return to news
  1. Digital Transformation in Finance: What to Expect Ahead of Budget 2024

Digital Transformation in Finance: What to Expect Ahead of Budget 2024

blog author image


blog verification badge

4 min read • Updated: January 29, 2024, 3:13 PM

Facebook PageTwitter PageLinkedin Page


Ahead of Budget 2024, the finance sector anticipates continued emphasis on digital transformation, building on previous allocations and initiatives. The government's focus on digital infrastructure and financial inclusion has catalyzed significant growth in digital transactions and FinTech services. Key expectations for the upcoming budget include addressing NPAs, promoting FinTech innovation, enhancing digital literacy, and bolstering cybersecurity measures. The budget is anticipated to introduce tax incentives for FinTech startups, establish regulatory frameworks for digital payments, and prioritize financial inclusion efforts. The overarching goal is to foster a digitally empowered economy and ensure inclusive growth through enhanced digital infrastructure and financial services.

The "Digital India” initiative targets the expansion of digital infrastructure and the promotion of digital transactions in the financial sector.

Key Takeaway

The government’s focus is on digital infrastructure and financial inclusion last year contributed to the digital transformation of the financial sector. The provision of secure and reliable systems for digital transactions, cybersecurity policies, and the promotion of FinTech startups through incentives and funding are expected to be key focus areas. Various measures are anticipated to promote digitalisation and improve opportunities in FinTech, online trading, and digital payments.

The BFSI sector in India refers to the Banking, Financial Services, and Insurance industry. It is a significant part of the nation's economy. It is responsible for driving economic growth, offering financial services, and managing the risk associated with various kinds of financial transactions.

Previous Year Budget

Last year, the Union Budget allocated an estimated ₹3.05 trillion for the financial services sector, of which ₹1.75 trillion was only for capital expenditure. The “Digital India” initiative targeted the expansion of digital infrastructure and the promotion of digital transactions in the financial sector. The 2023-24 budget allocated ₹6,000 crores for the BharatNet- aiming to cover 6.49 lakh villages. This program aimed at extending broadband connectivity to villages. The initiative directly supports the digital infrastructure essential for the growth of FinTech and digital payments in rural areas.

Since then, there has been a notable increase in digital transactions. As of 2023, the digital payment transactions in India reached a value of ₹469.2 trillion. This reflects a tremendous year-on-year growth of 28.3%. This growth is indicative of the increasing digital adoption in financial transactions.


In the previous budget, initiatives such as the formation of National Asset Reconstruction Company Limited (NARCL) and India Debt Resolution Company Limited (IDRCL) were announced to address non-performing assets (NPAs) in the banking sector. The government also expressed interest in the divestment of two public sector banks. 2024 Budget is expected to focus on resolving NPA issues, potentially through policy decisions to boost the activities of NARCL and IDRCL. This will provide concrete shape to the future budgets, potentially influencing the banking sector's performance.


With the emerging presence of FinTech firms in credit growth, the budget is projected to include incentives for these firms and promote digitalisation in the financial sector. This could be supported by the increasing importance on digital payments and online trading.

2024’s budget should include provisions for promoting digital literacy and awareness programs, particularly in rural and underserved areas. Educating and empowering individuals about digital financial services, online trading, and FinTech innovations is essential to ensure inclusive and sustainable digital transformation across the country. With the exponential growth of digital transactions and FinTech services, the budget should also prioritise data security and privacy measures.

Budget Expectations from the BFSI Sector

As a result of the last year's budget decisions, digital transactions in India witnessed significant growth. The adoption of digital payments and FinTech services surged, with an increase in the number of digital transactions across various platforms. The emphasis should be on expanding broadband connectivity, improving digital infrastructure, and enhancing cybersecurity measures to foster a conducive environment for digital financial services. This is crucial to drive the digital transformation of the financial sector and boost FinTech innovation.

The union budget should also introduce tax incentives and financial support schemes for FinTech startups focusing on financial inclusion, digital lending, and digital payments. Incentivising these startups can accelerate their growth, encourage innovation, and expand their reach to under-served areas, thus aligning with the government's vision for a digitally empowered economy. Anticipated measures include the introduction of a regulatory framework for digital payments, ensuring security, consumer protection, and interoperability. Not only will this build trust in digital transactions but also, foster the adoption of digital payment solutions.

To conclude, this year’s budget should outline specific financial inclusion measures, such as incentivising digital banking, promoting UPI integration, and supporting FinTech solutions tailored to the unbanked and under-served populations. These measures can contribute to narrowing the digital divide and bolstering financial inclusion efforts.


In the upcoming budget considering the BFSI sector in India, digital transformation is leading in the country’s growth potential. The industry leaders are expecting a budget that supports and encourages the digital push in various forms, as it has been the bedrock of the transformation in the country. Digitalisation in finance is crucial, as our economy’s growth relies on digital infrastructure. So, more resource allocation leads to more digital infrastructure which in turn results in a financially inclusive society.