Budget 2021 is geared towards reviving core industries: Matrix India’s Rajinder Balaraman

Matrix Partner India’s Rajinder Balaraman says that with asset monetisation and privatisation, Budget 2021 enables India to become a more market-driven economy.

The much-awaited Union Budget 2021 was presented by Finance Minister Nirmala Sitharaman to much fanfare. Public markets have responded positively and the government has shown us again that their power to influence markets remains undiminished.

Here’s what startups can hope for in 2021 based on what we learnt from the FM’s speech: 

Physical infrastructure

The government has earmarked $75 billion for Capex (up 35 percent YoY) for roads, urban metro projects, railways, and clean and smart energy. These plans will provide a continued boost to urban mobility and regional logistics, as well as industries that we have invested in and we expect them to bounce back strongly over the next two years.

I would not be surprised if mobility and supply chain are the fastest-growing sectors as towns and cities unlock and infrastructure spending gets a massive boost.

EV and clean energy are also closely interlinked and India needs to do a lot more to catch up with the US and China’s EV industries. The vehicle scrappage policy announced in the budget though will not provide consumers choices at affordable prices on its own, but through intelligent taxation and EV industry development, local champions can emerge. 

Banking and liquidity 

Setting up of a bad bank for toxic assets, a development finance institution for infrastructure, and continued privatisation of PSU banks – all point to liquidity easing up over the next year. This is good news for fintech startups that work with banks on the liabilities side.

Furthermore, Rs 1,500 crore earmarked for promoting digital payments will only make our transactional data pipe stronger to be able to underwrite small merchants and consumers who enter the formal economy through digital payments adoption.

Without a doubt, fintech should see a stronger 2021, and both liabilities and assets have a favourable outlook.

B2B commerce 

The big push on infrastructure, affordable housing, and liquidity is geared towards reviving core industries and small-town/peri-urban India. The ecommerce sector is seeing a long-term trend with B2B companies like Ofbusiness and Dukaan, which supply, finance or enable SMBs, are helping them grow by connecting them to urban markets/consumers and have already seeing tailwinds from COVID-19.


The government has recognised the importance of expanding digital access through a new National Education Policy.

Growing reach, awareness, and acceptance of digital learning will deepen the market in the long term while creating room for more startups to emerge as new vernacular language speaking students to enter the market. 

Asset monetisation and privatisation 

This should create the fiscal room required for increased expenditure on Capex and healthcare. The broader direction of India becoming a more market-driven economy continues with privatisation. This is unlikely to have any meaningful impact on startups but is broadly beneficial for the economy and should unleash some of the growth we all have been waiting for.


However, the budget has also stayed silent on some topics. The Companies Amendment Bill introduced in September 2020 laid out a framework for Indian companies to list overseas directly, thereby securing the deep pools of permanent capital that the companies will need to expand and compete globally. The silence on this topic in this budget means that more companies will either delay their plans to list or expand globally, as regulations to list in India and the investor pool domestically both favour profitable growth over the aggressive growth path charted by global tech players.

For YourStory's multimedia coverage of Budget 2021, visit YourStory's Budget 2021 page or budget.yourstory.com.

Edited by Kanishk Singh

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)