Coming after a pandemic-hit year, and announcing four so-called ‘mini-Budgets’ to help keep the economy afloat, Finance Minister Nirmala Sitharaman has been duly applauded by the captains of industry for keeping the focus of Budget 2021 on two key words—‘growth’ and ‘spend’. “It was always going to be a challenging Budget; she has done exceptionally well,” says Prashant Sarin, partner, Bain & Company, New Delhi office.
Speaking to Fortune India for a post-Budget analysis, Sarin adds, “With ₹5.5 lakh crore earmarked for capital spending, the finance minister did a very nice job of articulating the six pillars on which the Budget would be highlighted.”
However, there are still concerns over the fiscal deficit targets— projected at 6.8% of GDP for FY22 and 4.5% of GDP by FY26. “If Covid-19 hadn’t happened then it was a worry that we were trending to 4.5%. But given what we have all gone through, it’s quite realistic,” says Sarin. “We have to spend in order to grow. It’s as simple as that.”
To that end, Budget 2021 has proposed big-bang spends on key sectors such as healthcare, infrastructure, and textiles.
For the startup sector, though, the Budget didn’t announce any new spends. However, it did get a leg-up with the extension of a tax holiday and a new proposal of a ‘One Person Company’. But Sarin believes that in reality, startup entrepreneurs aren’t waiting for any Budget.
One of the most positive outcomes of the Covid-19 pandemic has been the fillip it has given to the digital economy in the country. “The number of startups haven’t just survived, but thrived owing to the number of people who have moved online in a way that no other crisis could have precipitated,” says Sarin.
He shares that many entrepreneurs in the digital space have had their hands full—coping with the excess demand and trying to get new talent into their workforce, skilling them, and getting them ready. “From that perspective, I would say the Budget is just a blip on their radar.” Watch the interview.