Budget 2026: Fintechs look for regulatory clarity, GST relief, backing for innovation-led growth

As Finance Minister Nirmala Sitharaman readies to present the Union Budget, India’s fintech sector is sharpening its focus on regulatory clarity, robust digital infrastructure and capital efficiency. With fintechs now underpinning everything from payments and lending to wealth management and embedded finance, industry leaders are seeking policy continuity, tax rationalisation and stronger backing for innovation-led growth, especially as global funding tightens and profitability takes centre stage.

India’s fintech story has been closely intertwined with the rapid adoption of digital payments, a transformation that has reshaped everyday economic activity. What began as a convenience has become an expectation across neighbourhood retail, transport, healthcare and education. Richika Dadheech, Founder and Managing Director of FiatPe, says this momentum has been driven by UPI’s interoperable, low-cost architecture, alongside rising smartphone penetration, affordable data and an enabling policy framework. “Together, these elements have strengthened trust, encouraged formalisation, and enabled scale across the digital payments ecosystem,” she notes.

As the industry looks ahead to Budget 2026, there is a clear call for continuity with a sharper focus on long-term sustainability. While zero MDR has played a pivotal role in driving adoption and inclusion, fintech leaders argue that differentiated economics for high-volume use cases could help sustain investment in infrastructure, security and reliability without burdening small merchants. With transaction volumes surging, reinforcing payment resilience, cybersecurity and fraud prevention is increasingly seen as non-negotiable.

Technology, particularly artificial intelligence, is also quietly reshaping fintech operations. AI-led tools are being deployed for real-time fraud detection, system monitoring and efficiency at scale. Yet industry leaders emphasise that trust ultimately rests on dependable systems backed by human accountability. As Dadheech points out, the next phase of fintech growth will be defined not just by reach or speed, but by on-ground reliability and confidence in user support when it matters most.

From the wealth-tech perspective, Naren Agarwal, CEO of Wealth1, says targeted Budget measures could significantly strengthen the ecosystem. Easier access to growth capital, tax incentives for fintech innovation, rationalisation of GST on technology-driven financial services, and continued support for digital public platforms such as UPI, Account Aggregator and DigiLocker are high on the wish list. Policy support for AI, data analytics, cybersecurity and regulatory sandboxes, he adds, would help fintechs scale responsibly, deepen financial inclusion and reinforce India’s position as a global hub for digital financial services.

For MSME-focused fintechs, credit access and regulatory balance remain key. Chirag Shah, Founder and CEO of Pulse, says the upcoming Budget offers an opportunity to strengthen digital lending infrastructure while making credit more accessible, transparent and efficient for small businesses. Simplifying compliance, expanding credit guarantee mechanisms and offering targeted incentives for technology adoption could accelerate fintech-led growth. At the same time, he stresses that innovation must be encouraged within strong data protection frameworks such as the DPDP Act to build a more inclusive, resilient and trusted lending ecosystem.