Union Budget 2026, set for February 1, comes as India's digital payments ecosystem scales at record pace. UPI now powers over 80% of digital payments, with 14 billion+ monthly transactions flowing through the network. The industry is using this moment to press for structural support.
Tax incentives top the wishlist. Fintech players want higher LTCG exemption limits, GST rationalization for digital lending startups, and targeted tax breaks to ease growth. The ask reflects startup funding challenges and the rising cost of compliance in a maturing sector.
Banking and NBFC sectors are seeking liquidity support and credit guarantee schemes for MSMEs, alongside PSL target adjustments. These moves would ease funding pressures on non-bank lenders and unlock capital for small business lending.
Digital infrastructure requests focus on three pillars: continued UPI investment, Account Aggregator ecosystem funding, and DigiLocker expansion. The startup ecosystem is also pushing for angel tax clarity and ESOP taxation relief to improve capital access and employee incentives.
The asks reflect India's digital finance trajectory. Current market size stands at $6.83 billion, with projections to reach $33.5 billion by 2034. Budget allocations to infrastructure and tax policy will directly shape whether fintech, banking, and lending platforms can scale to meet this demand.
