Rs100 Bn For FFS To Propel Startups: Fintech, Payment Tech Cos Welcome Budget; Credit cards tailored for micro businesses and doubling the DICGC cover for small industries will expand credit access, driving productivity and employment growth: Ketan Doshi; For MSMEs, the introduction of ‘Bharat Trade Net’, alongside robust export support, will strengthen India’s global competitiveness.
Ketan Doshi, Managing Director, Pay Point India Network:
Archana Jahagirdar, Founder & Managing Partner, Rukam Capital:
FinTech BizNews Service
Mumbai, February 3, 2025: The industry leaders from the fintech and payment technology have welcome the union budget for the FY2025-26 presented by Union Minister of Finance and Corporate Affairs, Smt Nirmala Sitharaman in the Parliament on 1st February, Saturday. The leaders of these sectors explain the finer points of the tech related aspects in the budget:
Vishvanathan Subramanian, CFO & Director, PayMate:
“The Union Budget 2025 takes significant strides in empowering India’s MSME and startup ecosystem. With a fiscal deficit forecast of 4.4%, there’s real potential for interest rates to drop, offering businesses much-needed relief and breathing life into the economy. This budget sets the foundation for a consumption-led growth model, one that will drive private investment, boost spending, and fuel overall economic advancement.
The government’s focus on financial services, particularly through the revamped CKYC registry, marks a pivotal step forward. It will unlock faster access to finance, enabling banks and fintechs to serve customers more effectively and ensuring greater financial inclusion.
For MSMEs, the introduction of ‘Bharat Trade Net’, alongside robust export support, will strengthen India’s global competitiveness. BTN’s integration with the Unified Logistics Interface Platform will cut processing times, making transactions smoother and accelerating payment settlements. This will directly benefit MSMEs by improving their working capital management, driving greater digital adoption, and facilitating efficient financial practices.
The Rs10,000 crore Fund of Funds and enhanced credit guarantees are game-changers, offering startups and MSMEs better access to capital. The customized Rs5 lakh credit cards for Udyam-registered micro-enterprises will foster growth, with 10 lakh cards projected to be issued in the first year. Additionally, the new scheme offering up to Rs2 crore loans to 5 lakh first-time entrepreneurs, including women and marginalized groups, will spur inclusive innovation and economic development.
The budget lays a solid foundation for enhanced growth opportunities, but sustained success will depend on consistent policy support and a business-friendly regulatory environment. While the steps taken are encouraging, further clarity in regulations and an emphasis on streamlining business processes could be the catalyst for the next phase of growth, positioning India as a global innovation hub in the years ahead.”
Ketan Doshi, Managing Director, Pay Point India Network:
"The introduction of credit cards tailored for micro businesses is a game-changer, Easing access to formal credit and empowering small enterprises to scale operations efficiently. The DICGC cover for small industries will expand credit access, driving productivity and employment growth.
Simplifying KYC processes with a revamped central registry is a welcome move, making financial transactions and account openings more seamless. The launch of customized credit cards with a Rs5 lakh limit for micro enterprises on the Udyam Portal further strengthens ease of doing business. Overall, this budget prioritizes financial inclusion, ease of access to credit, and economic expansion—key to India’s growth story.”
Navin Surya, Co-founder, Beams VC: "This budget seems very progressive, especially from the context of supporting so far ignored population of elderly, middle class besides continued support to farmers and MSME. This should also boost consumption with more cash in hand with middle class."
Archana Jahagirdar, Founder & Managing Partner, Rukam Capital:
"When startups are included in the central government’s annual budget planning, it is a moment to celebrate. We commend the Hon’ble Finance Minister for recognizing securities held by AIFs as Capital Assets—a decision that strengthens the case for CAT I & II by ensuring that gains from securities are treated as capital gains and that GST on security sales remains outside the framework. Additionally, the launch of the new Rs10,000 crore round under the Fund of Funds for Startups (FFS) scheme reaffirms the government’s dedication to fostering innovation and entrepreneurship. This renewed fund which aligns with the Startup India Action Plan and initiatives like the Startup Mahakumbh has played a pivotal role in driving India's startup boom since its inception. We believe that increased financial support from the government, alongside efforts to reduce capital constraints and collaboration with industry will further accelerate the growth of Indian startups."
This fund, aligning with the Startup India Action Plan and the Startup Mahakumbh has played a big role in driving India's startup boom since its inception.
Kushal Rastogi, CEO of Knight Fintech:
"The Union Budget takes a corrective step towards aligning economic growth with the Viksit Bharat goal. It maintains fiscal prudence with a 4.4% deficit target while introducing significant tax reforms, easing pressure on the middle class with Rs1 lakh crore allocated to boost consumption, savings, and investments.
Enhancing credit guarantee coverage from Rs5 crore to Rs10 crore unlocks the potential for Rs1.5 lakh crore in incremental credit over the next five years, benefiting 5.7 crore MSMEs. Strengthening the agricultural sector by increasing the Kisan Credit Card (KCC) limit from Rs3 lakh to Rs5 lakh expands access to formal credit, supporting 7.7 crore farmers in meeting their short-term financial needs.
Raising the tax exemption limit to Rs12 lakh and revising tax slabs provide much-needed relief, increasing middle-class spending power. This, in turn, fuels demand for products from MSMEs and the agricultural sector, creating a positive demand-supply cycle that reinforces economic momentum.
By addressing these key areas while maintaining fiscal discipline through controlled expenditure, the budget strikes a fine balance—ensuring growth without compromising stability
Pallavi Shrivastava, Co-founder, Progcap (an MSME fintech): “Progcap welcomes the Union Budget 2025, which strengthens the foundation for MSME growth by addressing long-standing challenges in access to credit, scalability, and global competitiveness. A major highlight of this budget is the enhanced Priority Sector Lending (PSL) classification, with investment limits increased by 2.5 times and turnover limits doubled. This change expands the pool of MSMEs eligible for PSL-linked credit, incentivizing financial institutions to direct more funding into the sector. With more MSMEs qualifying for PSL benefits, businesses will have better access to affordable capital, reducing their reliance on high-cost borrowing and fostering long-term growth. For years, one of the biggest hurdles for MSMEs has been securing timely and adequate credit.
The expansion of the credit guarantee cover for micro enterprises from Rs5 crore to Rs10 crore is a critical move, unlocking Rs1.5 lakh crore in additional lending over the next five years. This gives financial institutions greater confidence to extend credit to underserved businesses, enabling them to access working capital without collateral. The introduction of customised credit cards with a Rs5 lakh limit for micro enterprises registered on the Udyam Portal is another step toward financial flexibility. Many small businesses operate with irregular cash flows, and these cards will give them a structured, accessible way to manage short-term expenses. This allows credit distribution at the last mile to an even wider segment of the market.
The budget also introduces a new scheme offering term loans of up to Rs2 crore for first-time women, Scheduled Castes (SC), and Scheduled Tribes (ST) entrepreneurs. Historically, these groups have encountered barriers such as limited access to capital and inadequate managerial support, hindering entrepreneurial pursuits. This initiative not only provides financial assistance but also includes online capacity building for entrepreneurship and managerial skills, empowering marginalized groups to establish and grow their businesses. With MSMEs contributing 45% to India’s exports, the newly announced export promotion mission will help businesses navigate non-tariff barriers and expand globally. As MSMEs scale up to meet global demand, they will need stronger financial, technical, and skilling support. We believe these budgetary measures will catalyse the next wave of MSME growth, fostering a more inclusive and resilient financial ecosystem. Progcap looks forward to working with MSMEs to leverage these opportunities, ensuring they have the credit, flexibility, and support needed to grow, innovate, and thrive.”
