Key Budget 2022 expectations for BFSI sector

With the Union Budget 2022-23 right around the corner, all major industries have are looking to the Finance Ministry. The banking industry is considered as the backbone of any economy and India Inc expects the sector to get a major boost from the forthcoming Budget 2022 announcements. To throw light on the market sentiments and better understand the expectations from this budget, Grant Thornton Bharat presents its pre-budget expectation survey for the banking and financial services (BFSI) sector.

Commenting on the findings, Vivek Iyer, Partner- Financial Services, Grant Thornton Bharat, said, ”The market survey clearly demonstrates the expectation for the government to be forward-looking by focusing on initiatives around evolving risks, that help strengthen stability and growth of the financial services ecosystem.”

According to the survey, more than 75% of the respondents felt that the Budget 2022 should focus on the following:

• Green energy should be included in the definition of priority sector
• Data Privacy Bill should be pushed for finalisation
• Public Credit Registry initiative should be prioritised
• Increased regulatory focus around cryptocurrency and non-fungible tokens (NFTs)
• Harmonisation of tax and regulatory incentives for alternate investment funds (AIFs) between the Domestic Tariff Area and Gujarat International Finance Tec-City (GIFT City)

Opinion was also divided on foreign bank tax reduction, differential bank licences and extension of tax incentives on interest income for foreign portfolio investors (FPIs). The respondents voted for fiscal stimulus measures to mitigate damages from the ongoing COVID-19 pandemic (67%), but stood against moratoriums to be provided by the banking system (57%), which reflects an underlying recovery sentiment.