The COVID-19 pandemic offered key insights into the mobilizing capabilities in the sunrise sectors like pharmaceuticals, green energy, digital economy which have the advantage of both scale and reach, creating job opportunities, and is poised to move up the value chain.

Acknowledging the immense potential of sunrise sectors the Union Budget 2022-23 presented in parliament yesterday by the Finance Minister Nirmala Sitharaman has stated that supportive policies, light-touch regulations, facilitative actions to build domestic capacities, and promotion of research & development will guide the government’s approach. In order to expand its presence in innovation and R&D, government contributions will be provided for R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry, and public institutions, government contributions will be provided. After the immense success of the government’s Aatmanirbhar Bharat initiative to promote investments in the pharmaceutical sector, the government plans to promote thematic funds for blended finance with the government share being limited to 20 per cent and the funds will be managed by private fund managers in order to continue scaling up the industry. 

The Union Budget has raised its allocation for capital expenditure to INR 7.5 lakh crore in 2022-23, up from INR 5.5 lakh crore in 2021-22 with hopes that the continuing focus on ramping up public capital spending will help crowd in private sector investments. In its continuous endeavor to improve the productive efficiency of capital and human resources and facilitate private investments, the government also plans to launch ‘Ease of Doing Business 2.0.’ This will actively reduce the compliance burden on investors and make India a more investment-friendly destination. The Emergency Credit Line Guarantee Scheme (ECLGS) has been extended to cover the next fiscal year with an expanded guarantee cover of INR 5 lakh crore which will further provide a boost to the sunrise sectors, especially the stressed micro and small enterprises hit by COVID-19. To help the start-up community, the government has increased the period of incorporation of eligible start-ups by one more year to receive tax incentives. The government has also proposed to extend tax benefits to manufacturing companies by one year. Additionally, these reforms reaffirm the government's commitment towards Atmanirbhar Bharat and inclusive development.

This article is authored by Aprajita Singh.