do not have health insurance: The government should provide tax relief to the people who are paying for medical treatment of Covid-19 on their own. Extended tax relief should be provided for the expenditure on medical treatment of the covid affected to those who didn’t have medical insurance. These individuals have carried the devastating financial impact of Covid-19 on their own.
  • Optimizing tax slabs for the salaried taxpayer: The expectation of citizens from the upcoming budget remains high. The suggestion that is already in the circles for the government to consider increasing the annual tax deduction limit for repayment of home loan principal under Section 80C of the Income Tax act will be a good step forward. Increasing it from the current cap of INR 2 lakhs to 5 lakhs will provide huge benefits to the salaried taxpayer and at the same time boost the real estate industry with increase housing demand. Further adjusting tax slabs with the increase in other deductions can help the salaried taxpayer, specifically the below INR 50 lakhs per annum bracket with more money in hand.
  • Measures for digital skilling and technology incubation: The digital payment industry is playing an influential role in ushering transparency and formalization of the economy. To further promote the industry by supporting new business deployment solutions the government could consider incentivizing Venture Capitalists and Private Equity players and other investors to fund Research & Development and technology infrastructure upgradation in India. 
  • Measures to propel and encourage fintechs that are serving the under-credited: A large population of India in the likes of the blue-collared workers, construction workers and house-helps who don’t fall under the formal employment segment are in need of access to credit. Helping this under-credited segment with access to unsecured loans provided by certain fintechs will provide a significant domino effect for the entire upliftment of the society and the economy at large. The government should consider providing incentives to these fintechs that are lending to the under-credited to encourage more fintechs to serve this segment and also effectively manage the risk being underwritten.