Paytm Founder Vijay Shekhar Sharma Backs Free Market in Capitalism vs. Socialism Debate

As the debate between capitalism and socialism resurfaces in Indian public discourse, leading startup founders are stepping up to defend the role of markets in growth, innovation and opportunity. Vijay Shekhar Sharma, founder of financial technology company Paytm, argued that neither capitalism nor socialism offers perfect answers, but that a market economy remains the most effective framework for creating value and supporting progress.

In an article on X (formerly Twitter), Sharma said that entrepreneurs themselves are a product of the market economy, emphasizing that rigid ideological positions often fail to grasp economic realities. “Neither capitalism is perfect, nor socialism solves the miseries of the world,” he wrote, adding that it is the market economy that “gives the opportunity to serve and build to all equally.”

Sharma’s remarks come amid an ongoing exchange among business leaders, policymakers and political figures on the role of private enterprise, regulation and state intervention, particularly in sectors such as gig work, digital platforms and rapid commerce.

Markets, not mandates

Elaborating on his argument, Sharma said that in a market-driven system, multiple players can coexist and compete. Governments can build public infrastructure, entrepreneurs can innovate, and alternative ideas can be tested, with outcomes ultimately decided by consumers rather than political dictates. Referring to rapid delivery services, he noted that the success of half-hour or even shorter deliveries is a matter where “the market decides the winner.”

He attributed India’s economic transformation over the past decade to this approach, describing it as “the modern India, which we see being built over the last 10 years.” According to Sharma, attempts to “suspend or kill” market forces risk blocking economic momentum that has taken years to gather pace. “This will halt the economic growth that has taken so long to start,” he warned.

Capitalism, socialism and the market economy

Sharma also sought to clearly distinguish between different business models. “When capital decides policies, it is capitalism. When collectivism prevails, it is socialism. When the market decides, it is a market economy,” he wrote, asserting that India today represents one of the world’s strongest examples of a thriving market economy.

He cautioned, however, that such an ecosystem must be protected against vested interests, whether short-term pressures driven by commercial or political considerations, or longer-term influences linked to geopolitics. For Sharma, safeguarding the market means preserving competition, openness and the freedom to build.

Message from Deepinder Goyal

Sharma’s message was shared alongside remarks from Deepinder Goyal, founder of Eternal and CEO of Zomato, who also defended the role of capitalism in value creation. Goyal wrote that while capitalism is imperfect, it remains “the only engine we have seen that creates value.” He argued that wealth must be created before it can be distributed, warning that reversing this order only leads to “distribution.”[ing] rarity.”

Concluding his message, Sharma said his priority was a “thriving Indian market” that attracts top talent to build world-class businesses at home before expanding globally – positioning India not only as a consumer market, but also as an innovation hub capable of competing on the global stage.

Goyal then replied to Sharma’s post and wrote, “Great nuance. Thanks for correcting me, @vijayshekhar.”